Important MCQs of Class 12 accountancy chapter-1 Financial Statements of Not-for-Profit Organisations (N.P.O.)

 

 

Important MCQs of Class 12 accountancy chapter-1 Financial Statements of Not-for-Profit Organisations (N.P.O.)

 

Select the correct alternative:

Q. 1. Receipts and Payments Account generally show:

(A) A Debit balance

(B) A Credit balance

(C) Surplus or Deficit

(D) Capital Fund

 

Q. 2. Income and Expenditure Account records transactions of:

(A) Revenue nature only

(B) Capital nature only

(C) Both revenue and capital nature

(D) Income of only revenue nature and expenditure of revenue and capital nature.

 

Q. 3. Income and Expenditure Account reveals:

(A) Surplus or Deficiency

(B) Cash in Hand

(C) Net Profit

(D) Capital Account

 

Q. 4. The amount of ‘Subscription received from members’ by a Non-profit organisation is shown in which of the following?

(A) Debit side of Income and Expenditure Account

(B) Credit side of Income and Expenditure Account

(C) Liability side of Balance Sheet

(D) Assets side of Balance Sheet

 

Q. 5. Donation received for a special purpose:

(A) Should be credited to Income and Expenditure Account

(B) Should be credited to separate account and shown in the Balance Sheet

(C) Should be shown on the assets side

(D) Should not be recorded at all.

 

 

Q. 6. Subscription received by a school for organising annual function is treated as:

(A) Capital Receipt (i.e., Liability)

(B) Revenue Receipt (;.e., Income)

(C) Asset

(D) Earned Income

 

Q. 7. The amount of ‘Entrance Fees’ received by a Non-profit organisation (if it is received regularly) is shown in which of the following?

(A) Liability side of Balance Sheet

(B) Assets side of Balance Sheet

(C) Debit side of Income and Expenditure Account

(D) Credit side of Income and Expenditure Account

 

Q. 8. Out of following items, which one is shown in the Receipts and Payments Account?

(A) Outstanding Salary

(B) Depreciation

(C) Life Membership Fees

(D) Accrued Subscription

 

Q. 9. Not-for-profit organisations prepare:

(A) Trading Account

(B) Trading & Profit and Loss Account

(C) Income and Expenditure Account

(D) All of the above

 

Q. 10. The Receipts and Payments Account is a summary of:

(A) Debit and Credit balance of Ledger Accounts

(B) Cash Receipts and Payments

(C) Expenses and Incomes

(D) Assets and Liabilities


 

Q. 11. Receipts and Payments Account is a :

(A) Personal Account

(B) Real Account

(C) Nominal Account

(D) Real and Nominal Account, both

 

Q. 12. Income and Expenditure Account is a:

(A) Personal Account

(B) Real Account

(C) Nominal Account

(D) Real and Nominal Account, both

 

Q. 13. Credit side balance in Income & Expenditure Account reveals:

(A) Excess of cash receipts over payments

(B) Excess of cash payments over receipts

(C) Excess of expenditure over income

(D) Excess of income over expenditure

 

Q. 14. Source of income for a not-for-profit organisation is :

(A) Subscription from Members

(B) Donation

(C) Entrance Fees

(D) All of the above

 

Q. 15. Which of the following represent capital receipt:

(A) Life Membership Subscription

(B) Donation

(C) Subscription

(D) Interest on Investments

 

Q. 16. Amount received from sale of grass by a club should be treated as :

(A) Capital Receipt

(B) Revenue Receipt

(C) Asset

(D) Earned Income

 

Q. 17. The amount received for sale of old sports materials by a Non-profit organisation is shown in which of the following?

(A) Debit side of Income and Expenditure Account

(B) Liability side of Balance Sheet

(C) Credit side of Income and Expenditure Account

(D) Assets side of Balance Sheet

 

Q. 18. If there is a ‘Match Fund’, then match expenses and incomes are transferred to:

(A) Income and Expenditure A/c

(B) Assets side of Balance Sheet

(C) Liabilities side of Balance Sheet

(D) Both Income and Expenditure A/c and to Balance Sheet

 

Q. 19. Subscription received in advance during the current year is :

(A) an income

(B) an asset

(C) a liability

(D) none of these

 

Q. 20. Subscription received in cash during the year amounted to Rs.40,000; subscription outstanding at the end of previous year was Rs. 1,500 and outstanding at the end of current year was Rs.2,000. Subscription received in advance for next year was Rs.800. The amount credited to Income & Expenditure Account will be:

(A) Rs.38,700

(B) Rs.39,700

(C) Rs.40,300

(D) Rs.41,300

 

Q. 21. Subscription received in cash during the year amounted to Rs.5,00,000; subscription outstanding at the end of previous year was Rs.20,000 and outstanding at the end of current year was Rs.25,000. Subscription received in advance for next year was Rs. 8,000 and received in advance during previous year was Rs.7,000. The amount credited to Income & Expenditure Account will be :

(A) Rs.5,04,000

(B) Rs.5,06,000

(C) Rs.4,96,000

(D) Rs.4,94,000

 

Q. 22. Subscription received in cash during the year amounted to Rs.60,000; subscription received in advance for next year was Rs.3,000 and received in advance during previous year was Rs.2,000. Subscription in arrear at the end of current year was Rs.5,400. The amount credited to Income & Expenditure Account will be:

(A) Rs.53,600

(B) Rs.66,400

(C) Rs.55,600

(D) Rs.64,400

 

Q. 23. Subscription received in cash during the year amounted to Rs.3,00,000; subscription received in advance for next year was Rs. 10,000 and received in advance during previous year was Rs.8,000. Subscription in arrear at the end of previous year was Rs. 18,000 and subscription in arrear at the end of current year was Rs. 12,000. The amount credited to Income & Expenditure Account will be :

(A) Rs.2,96,000

(B) Rs.3,04,000

(C) Rs.2,92,000

(D) Rs.3,08,000

 

Q. 24. What amount will be credited to the Income and Expenditure Account for the year ending 31st March, 2020 on the basis of the following information? :

31-3-2019 31-3-2020

Outstanding Subscription 10,000 25,000

Advance Subscription 3,000 2,000

Subscriptions received during the year 2019-20 were Rs.4,00,000.

(A) Rs.3,84,000

(B) Rs.4,16,000

(C) Rs.3,86,000

(D) Rs.4,14,000

 

Q. 25. There are 200 members, each paying an annual subscription of Rs. 1,000; subscription received during the year Rs. 1,95,000; subscriptions received in advance at the beginning of the year Rs. 3,000 and at the end of the year Rs.2,000. Amount shown in Income & Expenditure Account will be :

(A) Rs. 2,00,000

(B) Rs. 1,96,000

(C) Rs. 1,94,000

(D) Rs. 2,01,000

 

Q. 26. The opening balance of Prize Fund was Rs.32,800. During the year, donations received towards this fund amounted to Rs. 15,400; amount spent on prizes was Rs. 12,300 and interest received on prize fund investment was Rs.4,000. The closing balance of Prize Fund will be :

(A) Rs. 56,500

(B) Rs.64,500

(C) Rs.39,900

(D) Rs. 31,900

 

Q. 27. Salary paid in cash during the current year was Rs. 80,000; Outstanding salary at the end was Rs.4,000; Salary paid in advance last year pertaining to the current year was Rs.3,200; paid in advance during current year for next year was Rs.5,000. The amount debited to Income and Expenditure Account will be:

(A) Rs.85,800

(B) Rs.77,800

(C) Rs. 82,200

(D) Rs. 74,200

 

Q. 28. Salary paid in cash during the current year was Rs.30,000; Outstanding salary at the end of previous year was Rs.2,000 and outstanding salary at the end of current year was Rs.3,000. Salary paid in advance during current year for next year was Rs.2,600. The amount debited to Income and Expenditure Account will be :

(A) Rs.33,600

(B) Rs.26,400

(C) Rs.31,600

(D) Rs.28,400

 

Q. 29. Salary paid for the year ended 31st March, 2020 amounted to Rs.75,000. How much amount will be recorded in Income and Expenditure Account in the following case?

31-3-2019 31-3-2020

Outstanding Salary 6,500 6,000

Prepaid Salary 1,200 1,000

(A) Rs.75,700

(B) Rs.74,300

(C) Rs.75,300

(D) Rs.74,700

 

Q. 30. How much amount will be shown in Income and Expenditure Account in the following case?

1-4-2019 31-3-2020

Creditors for Stationery 8,000 6,000

Stock of Stationery 3,000 3,200

During 2019-20 payment made for Stationery was Rs.60,000.

(A) Rs.57,800

(B) Rs.62,200

(C) Rs.61,800

(D) Rs.5 8,200

 

Q. 31. How much amount will be shown in Income and Expenditure Account in the following case?

31-3-2019 31-3-2020

Unpaid for Medicines 10,000 12,000

Stock of Medicines 8,000 13,000

Payment made for medicines during 2019-20 was Rs.2,50,000.

(A) Rs.2,53,000

(B) Rs.2,47,000

(C) Rs.2,57,000

(D) Rs.2,43,000

 

Q. 32. If a General Donation of huge amount is received by a school, that donation is treated as :

(A) Revenue Receipt (Income)

(B) Capital Receipt (Liability).

(C) Assets

(D) Earned Income

 

Q. 33. If a general donation of smaller amount is received by a school, that donation will be shown in:

(A) Liability Side

(B) Asset Side

(C) Debit side of Receipt and Payment A/c

(D) Credit side of Receipt and Payment A/c

 

Q. 34. Out of the following items, which one is shown in the ‘Receipts and Payments Account’ of a not for profit organisation?

(A) Accrued subscription

(B) Outstanding salary

(C) Depreciation

(D) None of these

 

Q. 35. Out of the following items, which is not shown in the ‘Receipts and Payments A/c’ of a not for profit organisation?

(A) Subscription received in advance

(B) Subscription due

(C) Last year subscription received

(D) All of the above

 

Q. 36. Out of the following items, which is shown in the ‘Receipts and Payments A/c’ of a not for profit organisation?

(A) Subscription received in advance

(B) Last year subscription received

(C) Current year subscription received

(D) All of the above

 

 

Answers

Multiple Choice Questions (SET A)

 

1.

A

2.

A

3.

A

4.

B

5.

B

 

6.

A

7.

D

8.

C

9.

C

10.

B

 

11.

B

12.

C

13.

D

14.

D

15.

A

 

16.

B

17.

C

18.

C

19.

C

20.

B

 

21.

A

22.

D

23.

C

24.

B

25.

A

 

26.

C

27.

C

28.

D

29.

D

30.

A

 

31.

 

36.

B

 

D

32.

B

33.

C

34.

D

35.

B

 

 

 

 

 

Multiple Choice Questions (SET B)

Select the correct alternative:

1. Receipts and Payments Account is prepared on

(a) Cash Basis.

(b) Time Basis.

(c) Accrual Basis.

(d) Sales Basis.

 

2. Not-for-Profit Organisations prepare

(a) Income and Expenditure Account.

(b) Trading and Profit and Loss Account,

(c) Trading Account.

(d) Both (a) and (c).

 

3. Receipts and Payments Account is a summary of

(a) Debit and Credit balances of Ledger Account.

(b) Cash receipts and payments.

(c) incomes and Expenses.

(d) Balances of assets and liabilities.

 

4. Income and Expenditure Account is prepared on

(a) Cash Basis.

(b) Accrual Basis.

(c) Both (a) and (b).

(d) Sales Basis,

 

5. Legacy Donation received by NPO to be used for specific purpose is accounted as

(a) Revenue Receipt.

(b) Capital Receipt.

(c) an Asset.

(d) is decided by the Management.

 

6. Life Membership Fee received by NPO is accounted as

(a) Revenue Receipt.

(b) Capital Receipt.

(c) an Asset.

(d) Miscellaneous Receipt.

 

7. Salaries paid during the year ended 31st March, 2020 is Rs. 36,000. Salaries paid in advance at the end of previous year were Rs. 54,000. The amount of Salaries to be debited to income and Expenditure Account for the year ended 31st March, 2020 will be

(a) Rs. 54,000.

(b) Rs. 36,000.

(c) Rs. 90,000.

(d) Rs. 18,000.

 

8. Title of the account which shows Surplus/Deficit of NPO is

(a) Cash Book.

(b) Income and Expenditure Account.

(c) Receipts and Payments Account.

(d) Balance Sheet.

 

9. Main source of Income for a Not-for-Profit Organisation is

(a) Rent.

(b) Salaries.

(c) Donations and Subscriptions.

(d) Sale of Assets.

 

10. Identify revenue receipt from the following:

(a) Donations for Building

(b) Subscription

(c) Life Membership Fees

(d) Legacy donation for Library.

 

11. Identify capital receipt from the following:

(a) Life Membership Fees

(b) Rent Receipt

(c) Entrance fees

(d) Sports expenses.

 

12. General Donation received by NPO is shown in the

(a) Credit side of income and Expenditure Account,

(b) Debit side of income and Expenditure Account

(c) Liabilities side of Balance Sheet

(d) Assets side of the Balance Sheet.

 

13. Specific Donation received by NPO is shown in the

(a) Credit side of Income and Expenditure Account,

(b) Debit side of Income and Expenditure Account

(c) Liabilities side of Balance Sheet.

(d) As is decided by the management.

 

14. Income and Expenditure Account is a

(a) Real Account.

(b) Nominal Account.

(c) Personal Account.

(d) Valuation Account.

 

15. Receipts and Payments Account is a

(a) Real Account.

(b) Nominal Account.

(c) Personal Account.

(d) Revenue Account.

 

16. Identify the item which is not shown under Receipts and Payments Account in case of NPO.

(a) Salaries

(b) Rent

(c) Depreciation

(d) Honorarium

 

17. Choose NPO from the following:

(a) Reliance Industries Limited

(b) Indian Hoc Important Federation

(c) Infosys Ltd.

(d) Private Hospital

 

18. Furniture as on 31st March, 2019 Rs. 4,40,000. Furniture (having Book value as on 1st April, 2018 of Rs. 40,000) sold at a loss of 20% on 31st December, 2018. Furniture is depreciated @ 10% p.a. Furniture costing Rs. 3,00,000 was also purchased on 1st October, 2018. Calculate Loss on sale of furniture.

(a) Rs. 9,400

(b) Rs. 6,400

(c) Rs. 8,000

(d) Rs. 7,400

 

19. Subscriptions received in advance by a club are shown

(a) in the credit side of the Income and Expenditure Account.

(b) in the assets side of the Balance Sheet.

(c) in the liabilities side of the Balance Sheet.

(d) in the payments side of Receipts and Payments Account

.

20. Subscription received during the year 2019-20: Rs. 1,50,000. Outstanding Subscription as on 31st March, 2019: Rs. 1,00,000. The amount shown as subscription receipt will be

(a) Rs. 50,000.

(b) Rs. 1,50,000.

(c) Rs. 1,00,000.

(d) Rs. 1,25,000.

 

21 Subscription received during the year 2019-20: Rs. 1,50,000; Subscription Rs. 75,000 is outstanding:

(a) Rs. 1,50,000

(b) Rs. 75,000

(c) Rs. 2,25,000

(d) Rs. 2,00,000.

 

 

22. Credit purchase of stationery is Rs. 64,000, which is 80% of total purchase, compute cash purchase of stationery,

(a) Rs. 16,000

(b) Rs. 24,000

(c) Rs. 8,000

(d) Rs. 40,000.

 

23. Out of the following, which one is a special receipt?

(a) Subscriptions

(b) Rent Received

(c) Contribution for Annual Dinner

(d) General Donation

 

24. Out of the following, which is Unrestricted Fund?

(a) Annuity Fund

(b) Sports Fund

(c) Capital Fund

(d) Endowment Fund

 

25. Subscription received in advance during the current year is

(a) an income.

(b) an asset.

(c) a liability.

(d) None of these.

 

26. If there is a 'Match Fund', then Match Expenses and Match Incomes are transferred to

(a) Income and Expenditure A/c.

(b) Assets side of Balance Sheet.

(c) Match Fund in Liabilities side of Balance Sheet.

(d) Both Income and Expenditure A/c and to Balance Sheet.

 

 

Answers

Multiple Choice Questions (SET B)

Select the correct alternative:

1.    (a); 2. (a); 3. (b); 4. (b); 5. (b); 6. (b); 7. (c);  

8. (b); 9. (c); 10. (b); 11. (a); 12. (a); 13. (c); 14.(b);

15. (a); 16. (c); 17. (b); 18. (d); 19. (c); 20.(a);

21. (c); 22. (a); 23. (c); 24. (c); 25. (c); 26. (c)

 

 

 

 

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