Tag: book keeping and accountancy

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Questions Related to book keeping and accountancy

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns accounting record of non-trading organisations features of not-for-profit organisation meaning and characteristics of not-for-profit organisation

Not-for-Profit Organisations earn their reputation on the basis of ________.

  1. customers satisfaction

  2. contributions to the welfare

  3. owners satisfaction

  4. all of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Non-for-profit organisations earn their reputation on the basis of contributions to the welfare. The are set up for the purpose of promoting science, commerce, social cause, education etc. Their main purpose is not to earn profit but to provide services. 

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns accounting record of non-trading organisations features of not-for-profit organisation meaning and characteristics of not-for-profit organisation

Not-for-Profit Organisations do not maintain_______account.

  1. capital

  2. cash

  3. bank

  4. income
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Non-for-Profit organisations do not maintain Capital account. They prepare income and expenditure account as profit and loss account, receipts and payments account as cash account and balance sheet. They do not maintain a capital account because of all the balance regarding the capital introduced and withdrawn are recorded in the balance sheet.

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns accounting record of non-trading organisations features of not-for-profit organisation meaning and characteristics of not-for-profit organisation

Main sources of income of Not-for-Profit organisations is _________.

  1. legacies

  2. donations

  3. subscriptions

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Main source of income of No-for-Profit organisation is legacies, donations and subscriptions. A non-for-Profit organisations is set up for promoting science, commerce, social cause etc. 

The main purpose is not to earn profits but to provide services. 
Legacy the income received  due to the death of a person who has mentioned the transfer of certain income in the will.
Donations are the major sources of such organisations. People usually donate a certain portion of their income for the welfare of the organisation.
Subscriptions are the side income of the not-for-profit organisation when a person subscribes for any activity in the various clubs inaugurated for societies's welfare. 

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns accounting record of non-trading organisations features of not-for-profit organisation meaning and characteristics of not-for-profit organisation

The main objective of not-for-profit organisations is _________.

  1. Gain profit

  2. Provide services

  3. Increase owners profit

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The main objective of non-for-profit organisations is providing services. The services provided by the not-for-profit organisations are meant to satisfy the needs of the people like joining as member and receive medicines at very low cost.

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns accounting record of non-trading organisations features of not-for-profit organisation meaning and characteristics of not-for-profit organisation

 The organisations which are set up for providing service are called as _____.

  1. Profit organisations

  2. Not-for-profit organisations

  3. Sole trader

  4. Company
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The organisations which are set up for providing services are called as not-for-profit organisations. They are set up for purpose other than profit for promoting science, religion, social cause etc. Hence, the organisation meant for a social cause are categorized as Not-for-profit organisation. 

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns accounting record of non-trading organisations features of not-for-profit organisation meaning and characteristics of not-for-profit organisation

If an organisation has followed the _______ entry system they must prepare a trial balance for checking the accuracy of the ledger accounts.

  1. single

  2. double

  3. manual

  4. computerised
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In a double entry system, every transaction has two effects. One is debit and other is credit. In Trial Balance, balances of all the ledger accounts are recorded. If debit side of trial balance matches with credit side it shows the mathematical accuracy of all the accounts. 

So, if an organisation has followed the double entry system they must prepare a trial balance.

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns accounting record of non-trading organisations features of not-for-profit organisation meaning and characteristics of not-for-profit organisation

The funds raised by not-for-profit organisations are credited to _________.

  1. capital fund

  2. partners' capital

  3. cash

  4. owner's fund
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The funds raised by not-for-profit-organisation are transferred to the capital fund. This is because like any other profit earning organisation they don't have a capital account to be shown in balance sheet. So, the excess of assets over liabilities is credited to capital fund. 

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns accounting record of non-trading organisations features of not-for-profit organisation meaning and characteristics of not-for-profit organisation

Not-for-Profit organisations refer to the organisations that are used for the welfare of the _________ and are st up as charitable institutions which function without any profit motive.

  1. company

  2. society

  3. manager

  4. director
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The not-for-profit organisations are the ones which are responsible for the welfare of society and are a type of places which run without considering the profit. This type of organisation is funded mainly by the donations given by people and in return they are obliged to take care of the welfare of the society.  

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns accounting record of non-trading organisations features of not-for-profit organisation meaning and characteristics of not-for-profit organisation

Which of the following is generally considered as a non-profit oriented organization ?

  1. Charitable organization

  2. Corporation

  3. Audit firms

  4. Insurance companies
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A Charitable organisation is an organization whose main objective is social well being. Charitable organisations often depend on donations. Corporation, Audit firms and Insurance companies work for profit motive. They can not be considered as Non- profit organizations. 

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns accounting record of non-trading organisations features of not-for-profit organisation meaning and characteristics of not-for-profit organisation

The affairs of the not-for-profit organisations are usually managed by a managing/executive committee elected by its _______.

  1. members

  2. owners

  3. shareholders

  4. directors
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

b'

Not for Profit organisations are formed for providing service to specific group or public at large such as education, health care, sports and so on. These are organised as charitable trusts/ societies and subscribers to such organisations are called members. These organisations have service as the main objective. Normally these organisations do not undertake any business activity and are managed by trustees/executive committee. these committee is elected by its members.

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