Tag: book keeping and accountancy

Quizzes (126) Questions (1524)

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

In the Not-For-Profit Micro Finance Institutes.
Which among the following are included?

  1. Societies

  2. Public Trusts

  3. Non-Profit Companies

  4. All of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Not-for-profit microfinance institutions can be structured as societies, public trusts, or non-profit companies (Section 8 companies).

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

 Funds raised by such Not-for-Profit organisations are credited to ________. 

  1. Capital fund

  2. Security reserve

  3. Security premium

  4. General fund
Reveal answer Fill a bubble to check yourself
A,D Correct answer
Explanation

Funds raised by such Non-for-Profit organisations are credited to capital fund or general fund. The excess of assets over liabilities is treated as capital fund or general 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

Which statement are prepared by the Not-for-profit Organisations?

  1. Receipt and Payment Account

  2. Income and Expenditure Account

  3. Balance Sheet

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
The statements prepared by Non-for-profit organisations are:-
1) Receipt and payments account - It is a real account just like cash account. Its prepared at the end of the year. All receipts are recorded on the debit side and expenses on the credit side. 
2) Income and expenditure account - Its a nominal account and is just like a profit and loss account. All the expenses are recorded on the debit and side and incomes on the credit side. 
3) Balance sheet - Balance sheet is prepared normally. The difference between assets and liabilities is shown as capital fund or general 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

Following are items of capital fund account:

  1. Legacies

  2. Life membership fee

  3. Donation

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

In Non-profit organizations, the capital funds are accumulated along with capital receipts and receipts that are capitalized by further increasing the surplus or decrease by the deficit during the year. Legacies, Life membership fee and donation are capital receipt because these are of non-recurring nature. Capital receipts accumulate and form capital fund account of Non-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

Not-for-Profit organisations affairs are usually managed by ________.

  1. manager committee

  2. employees committee

  3. executive committee

  4. investors committee
Reveal answer Fill a bubble to check yourself
C 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. They also have to maintain proper accounts and prepare financial statements. '

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 organisation do not have to manufacture,purchase or sell goods and may not have credit transactions so they don't have to maintain _________account.

  1. trading Account

  2. balance sheet

  3. profit and Loss Account

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

Non for profit organisations do not manufacture, purchase or sell goods and may not have credit transactions so they do not have to maintain trading account and profit and loss account. 

The financial statements prepared by Non for profit organisations are Receipts and payment account, income and expenditure account and 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

A sports club is a trading concern.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Trading concern is an entity that derives its products for sale, thereby revenue, through purchasing products for sale from other producers /manufacturers for resale to their customers base. A sports club is not a trading concern as it does not perform any such tasks. 

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

A not-for-profit entity has all of the following characteristic except that it will ______________.

  1. operate for purposes other than to provide goods or service at a profit

  2. not have a positive fund balance

  3. not possess ownership interests like a corporation

  4. receive significant contributions from providers who do not expect returns.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

As the name suggest not-for-profit entity works to provide social services and doesn't relate any of its activity with profit.


A positive fund balance is obtained when the entity earns profits due an economic transaction. Since, the company is not involved in any kind of profit and hence it will not have a positive fund 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 accounting information provided by such organisations is meant for the _______ and potential contributors meet the statutory requirement.

  1. past

  2. present

  3. future

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

Not-for-Profit organisations refer to the organisations that are used for the welfare of the society and are set up as charitable institutions which function without any profit motive. Their main aim is to provide service to a specific group or the public at large. Normally, they do not manufacture, purchase or sell goods and may not have credit transactions. Hence, they need not maintain many books of account (as the trading concerns do) and Trading and Profit and Loss Account. The funds raised by such organisations are credited to capital fund or general fund. The major sources of their income usually are subscriptions from their members, donations, grants-in-aid, income from investments, etc.

The main characteristic of such organisation is the accounting information provided by such organisations is meant for the present and potential contributors and to meet the statutory requirement.

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 are organised as charitable trusts and subscribers to such organisation are called _________.

  1. owners

  2. members

  3. shareholders

  4. directors
Reveal answer Fill a bubble to check yourself
B 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. They also have to maintain proper accounts and prepare financial statements. 

'