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

Non-profit earning companies are mostly formed as ______________.

  1. Companies limited by shares

  2. Companies limited by guarantee

  3. Unlimited companies

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

Limited by guarantee companies are formed by not for profit organisations, such as sports clubs, charitable organisations etc. A company limited by guarantee does not have any shares or stakeholders but is owned by guarantors who agree to pay a set amount of money towards company debts. In case of NPO, this amount is known as subscription. Each member is responsible towards NPO till the subscription amount only. 

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 surplus generated in the form of excess of income over expenditure is not distributed amongst the _________.

  1. owners

  2. members

  3. directors

  4. shareholders
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 surplus generated in the form of excess of income over expenditure is not distributed amongst the members. It is simply added in the capital fund. This is one of the main characteristic of such organisations

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 surplus generated in the form of excess of income over expenditure is simply ________ in the capital fund.

  1. added

  2. subtracted

  3. divided

  4. multiplied
Reveal answer Fill a bubble to check yourself
A 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 surplus generated in the form of excess of income over expenditure is not distributed amongst the members. It is simply added in the capital fund. This is one of the main characteristic of such organisations

Multiple choice book keeping and accountancy analysis of financial statements preparation of common size statements comparative statements and common-size statements tools of financial statement analysis - comparative and common-size statements

Common-size Income Statement is that statement in which amount of Revenue from Operations is taken as 100 and all other amounts are expressed as percentage thereof.

  1. True

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

True. Common-size Income statement is the vertical analysis of Income Statement. A vertical analysis is shows all items as percentages and not in absolute figures which provides better comparison. Each line item is expressed as a percentage figure of the base figure within the statement. The base is always shown as 100. 

Multiple choice book keeping and accountancy analysis of financial statements preparation of common size statements comparative statements and common-size statements tools of financial statement analysis - comparative and common-size statements

A financial statement that shows both rupees and percentages in the report is referred to as ______________.

  1. A Balance sheet

  2. A Common size statement

  3. A Proportional financial statement

  4. A Relative statement of equity
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A common size statement expresses each item in the financial statement as a percentage of a base figure (like total assets or total revenue), allowing for easier comparison.

Multiple choice book keeping and accountancy analysis of financial statements preparation of common size statements comparative statements and common-size statements tools of financial statement analysis - comparative and common-size statements

Which of the following is/are objective of common-size income statement?

  1. To analyse change in individual items of statement of Profit and Loss.

  2. To study the trend in different items of Revenues and Expenses.

  3. To assess the efficiency.

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

Common-size income statements are used to analyze changes in individual items, study trends in revenues and expenses, and assess the overall efficiency of the business operations.

Multiple choice book keeping and accountancy analysis of financial statements preparation of common size statements comparative statements and common-size statements tools of financial statement analysis - comparative and common-size statements

Common-size Balance Sheet shows _______________.

  1. Assets, Equity and Liabilities in absolute values.

  2. Assets and Liabilities as percentage of total assets or total equity and liabilities.

  3. Both (a) and (b)

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

A common-size balance sheet expresses all items as a percentage of a common base, typically total assets or total equity and liabilities. This allows for easier comparison between companies of different sizes or over different time periods.

Multiple choice book keeping and accountancy analysis of financial statements preparation of common size statements comparative statements and common-size statements tools of financial statement analysis - comparative and common-size statements

Common-size Income Statement is the vertical analysis of Income Statement.

  1. True

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

True. Common-size Income statement is the vertical analysis of Income Statement. A vertical analysis is shows all items as percentages and not in absolute figures which provides better comparison. Each line item is expressed as a percentage figure of the base figure within the statement. 

Multiple choice book keeping and accountancy analysis of financial statements preparation of common size statements comparative statements and common-size statements tools of financial statement analysis - comparative and common-size statements

Objectives of common-size income statement is/are ________________.

  1. To analyse change in individual items of statement of profit and loss.

  2. To study the trend in different items of revenues and expenses.

  3. To assess the efficiency.

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

Objectives of common-size income statement are to analyse change in individual items of statement of profit and loss, to study the trend in different items of revenues and expenses and to assess the efficiency of the enterprise. 

Multiple choice book keeping and accountancy analysis of financial statements preparation of common size statements comparative statements and common-size statements tools of financial statement analysis - comparative and common-size statements

'To determine the trend of different items of statement', is one of the objectives of common-size statements.

  1. True

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

True. To determine the trend of different items of statement is one of the objectives of common size statements. It measure the relationship of different items of financial statements with a common variable.