Tag: book keeping and accountancy

Quizzes (126) Questions (1524)

Questions Related to book keeping and accountancy

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

Amount received from sale of scraps by a charitable hospital is treated as:

  1. Income

  2. Expense

  3. Assets

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

Sale of scraps is a routine activity which generates indirect income for any entity whose sole objective is not to deal in scraps. Hence, amount received from sale of scraps by a charitable hospital is treated as an income and booked in the income and expenditure account.

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

Legacy is generally shown on the____________.

  1. Debit side of Receipts and Payments A/c

  2. Credit side of Receipt and Payments A/c.

  3. Debit side of Income and Expenditure A/c.

  4. Credit side of Income and Expenditure A/c
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Option A is correct. Legacy is the amount which a not for profit organisation receive as per the will of a deceased person. As this is a receipt it is recorded on debit side of Receipts and Payments A/c. 


On credit side all payments are shown. It is being an item of non recurring nature shown on liabilities side of Balance Sheet not in Income and Expenditure A/c. 

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

Excess of revenue income over revenue expenditure is termed as loss.

  1. True

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

Excess of revenue income over revenue expenditure is not a loss rather it is net income. Net income is one of the key indicators of company profitability, along with gross margin and before tax income. For example - revenue of ₹ 10,00,000 and expenses of ₹900,000 yield net income of ₹100,000. In this example, if the amount of expenses had been higher than revenues, the result would have been termed a net loss rather than a net income. 

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

Select the most appropriate alternative from those given below:
Interest on Investment is ______ of business concern.

  1. a profit

  2. a loss

  3. an expense

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

Interest on Investment is an income of business concern. Investment is purchasing of an asset with the goal of generating income. Likewise interest in investment will be recorded as an income. 

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

Rent paid to the landlord is debited to _____.

  1. Rent A/c

  2. Drawing A/c

  3. Landlord A/c

  4. Profit and loss a/c
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Rent paid is an expense for the business. Expense is a nominal account. Rule of nominal account says that all the expenses and losses should be debited. hence Rent paid is to be debited to Rent A/c.

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

Sales proceed of goods sold received is _________.

  1. Revenue Receipt

  2. Expenses

  3. Assets

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

Revenue receipts are those receipts that are received in the conduct of ordinary and day-to-day business activities. for e.g. receipts from sale of goods and services are the main source of revenue receipts. 

These receipts or incomes are received frequently in the normal course of business operations. Revenue receipts are shown on the credit side of Income and Expenditure account.

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

The gross inflow of economic benefits is referred to as ________.

  1. Income

  2. Capital

  3. Asset

  4. Bank overdraft A/c
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Option A is correct. Income includes both revenues and gains. Capital refers to amount invested in the business. It is not inflow of benefits. It is the amount invested by the owner in business. Assets refers to things which have future economic value and bank overdraft is the amount withdrawn in excess of the amount deposited in bank. So, inflow of economic benefits is referred to as Income. 

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

Receipts and Payments Account is a ____________.

  1. Income Statement

  2. Cash Book

  3. Summary of the Cash Book

  4. Statement of Financial Position
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
Receipt and payments account 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. It is basically a summary of cash book, it records all cash transactions of all nature revenue and capital. 

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

To which account unrecorded asstes/liabilities are transferred?

  1. Partners capital A/c

  2. Revaluation A/c

  3. Profit and loss appropriation A/c

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

b'At the time of retirement or death of a partner, the books of accounts of firm have to be settled. The outgoing partner or his legal representatives have to be paid their dues. For calculation of correct amount to be paid, it is important that all assets and liabilities must be recorded at their current values and if there is any unrecorded assets and liabilities that should also be recorded. For this. a revaluation account is opened. A revaluation account is prepared to ascertain net profit or loss on revaluation of assets and liabilities and bringing unrecorded items into books. '

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

Receipts and Payments Account is prepared on -
(I) Accrual basis of accounting
(II) Cash basis of accounting 
(III)  Hybrid basis of accounting
The correct answer is -

  1. (I) only

  2. (I) or (II)

  3. Any of (I) or (II) or (III)

  4. (II) only
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Option D is correct. Receipts and payments Account is prepared on cash basis of accounting. It is a summarized cash book. All the cash receipts during the whole year is recorded on debit side. All the cash payments during the whole year is recorded on credit side. incomes or expenses that do not involve the inflow of cash are not recorded in this account.