Tag: accounts of 'not for profit' concerns

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Questions Related to accounts of 'not for profit' concerns

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.

'

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.