Tag: prepration of income and expenditure account and balance sheet

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Questions Related to prepration of income and expenditure account and balance sheet

Multiple choice commercial applications financial accounting and reporting balance sheet, classification of assets and liabilities accounting records of not-for-profit organisations accounting procedure for not-for-profit organisations prepration of income and expenditure account and balance sheet income and expenditure account prepration of income and expenditure account accounting treatment for npo's

The capital of a non-profit organization is generally known as __________.

  1. Equity

  2. Accumulated fund/Capital fund

  3. Cash fund

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

The capital for a non-profit organisation is not funded by the owner and thus has to be mentioned as capital fund. This is because capital fund is that account which records all those transactions which are related to capital nature.

Multiple choice book keeping and accountancy accounting for not-for-profit organisation financial accounting and reporting prepration of income and expenditure account and balance sheet accounting procedure for not-for-profit organisations prepration of income and expenditure account

Surplus of Income and Expenditure Account is deducted from the capital/general fund.

  1. True

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

False. Surplus of Income and expenditure account is added to the capital/general fund. Surplus is arrived when there is excess of income over expenditure hence it is addition to the and fund and should be added to the capital fund. 

Multiple choice book keeping and accountancy accounting for not-for-profit organisation financial accounting and reporting prepration of income and expenditure account and balance sheet accounting procedure for not-for-profit organisations prepration of income and expenditure account

State True or False:
Scholarships granted to students out of funds provided by government will be debited to Income and Expenditure Account. 

  1. True

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

False. Scholarships granted to students out of funds provided by government will be deducted from the fund provided by government. If there appears any fund respective incomes/expenses will added/deducted from the respective fund. 

Multiple choice book keeping and accountancy accounting for not-for-profit organisation financial accounting and reporting prepration of income and expenditure account and balance sheet accounting procedure for not-for-profit organisations prepration of income and expenditure account

If there appears a sports fund, the expenses incurred on sports activities will be shown on the debit side of Income and Expenditure Account. 

  1. True

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

False. If there appears a sports fund, the expenses incurred on sports activities will be deducted from the sports fund. If there appears any fund respective incomes/expenses will added/deducted from the respective fund. 

Multiple choice book keeping and accountancy accounting for not-for-profit organisation financial accounting and reporting prepration of income and expenditure account and balance sheet accounting procedure for not-for-profit organisations prepration of income and expenditure account

Income and expenditure accounts show ______________.

  1. Cash available to an organization

  2. Closing capital of an organization

  3. Cash available in the bank account

  4. Surplus or deficit for the current accounting Period
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Income and Expenditure account is prepared to calculate the surplus or deficit with the company for current accounting period. The previous year transaction and the various cash transactions are not considered while preparing this account beacuse such transaction are related to receipt and payment account.

Multiple choice book keeping and accountancy accounting for not-for-profit organisation financial accounting and reporting prepration of income and expenditure account and balance sheet accounting procedure for not-for-profit organisations prepration of income and expenditure account

Given : Stock of stationery on Jan. 1, 2015 Rs 400
Stock of stationery on Dec. 31, 2015 Rs 100
Payment for stationery during 2015 Rs 1,200
Creditors for stationery on Dec. 31, 2015 Rs 150.
What is the amount of stationery that will be posted to the Income and Expenditure A/c for the year ending Dec. 31, 2015?

  1. Rs 1,150

  2. Rs 1,650

  3. Rs 850

  4. Rs 1,050
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Calculation of Amount of stationary for the year ended 31st March, 2015

Opening stock of stationary ,1st Jan 2015  =   400
+ Payment made during the year                =  1200
+ Creditors for stationary on 31st Dec         =  150
-  Closing stock as on 31st Dec ,2015          =  (100)
                                                                       =  1650 Rs.

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns financial accounting and reporting prepration of income and expenditure account and balance sheet accounting procedure for not-for-profit organisations receipts and payments receipts and payments account

Subscription is paid___________.

  1. on weekly basis

  2. on daily basis

  3. on monthly basis

  4. on annual basis
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Subscription is a payment made to receive or be given access to certain services or information for a specific period of time. It is usually paid on annual basis. 

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns financial accounting and reporting prepration of income and expenditure account and balance sheet accounting procedure for not-for-profit organisations receipts and payments receipts and payments account

Any donation received for a specific purpose is a ___________.

  1. Liability

  2. Assets

  3. Revenue Receipts

  4. Capital Receipts
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

If donation is received without a specific purpose, it is a revenue receipt. But if donation is received for a specific purpose, this is considered as capital receipts and all expenses incurred towards the specific purpose should be set off from this receipt.

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns financial accounting and reporting prepration of income and expenditure account and balance sheet accounting procedure for not-for-profit organisations receipts and payments receipts and payments account

In case a sports fund is kept, expenses on account of sports events should be ____________.

  1. charged to sports fund

  2. charged to the income and expenditure account

  3. taken to the balance sheet on the asset side

  4. taken to the balance sheet on the liability side
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Specific funds are utilized for the specific activities only. If any sports events is organized, all expenses pertains to such event should be debited to sports fund account.

Multiple choice book keeping and accountancy accounts of 'not for profit' concerns financial accounting and reporting prepration of income and expenditure account and balance sheet accounting procedure for not-for-profit organisations receipts and payments receipts and payments account

What is Subscription?

  1. Life time fees

  2. Membership fee

  3. Cash

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

Subscription is an agreement to receive something for providing access to something. Membership fees is a subscription as a person pays money to become a member of an organisation and is usually paid annually.