Tag: accounting record of non-trading organisations
Questions Related to accounting record of non-trading organisations
The accounting information provided by such organisations is meant for the _______ and potential contributors meet the statutory requirement.
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past
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present
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future
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none of the above
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.
Not-for-profit organisations are organised as charitable trusts and subscribers to such organisation are called _________.
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owners
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members
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shareholders
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directors
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.
'Non-profit earning companies are mostly formed as ______________.
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Companies limited by shares
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Companies limited by guarantee
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Unlimited companies
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None of the above
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.
The surplus generated in the form of excess of income over expenditure is not distributed amongst the _________.
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owners
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members
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directors
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shareholders
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 simply ________ in the capital fund.
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added
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subtracted
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divided
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multiplied
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.
Receipt and Payments Account is summary of all capital receipts and payments.
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True
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False
False. Receipts and payment account records the receipts and payments of all nature. Receipts and payments account records all the cash transactions of the business. It is basically a summary of cash transactions all incomes are recorded on the credit side and expenses are shown on the debit side.
Receipts and Payment Account does not differ between capital and revenue receipts.
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True
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False
True. Receipts and payments Account does not differ between capital and revenues receipts. Receipts and payment account records the receipts and payments of all nature. It records all the cash transactions of the business and is basically a summary of cash transactions. All incomes are recorded on the credit side and expenses are shown on the debit side.
State True or False:
Receipt and Payment Account records the receipts and payments of revenue nature only.
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True
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False
This statement is false. A receipt and payment account is a summarized cash book. It records all cash transactions whether it is revenue nature or capital nature. The Receipt and Payment account has debit side to record all receipts and credit side to record all payments made by not for profit organisation during a year. It records all the receipts and payments during a year whether related to current year, previous year or next year.
Receipt and payment Account is equivalent to profit and loss account.
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True
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False
False. Receipts and payments accounts is equivalent to cash account. Receipts and payment account records the receipts and payments of all nature. It records all the cash transactions of the business. It is basically a summary of cash transactions all incomes are recorded on the credit side and expenses are shown on the debit side
The Receipt and Payment account starts with the opening balance of ______ and _____.
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cash, bank
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bank, bills receivable
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bills receivable, bills payable
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none of the above
Receipt and Payment is a summarized statement of all cash transactions during an accounting year. Only cash transactions are recorded in Receipt and Payment accounts.