Tag: meaning and characteristics of not-for-profit organisation

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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 Receipt and Payment Account ending with the closing balance of _______ and _______.

  1. Bank, bond

  2. Cash, bank

  3. Cash, receivable

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

The Receipt and Payment account starts with opening balance of cash and bank and end with the closing balance of cash and bank. 

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 receipt and payment account generally shows _________________.

  1. A surplus

  2. A credit balance

  3. A debit balance

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

A receipt and payment account generally shows a debit balance. To ascertain any missing item of receipt or payment, generally cash book summary is prepared.

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 receipt and payment account records both ______ and  _____ nature items.

  1. Capital, Revenue

  2. Revenue, Deferred

  3. Deferred, Capital

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

Receipt and Payment account is a summary of cash/bank transactions of NPO for specialized accounting period. This Statement records both capital and revenue nature items.

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

In receipt and Payment account cash transactions are recorded where as in Income and expenditure account:

  1. Cash transactions are recorded.

  2. Non-cash transactions are recorded.

  3. Both (a) and (b) are correct.

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

Receipt and Payment account is a summarized statement of all cash transactions during an accounting year. Income and Expenditure account is the account through which surplus or deficit of a non-profit-seeking concern is ascertained.

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 Income and Expenditure account records:

  1. Income on the left hand side and expenditure on the right hand side of A/c.

  2. Income on the right hand side and expenditure on the left hand side of A/c.

  3. Income on any side of the account and expenditure on the other side of A/c.

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

Income and expenditure account records income on the right hand side and expenditure on the left hand side. An Income and expenditure account is just like Profit and Loss account  where expenses and losses are debited and income and gains are credit. 

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

Receipt and Payment account is prepared on the ______ day of accounting year.

  1. middle

  2. satarting

  3. last

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

Receipt and Payment account is prepared on the last day of accounting year. This account records transaction related to cash in the accounting year.

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 are recorded on the _______ side while payments are entered on the ______ side.

  1. credit, debit

  2. debit, credit

  3. debit, debit

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

Receipt and Payment account is a summary of cash book where receipts are recorded on debit side and payments are recorded on credit side.

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

Debit balance of receipts and Payments account indicate:

  1. The loss incurred during the period.

  2. The excess of incomes over expenditure of the period.

  3. The total cash payments during the period.

  4. Cash in hand or bank balance on the date of the balance.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A receipts and payment account is just like a cash account hence it begins with opening balance and ends with closing balance of cash. Hence the debit balance of receipts and payments account just like cash account reflects closing balance of cash at the end of the year after taking into account all the payments and receipts.

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.