Tag: meaning and characteristics of not-for-profit organisation
Questions Related to meaning and characteristics of not-for-profit organisation
Receipts and Payments Account is in nature of _______________.
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Personal Account
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Artificial Personal Account
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Real Account
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Valuation Account
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. Its basically a summary of cash book, it records cash expenses and incomes of all nature and is prepared on cash basis. It follows the rule of a real account, debit what comes and credit what goes out. The receipts are credited and the payments are debited.
Which of the following is correct treatment of legacy received by non-profit organization?
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It appears on the credit side of the income and expenditure account. It should be treated as revenue item as it is of recurring nature.
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It appears on the credit side of the receipts and payments account. It should be capitalized being an item of non recurring nature and should be shown on the asset side of the balance sheet.
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It appears on the debit side of the receipts and payments account and on credit side of income and expenditure account.
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It appears on the debit side of the receipts and payments account. It should be capitalized being an item of non recurring nature.
Legacy is generally shown on the debit side of receipts and payments accounts. Legacy is the property received by virtue of a will of a person or after his death. Its a capital receipt and hence would not appear in income and expenditure account and will be added to the capital in Balance sheet. It should be capitalised being an item of non-recurring nature.
Which of the following is not recorded in the Receipts and Payments Account:
W. Outstanding subscription
X. Prepaid insurance premium
Y. Depreciation
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W and X
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Y and W
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Y only
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All W, X and Y
Receipt and payment account records all cash receipts and cash payments during the year whether related to current year, previous year or future year. It records both capital and revenue nature receipts and payments. Depreciation being non-cash item is not recorded in this account. Outstanding subscription received and prepaid insurance Premium being cash items are recorded in this account.
Income and Expenditure Account is a ______________.
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Nominal Account
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Real Account
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Representative Personal Account
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Personal Account
Option A is correct. Nominal account is related to expenses or losses and incomes or gains. Income and Expenditure account is an account prepared by non trading concerns to ascertain surplus or deficit of income over expenditure for a particular period. So Income and Expenditure account is a Nominal account.
Income and Expenditure Account records income and expenditure items of ______________.
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Both capital and revenue nature
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Only capital nature
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Only revenue nature
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Only revenue nature related to the current period
Income and expenditure account is 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. It records all incomes and expenses on accrual basis which means as and when its realised or incurred. Hence items related with the current period are to be recorded only.
Excess of income over expenditure is also known as ____________.
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Profit
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Surplus
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Lass
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Deficit
Surplus is the excess of income over expenditure. A credit balance in the Income and expenditure account shows surplus. It is the profit earned and should be added to the capital fund on the liabilities side of the balance sheet.
How much amount as Rent A/c will be debited to income & Expenditure A/c ?
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Rent Paid (-) Outstanding Rent Of current year (+) Outstanding Rent of last year
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Rent Paid (+) Outstanding Rent Of current year (+) Outstanding Rent of last year
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Rent Paid (-) Outstanding Rent Of current year (-) Outstanding Rent of last year
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Rent Paid (+) Outstanding Rent Of current year (-) Outstanding Rent of last year
Rent a/c records the various entries regarding rent like advance payment, outstanding rent.
Subscription A/c will be credited to Income & Expenditure A/c after making following adjustments:
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Subscription Received
(+) Outstanding Subscription for current year
(-) Outstanding Subscription for of last year
(+) Subscription received in advance of last year
(-) Subscription received in advance of next year -
Subscription Received
(+) Outstanding Subscription for current year
(+) Outstanding Subscription for of last year
(-) Subscription received in advance of last year
(-) Subscription received in advance of next year -
Subscription Received
(-) Outstanding Subscription for current year
(-) Outstanding Subscription for last year
(+) Subscription received in advance of last year
(+) Subscription received in advance of next year -
Subscription Received
(-) Outstanding Subscription for current Year
(+) Outstanding Subscription for of last year
(-) Subscription received in advance of last year
(+) Subscription received in advance of next year
Subscription amount that has to be credited in the income & expenditure account is calculated after adjusting the various subscription amounts.
How much amount as Staff Salary A/c will be debited to Income & Expenditure A/c ?
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Staff Salary paid (+) Salary paid in advance for the next year (-) Salary paid in advance in last year for current year
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Staff Salary paid (-) Salary paid in advance for the next year (+) Salary paid in advance in last year for current year
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Staff Salary paid (+)Salary paid in advance for the next year (+)Salary paid In advance in last year for current year
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Staff Salary paid (-)Salary paid in advance for the next year (-) Salary paid in advance in last year for current year
Salary paid to staff is divided into two parts, salary paid in advance for current and the previous year.
Purchase of a fixed asset by a non-profit organization will be shown in _____________.
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Income and Expenditure account
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Receipts and Payments Account
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Both (A) and (B)
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Neither (A) nor (B)
Receipt and payment account records all cash receipts and cash payments during the year whether related to current year, previous year or future year. It records both capital and revenue nature receipts and payments. Purchase of fixed assets includes cash. It is recorded in Receipts and Payments Account. It is not a revenue nature item. It is not recorded in Income and Expenditure Account.