Not for Profit Ogranisation | True False | Multiple Choice Questions

 

 ACCOUNTING FOR NOT FOR PROFIT ORGANISATION (NPO)
TRUE-FALSE / MULTIPLE CHOICE QUESTIONS (MCQS)

True or False:

1) Receipts and Payments Account is a real account. 

Ans: True

2) Receipts and Payments account is a summary of cash transactions. 

Ans: True

3) Receipts and Payments account is an Expenses Account. 

Ans: False

4) Receipts and Payments account is equivalent to the Profit and Loss Account. 

Ans: False (it is equivalent to CAsh Book)

5) Receipts and Payments account shows the cash position. 

Ans: True

6) Receipts and Payments account is similar to Cash book. 

Ans: True

7) Receipts and Payments Account records only the revenue receipts and revenue payments. 

Ans: False

8) Receipts and Payments Account records only capital receipts and capital payments. 

Ans: False

9) Receipts and Payments Account records both revenue and capital receipts and payments. Received or paid during a year. 

Ans: True

10) A Receipts and Payments Account is followed by a balance sheet. 

Ans: False

11) Receipts and payment account shows receipts and payments for a particular period. 

Ans: True

12) Balance of Receipts and Payments Account at the close of the period is the profit earned by the concern. 

Ans: False

13) A non-profit organization never undertakes trading activities.

Ans: False, ( A Non-Profit Organisation sometimes undertakes Incidental Trading activities)

14) Income and Expenditure Account is a real account. 

Ans: False, (it is a Nominal Account)

15) Income and Expenditure account is similar to profit and loss account. 

 Ans: True

16) College is a Not-for-profit organisation. 

Ans: True

17) Income and Expenditure Account of non-trading concern is equivalent to profit and loss account of a trading concern. 

Ans: True

18) An Income and Expenditure Account open with a balance. 

Ans: False

19) An Income and Expenditure Account is not followed by a balance sheet. 

Ans: False

20) In Income and Expenditure account includes only revenue items. 

Ans: True

21) A credit balance of Income and Expenditure denotes an excess of expenses over incomes. 

Ans: False

22) A debit balance of income and expenditure denotes an excess of expenses over incomes. 

 Ans: True

23) Subscription in arrear is shown on the credit side of income and expenditure account and assets side of balance sheet. 

Ans: True

24) Admission fees should be treated as revenue unless the amount is pretty large. 

Ans: True

25) Profit on sale of furniture is credited to income and expenditure account. 

Ans: True

26) Life membership fees should be capitalized. 

Ans: True

27) If there is a specific fund for the prize, then income or expenditure relating to prize distribution should not be shown in the income and expenditure account.

Ans: True

28) Income from investment of any fund is added with the respective firm. 

Ans: True

29) Receipts and Payments account is prepared on the cash basis of accounting. 

Ans: True

30) Income and expenditure account is prepared on the accrual basis of accounting.

Ans: True

31) Donation for specific purposes is always capitalized. 

Ans: True

32) Income derived from the specific fund investment is credited to the Specific Fund Account. 

Ans: True

33) The whole of the sale value of fixed assets is treated as income. 

Ans: False, (It is a capital receipt)

34) Capital Grant received from the Govt. is a capital income & not to be credited to the Income and Expenditure Account. 

Ans: True