FS of Non profit Organisation Test

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FS of Non profit Organisation Test - 1

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Weekly Quiz Competition

Question 1
1 / -0

Which form of financing is allowed for a nonprofit organization?

A
Sale of equity securities

B
None

C
Both

D
Debt

Solution

Explanation:

NPO are allowed to take debt for meeting their capital expenditure.
Question 2
1 / -0

_____ is a amount received by a non profit organization as per the WILL of a deceased person

A
Endowment

B
Annuity

C
Prize

D
Legacy

Solution

Explanation:

Legacy is an amount of money or property left to someone in a will of a decased person. It is an liability for NPO which is to be shown in balance sheet.
Question 3
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Which of the following is true relating to Income and expenditure account

A
Give fair idea of earned position

B
Adjustments relating to prepaid and outstanding expenses etc. are made

C
An assets account

D
Records all transactions without distinguishing among current , previous and succeeding accounting periods

Solution

Explanation:

Income and expenditure account shows the amount earned and incurred during a year after adjusting all prepaid and outstanding amount.
Question 4
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Contribution received by a Non-profit organisation is shown in the statement of activities under the caption

A
Both

B
Capital

C
Revenue

D
None

Solution

Explanation:

A nonprofit's statement of activities is issued instead of the income statement which is issued by a for-profit business which shows revenue such as contributions, program fees, membership dues, grants, investment income, and amounts released from restrictions.All these contribution are shows under the head revenues in the statement of activity.
Question 5
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A nonprofit organization's assets that have been designated by its board of directors for a specific project should be reported on the external financial statements as__________________ net assets.

A
Permanently restricted

B
Unrestricted

C
Temporarily restricted

D
None

Solution

Explanation:

If a donor does not specify a restriction on his or her contribution, the amount received by the nonprofit is recorded as an asset and these are called unrestricted net assets. Unrestricted contribution revenues (reported on the statement of activities) also cause the amount of unrestricted net assets to increase.

Hence, A nonprofit organization's assets that have been designated by its board of directors for a specific project should be reported on the external financial statements as unrestricted net assets.
Question 6
1 / -0

Normally the principal portion of an endowment will be classified as _________________ net assets.

A
Unrestricted

B
None

C
Temporarily restricted

D
Permanently restricted

Solution

Explanation:

Permanently Restricted Assets are Assets of a not-for-profit organization that come with certain restrictions. Permanently restricted assets are any assets that are given to a not-for-profit by an outside individual or agency with restrictions on their use or purpose and the prinicpal portion of endowment fund is classified as Permanently restricted net assets.
Question 7
1 / -0

Which of the following is not an restricted fund

A
Prize fund

B
Annuity fund

C
Assets fund

D
General fund

Solution

Explanation:

Restricted fund are those which can be utilized for the purpose only for which they are made like prize fund for giving prize etc. Hence Genral fund is not a restricted fund.
Question 8
1 / -0

Fund earmarked for investment in fixed assets is known as

A
Loan Fund

B
Assets fund

C
Annuity fund

D
Prize fund

Solution

Explanation:

Assets funds are used to account for the construction or acquisition of fixed assets such as buildings, equipment and roads.These are also called Capital project funds.
Question 9
1 / -0

Reporting expenses by categories such as salaries, rent, utilities, etc. is known as the ______ basis.

A
Both

B
Natural

C
Functional

D
None

Solution

Explanation:

Natural basis report the expense by categories such as rent , salary etc.
Question 10
1 / -0

Classifying expenses into program activities and supporting activities is known as the _______ basis

A
Both

B
Natural

C
None

D
Functional

Solution

Explanation:

Classifying the expense on the basis of Programme and supporting activity is called functional basis. Since, Programme Exp. are the expense incurred to carry out programme of NPO and supporting expense are incurred for raising funds and For management

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Re-Attempt Weekly Quiz Competition

FS of Non profit Organisation Test - 1

Result

FS of Non profit Organisation Test - 1

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SHARING IS CARING

Question 1

Sale of equity securities

None

Both

Debt

Solution

Question 2

Endowment

Annuity

Prize

Legacy

Solution

Question 3

Give fair idea of earned position

Adjustments relating to prepaid and outstanding expenses etc. are made

An assets account

Records all transactions without distinguishing among current , previous and succeeding accounting periods

Solution

Question 4

Both

Capital

Revenue

None

Solution

Question 5

Permanently restricted

Unrestricted

Temporarily restricted

None

Solution

Question 6

Unrestricted

None

Temporarily restricted

Permanently restricted

Solution

Question 7

Prize fund

Annuity fund

Assets fund

General fund

Solution

Question 8

Loan Fund

Assets fund

Annuity fund

Prize fund

Solution

Question 9

Both

Natural

Functional

None

Solution

Question 10

Both

Natural

None

Functional

Solution

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