Accounting for Not-for-Profit Organisations Test 3

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Accounting for Not-for-Profit Organisations Test 3

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Weekly Quiz Competition

Question 1
1 / -0

Shankar introduces Rs. 5000 as additional capital in the business. This amount will be considered as ___________.

A
Capital Receipt

B
Revenue Receipt

C
Capital and Revenue Receipt

D
Deferred Revenue Expenditure

Solution

Separate entity concepts defines that business and business man are two separate legal entity in the eyes of law.
Revenue receipts are those which are coming in the business against the normal business activity but the capital receipts are those which are contributed towards long term business activity.
Any amount contributed by the owner is considered as capital and shown in balance sheet as liability. Additional contribution towards capital is also a capital receipts and should be shown in liability as addition to capital.
Question 2
1 / -0

Which of the following is an example of capital expenditure?

A
Purchased a pencil sharpener at a cost of Rs.2

B
Installing an escalator at cost of Rs.5,600 in a three storey building which had previously been used without escalator

C
Painted delivery truck at a cost of Rs.450 after two years of use

D
None of the above

Solution

Capital expenditure is a money spent by a business or organization on acquiring or maintaining fixed assets, such as land, buildings, and equipment.
Installing an escalator is a capital expenditure as it is a non-recurring expenditure.
Question 3
1 / -0

Which one of the following concepts is used as fund in the preparation of Funds Flow Statements?

A
Current Assets

B
Working Capital

C
Cash

D
All Financial Resources

Solution

According to working capital concept, the term 'funds' refers to net working capital (current assets-current liabilities). In the funds statement, inflow and outflow of net working capital is displayed.
Question 4
1 / -0

Which of the following is not a current liability in the balance sheet ?

A
Loan from bank

B
Acceptance

C
Unclaimed dividend

D
Interest accrued but not due on loan

Solution

Loan from a bank is a long term liability which need not to be paid within a year. Current liabilities are those which are expected to be paid in next 12 months.
Hence Bank Loan is not a current liability.
Question 5
1 / -0

Income and Expenditure account is ______ to account like Profit and Loss account.

A
real

B
personal

C
nominal

D
expense

Solution

Income and Expenditure account is prepared by non-trading concern to reveal the surplus or deficit arising out of the operating activities during the accounting period. It is one of the final accounts of non-trading concern like the profit and loss account of the trading concern,
Question 6
1 / -0

Income and Expenditure accounts shows a balance of ________________.

A
Surplus or Deficit

B
Cash in hand at the end

C
Net Profit/Loss

D
Capital Fund

Solution

Income and expenditure account is prepared by a non-trading concern to reveal the surplus or deficit arising out of the operating activities during the accounting period.
Question 7
1 / -0

Final accounts of NPOs consist of three parts _______________.

A
Trading; Profit and loss account; Balance sheet

B
Receipt and expenditure account; Income and expenditure account; Balance sheet

C
Trading; Profit and loss account; Profit and loss appropriation account

D
Receipt and payment account; Profit and loss account; Balance sheet

Solution

Receipt and payment account: A summary of cash receipt and cash payments, all transactions whether it belongs to past or future are recorded if such transactions occurred during the accounting period.
Income and expenditure account: Income and expenditure account records income and expenses occurred during the year.
Balance sheet: Balance sheet record all assets and liability of the company.
Question 8
1 / -0

At the beginning of accounting year the following particulars are extracted value of Assets Rs. 25,000, Liabilities Rs. 5,000, Debit balance of income and expenditure account Rs. 2,500. Then capital fund will be ____________.

A
Rs. 32,500

B
Rs. 22,500

C
Rs. 27,500

D
Rs. 20,000

Solution

Capital Fund = Extracted value of Assets + Debit bal. of Income and expenditure - Liabilities
Capital Fund = Rs. 25,000 + Rs. 2,500 - Rs. 5,000
Capital Fund = Rs. 22,500
Question 9
1 / -0

Which of the following current asset?

A
Stock

B
Creditors

C
Proposed Dividend

D
Tax

Solution

Current Assets are those which are generated during the course of business. This may change with each of the business transactions. Examples of current assets are stock, bills receivables, sundry debtors, cash on hand, cash at bank etc.
For example, if goods purchased by the organization, in such case stock will increase against which cash may go down.
Question 10
1 / -0

Which of the following is not an intangible asset?

A
Goodwill

B
Preliminary expenses

C
Patents rights

D
Copy rights

Solution

Intangible assets are as follows -
- Goodwill
- Patent Rights
- Copyrights
- Trademark
- License
- Quata

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Accounting for Not-for-Profit Organisations Test 3

Result

Accounting for Not-for-Profit Organisations Test 3

Score

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Rank

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SHARING IS CARING

Question 1

Capital Receipt

Revenue Receipt

Capital and Revenue Receipt

Deferred Revenue Expenditure

Solution

Question 2

Purchased a pencil sharpener at a cost of Rs.2

Installing an escalator at cost of Rs.5,600 in a three storey building which had previously been used without escalator

Painted delivery truck at a cost of Rs.450 after two years of use

None of the above

Solution

Question 3

Current Assets

Working Capital

Cash

All Financial Resources

Solution

Question 4

Loan from bank

Acceptance

Unclaimed dividend

Interest accrued but not due on loan

Solution

Question 5

real

personal

nominal

expense

Solution

Question 6

Surplus or Deficit

Cash in hand at the end

Net Profit/Loss

Capital Fund

Solution

Question 7

Trading; Profit and loss account; Balance sheet

Receipt and expenditure account; Income and expenditure account; Balance sheet

Trading; Profit and loss account; Profit and loss appropriation account

Receipt and payment account; Profit and loss account; Balance sheet

Solution

Question 8

Rs. 32,500

Rs. 22,500

Rs. 27,500

Rs. 20,000

Solution

Question 9

Stock

Creditors

Proposed Dividend

Tax

Solution

Question 10

Goodwill

Preliminary expenses

Patents rights

Copy rights

Solution

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