Accounting for Not-for-Profit Organisations Test 4

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Accounting for Not-for-Profit Organisations Test 4

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Weekly Quiz Competition

Question 1
1 / -0

In Income and Expenditure account all Expenditure are recorded on ______________.

A
Debit side

B
Credit side

C
Income side

D
None of the above

Solution

In income and Expenditure account all expenditure are recorded on the debit side whereas all incomes are recorded on credit side of Income and Expenditure account.
Question 2
1 / -0

Income and Expenditure account is ________ by balance sheet whereas Receipt and Payment account is __________by balance sheet

A
not accompanied, not accompanied

B
accompanied, not accompanied

C
not accompained, accompanied

D
accompanied, accompanied

Solution

Receipt and Payment is summarized statement of cash transactions during an accounting year hence it is not accompanied by balance sheet. The account through which surplus or deficit of a non-profit-seeking concern is ascertained is called Income and Expenditure account.
Question 3
1 / -0

Which of the following accounts mostly begins with an opening balance?

A
Receipts and payments account

B
Income and expenditure

C
Both of the above

D
None of the above

Solution

Receipts and payments account mostly begin with an opening balance as it is nothing but cash account. A receipts and payment account is just like a cash account hence it begins with opening balance and ends with closing balance of cash.
Question 4
1 / -0

Which of the following is not a correct statement?

A
Balance sheet indicates the financial position of the business on a particular place

B
Balance Sheet is prepared after the preparation of trading and profit and loss account

C
Assets represent debit balances in the ledger

D
Liabilities are shown on the left-hand side of the balance sheet

Solution

At the end of every financial year, business has to prepare financial statements which includes Profit & Loss account and Balance Sheet.

Profit & Loss account is prepared to know the profit/loss position of the business for a particular period i.e. normally 12 months.

Balance Sheet is prepared to know the financial position of the business on a particular date i.e. normally 31st March
Question 5
1 / -0

Not-for-Profit organisations' affairs are usually managed by a ________.

A
manager committee

B
employees committee

C
executive committee

D
investors committee

Solution

Not for Profit organizations are formed for providing service to specific groups or the public at large such as education, health care, sports, and so on. These are organized as charitable trusts/ societies and subscribers to such organizations are called members.
Normally, they do not undertake any business activity and are managed by trustees/executive committees. They also have to maintain proper accounts and prepare financial statements.
Question 6
1 / -0

Decrease in working capital appear in fund flow statement in _________ side.

A
Sources

B
Application

C
Both (A) and (B)

D
None of the above

Solution

Working capital is current assets less current liabilities. A decrease in the net current assets leads to increase in fund flow which needs to be included. Hence, It appear in sources.
Question 7
1 / -0

The balance of Income and Expenditure account represents:

A
The balance of cash on that date.

B
The total cash receipts during the period.

C
The total cash payments during the period.

D
The excess of expenditure over income and vice-versa.

Solution

Income and expenditure is a nominal account, It is similar to profit and loss account. It either represents deficit or surplus at the end of the year. Therefore, it either shows surplus that is excess of income over expenditure or deficit which is excess of expenditure over income.
Question 8
1 / -0

The first step in preparation of Receipt and Payment Account is taking the opening balances of cash on hand and cash at bank and entering them on the _______ side; bank overdraft at the beginning of the year by entering the same on the ______ side of this account.

A
credit, debit

B
debit, credit

C
debit, debit

D
credit, credit

Solution

Receipt and Payment account is a summary of cash receipts and payments during the accounting period. The first step in preparation of Receipt and Payment account is taking the opening balances of cash in hand and cash at bank and entering them on the debit side. In case, there is bank overdraft the same is entered on credit side of this account.
Question 9
1 / -0

The organisations which are set up for providing service are called as _____.

A
Profit organisations

B
Not-for-profit organisations

C
Sole trader

D
Company

Solution

The organisations which are set up for providing services are called as not-for-profit organisations. They are set up for purpose other than profit for promoting science, religion, social cause etc. Hence, the organisation meant for a social cause are categorized as Not-for-profit organisation.
Question 10
1 / -0

The main objective of not-for-profit organisations is _________.

A
Gain profit

B
Provide services

C
Increase owners profit

D
None of the above

Solution

The main objective of non-for-profit organisations is providing services. The services provided by the not-for-profit organisations are meant to satisfy the needs of the people like joining as member and receive medicines at very low cost.

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Re-Attempt Weekly Quiz Competition

Accounting for Not-for-Profit Organisations Test 4

Result

Accounting for Not-for-Profit Organisations Test 4

Score

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Rank

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SHARING IS CARING

Question 1

Debit side

Credit side

Income side

None of the above

Solution

Question 2

not accompanied, not accompanied

accompanied, not accompanied

not accompained, accompanied

accompanied, accompanied

Solution

Question 3

Receipts and payments account

Income and expenditure

Both of the above

None of the above

Solution

Question 4

Balance sheet indicates the financial position of the business on a particular place

Balance Sheet is prepared after the preparation of trading and profit and loss account

Assets represent debit balances in the ledger

Liabilities are shown on the left-hand side of the balance sheet

Solution

Question 5

manager committee

employees committee

executive committee

investors committee

Solution

Question 6

Sources

Application

Both (A) and (B)

None of the above

Solution

Question 7

The balance of cash on that date.

The total cash receipts during the period.

The total cash payments during the period.

The excess of expenditure over income and vice-versa.

Solution

Question 8

credit, debit

debit, credit

debit, debit

credit, credit

Solution

Question 9

Profit organisations

Not-for-profit organisations

Sole trader

Company

Solution

Question 10

Gain profit

Provide services

Increase owners profit

None of the above

Solution

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