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Accounting for Not-for-Profit Organisations Test 7

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Accounting for Not-for-Profit Organisations Test 7
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Weekly Quiz Competition
  • Question 1
    1 / -0
    Receipt and payment a/c starts with.....
  • Question 2
    1 / -0
    Which of the following would appear as an operating expense in the Profit & Loss Account of a trading firm?
    Solution
    The Profit and Loss A/c record all those amounts which are related with sale of goods. Freight Outward is the expenses paid on transportation of goods which are meant for sale purpose. Thus, has to be recorded in the profit & loss account.
  • Question 3
    1 / -0
    M/s. ABC Associates sent goods worth Rs. 1,00,0001,00,000 on 1111th March on reject or approval basis. Out of these goods worth Rs. 40,00040,000 were accepted by the customers till 3131st March and the remaining were still pending with the customers as on 3131st March. How would you deal with the goods lying with the customer as on 3131st March assuming that the goods were involved @ 25%25\% profit on sales.
  • Question 4
    1 / -0
    The Capital of ABC associated was Rs.25,00025,000 as on 1.1.20131.1.2013 which rose to Rs.55,00055,000 by the end of 31.12.201431.12.2014. The increase in capital of ABC associates may be due to......
  • Question 5
    1 / -0
    Not-for-Profit organisations prepare balance sheets for ascertaining the ________ position of the organisation.
    Solution
    The Balance Sheet of non profit organisation is prepared in same way as in the case of business enterprise. Assets of organisations are recorded on right hand side and all liabilities are recorded on left hand side. In place of capital Capital Fund is there. Main purpose of preparing balance sheet is to ascertain the financial position of the organisation. 
  • Question 6
    1 / -0
    Entrance fees may also be called as _____________.
    Solution
    Option C is correct. Entrance fees is paid at the time of admission by every member for membership. It is paid only once on becoming a member. As it is paid at the time of admission , it is also called Admission fees.
  • Question 7
    1 / -0
    In determining the income of _________ people use receipts and expenditure account.
    Solution
    As professionals like Doctors, Lawyers and Company Secretaries are providing the services, hence they are following the cash system of accounting. All such professionals are preparing the receipts and expenditure account. 
  • Question 8
    1 / -0
    Sale of old asset by non-profit organization:
    Solution
    In case of sale of fixed assets by a non profit organisation the gain or loss if any will be recorded in the income and expenditure account, the cash proceeds will be recorded in receipts and payments account and the cost of the amount is deducted from the respective asset in the balance sheet. 
  • Question 9
    1 / -0
    Which of the following is correct treatment of life membership fees received by non-profit organization ?
    Solution
    Some organisations provide its members an option to pay a lump sum amount to become members for the whole life. As this is received only once it is taken as capital receipt and credited to a separate fund known as Life membership account. Each year a fixed proportion of this amount is credited to Income and Expenditure Account. If a member who has paid life membership fee dies before transfer of whole amount to Income and Expenditure account, the balance is transferred to capital fund account on the date of death. 
  • Question 10
    1 / -0
    Life membership fee is a ________________.
    Solution
    Life Membership Fees is a capital receipt and we add it to the Capital Fund on the liabilities side of the Balance Sheet. We do not account it as an income because a life member makes onetime payment and avails services all through his life.
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