Accounting for Not-for-Profit Organisations Test 11

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Accounting for Not-for-Profit Organisations Test 11

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Weekly Quiz Competition

Question 1
1 / -0

_________ is a fixed annual payment and usually continue only during the lifetime of the named beneficiary.

A
Loan

B
Endowment

C
Annuity

D
Legacy

Solution

Annuity is a fixed annual payment and usually continues only during the lifetime of the named beneficiary.
Annuity is a fixed sum of money paid to someone each year, typically for the rest of their life of that named beneficiary.Annuities may be created under a trust or they may be purchased from a life insurance company.
Question 2
1 / -0

Life Membership is a capital receipt and will be added to capital fund in _______

A
Profit and loss account

B
Balance sheet

C
Income expenditure account

D
None of these

Solution

Capital Fund is a liability in the balance sheet hence life membership fee is to be added in capital fund on the liabilty side of a balance sheet.
Question 3
1 / -0

Income and expenditure accounts show

A
Sufficient or deficit for the current accounting period

B
Closing capital of an organization

C
Cash available to an organization

D
Cash available in the bank account

Solution

income and expenditure account shows the income received and expenditure incurred during a year through which result is surplus or deficit.If there is exess of Revenue over expenditure there will be surplus and if there is excess of expenditure over revenue there will be Deficit.
Question 4
1 / -0

When cash is received for life membership, which one of the following double entries is passed?

A
Investment debit and cash credit

B
Cash debit and capital credit

C
Life membership debit and cash credit

D
Cash Debit and life membership fund credit

Solution

Cash is coming so it will be debit and life Membership fee will be credit.Hence, cash account debit and life membership fee credit.
Question 5
1 / -0

All assets and liabilities of Non-profit organisation are reported on its statement of

A
Income position

B
Fund flow statement

C
Financial position

D
Cash Flow statement

Solution

Balance sheet is a statement which shows all assets and liabilities from which the financial position of business can be ascertain.
Question 6
1 / -0

An advance receipt of subscription from a member of the non-profit organization is considered as a/an

A
Liability

B
Asset

C
Equity

D
Expense

Solution

Income which received in advance is liability on the part of entity which receive.Hence, Subscrption received in advance is treated as liability.
Question 7
1 / -0

Which of the following statement is false regarding receipt and payment account

A
An assets account

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

C
Give fair idea of earned position

D
Based on accrual basis

Solution

Receipt and payment account is summary of cash book which shows only cash receipts and cash expenditure hence it is based on cash basis of accounting.
Question 8
1 / -0

Which of the following financial categories are used in a nongovernmental not-for-profit organization's statement of financial position?

A
Changes in unrestricted, temporarily restricted, and permanently restricted net assets

B
Assets, liabilities, and net assets

C
Income, expenses, and unrestricted net assets

D
Net assets, income, and expenses

Solution

The statement of financial position for nongovernmental not-for-profit organizations includes assets, liabilities, and net assets. "Net assets" is used rather than "retained earnings" by not-for-profits.
Question 9
1 / -0

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

A
Prize

B
Annuity

C
Endowment

D
Legacy

Solution

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 10
1 / -0

Rent expense of a non-profit organization paid in advance. Which of the following is the correct classification of rent?

A
Asset

B
Equity

C
Liability

D
Expense

Solution

Any expense paid in advance will give benifit in future and any benifit which firm will get in future is called asset. Hence, Rent paid in advance is asset.
Question 11
1 / -0

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

A
Natural

B
Functional

C
Both

D
None

Solution

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.
Question 12
1 / -0

Amount received from the sale of grass of a club should be treated as

A
Income

B
Asset

C
Liability

D
None

Solution

Sale of grass will be revenue for NPO which is to be shown on income and expenditure side of NPO hence it is an income.
Question 13
1 / -0

All revenues and expenses of a Non-profit organisation are reported on its statement of

A
Activities

B
Report

C
Both

D
None

Solution

All revenue and expense of NPO are recorded in statement of activity which is income and expenditure account.
Question 14
1 / -0

The balance sheet of a non-profit organization such as a charitable hospital doesn’t contain the

A
Assets

B
Debts

C
Building

D
Owner’s equity

Solution

NPO doesn't have any owners equity , they can take debt.
Question 15
1 / -0

The receipts and payments account of a non-profit organization is a

A
Real account

B
Financial statement

C
Nominal account

D
Income statement account

Solution

The receipt and payment account is Summary of cash book on that basis it is a real account.

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Re-Attempt Weekly Quiz Competition

Accounting for Not-for-Profit Organisations Test 11

Result

Accounting for Not-for-Profit Organisations Test 11

Score

-

Rank

-

SHARING IS CARING

Question 1

Loan

Endowment

Annuity

Legacy

Solution

Question 2

Profit and loss account

Balance sheet

Income expenditure account

None of these

Solution

Question 3

Sufficient or deficit for the current accounting period

Closing capital of an organization

Cash available to an organization

Cash available in the bank account

Solution

Question 4

Investment debit and cash credit

Cash debit and capital credit

Life membership debit and cash credit

Cash Debit and life membership fund credit

Solution

Question 5

Income position

Fund flow statement

Financial position

Cash Flow statement

Solution

Question 6

Liability

Asset

Equity

Expense

Solution

Question 7

An assets account

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

Give fair idea of earned position

Based on accrual basis

Solution

Question 8

Changes in unrestricted, temporarily restricted, and permanently restricted net assets

Assets, liabilities, and net assets

Income, expenses, and unrestricted net assets

Net assets, income, and expenses

Solution

Question 9

Prize

Annuity

Endowment

Legacy

Solution

Question 10

Asset

Equity

Liability

Expense

Solution

Question 11

Natural

Functional

Both

None

Solution

Question 12

Income

Asset

Liability

None

Solution