MCQs For NCERT Class 12 Accountancy Chapter 1 Accounting For Not For Profit Organisation

MCQs Class 12

Please refer to the MCQ Questions for Class 12 Accountancy Chapter 1 Accounting For Not For Profit Organisation with Answers. The following Accounting For Not For Profit Organisation Class 12 Accountancy MCQ Questions has been designed based on the latest syllabus and examination pattern for Class 12. Our experts have designed MCQ Questions for Class 12 Accountancy with Answers for all chapters in your NCERT Class 12 Accountancy book.

Accounting For Not For Profit Organisation Class 12 MCQ Questions with Answers

See below Accounting For Not For Profit Organisation Class 12 Accountancy MCQ Questions, solve the questions and compare your answers with the solutions provided below.

Question. Subscription received in advance during the accounting year is               
(a) an income
(b) an expense
(c) Asset
(d) Liability

Answer

D

Question. The opening balance of the Prize fund of a sports club was Rs.6,400. Further donations towards this fund received during the accounting year amounted to Rs.4,300. During the year, Rs. 3,500 was spent on prizes and Rs. 400 was received as interest on investment of the Prize Fund. The closing balance of the Prize fund is             
(a) Rs. 1,900 
(b) Rs.10,200
(c) Rs.10,600
(d) Rs.7,600

Answer

D

Question. Which of the following is to be recorded in an income and Expenditure Account         
(a) Purchase of a fixed Asset
(b) Capital Expenditure incurred on a fixed asset
(c) Profit on the sale of a fixed asset
(d) Sale of a fixed asset

Answer

C

Question. XYZ club has a bar that maintains a separate trading account for its trading activities. Which of the following is the treatment of profit or loss on bar trading activities?           
(a) Profit or loss is directly shown in the Balance Sheet
(b) Profit or loss is to be presented in income and expenditure account
(c) Profit and loss is credited in income statement.
(d) Profit or loss is added to accumulated fund.

Answer

B

Question. Amount received from the sale of old furniture by a club is treated as:               
(a) Revenue Receipt
(b) Capital  Receipt
(c) Asset
(d) liability

Answer

B

Question:  Surplus of Not-for –Profit organisations
(a) Distributed among the members
(b) Is not distributed among the members
(c) May be or May not be distributed among the members
(d) Is debited to General fun(d) 

   

Answer

B

Question: Delhi cricket club gives the following information. Opening Stadium Fund is <10, 00,000. Donation for Stadium fund received during the year Rs.500000. Income from Stadium Fund Investment Rs.100000. Amount spent during the year on construction of stadium is Rs.600000. Identify which of the following statement is correct in respect to preparation of Balance sheet.
(a) Rs.600000 shown on the asset side of the Balance sheet.
(b) Rs.600000 shown on the asset side of the Balance sheet Also Rs.600000 is transferred to the credit of Income and Expenditure account,
(c) Rs.600000 shown on the asset side of the Balance sheet Also Rs.600000 is transferred from Stadium fund to General fund in the Balance sheet.
(d) Rs.600000 is shown as an expense in the Income and Expenditure account and Rs.600000 is transferred to the credit pf Income and Expenditure account from Stadium fund

Answer

C

Question:  Subscription received during the year Rs.50, 000. ;Subscriptions Outstanding at the end of the year` 8,000; Subscription outstanding at the beginning of the year ` 6,000. Net Income from subscription will be
(a) 48,000
(b) 64,000
(c) 52,000
(d) 36,000

Answer

C

Question: If Life Membership fees of <5000 wrongly treated as revenue receipt then effect of this error on surplus and closing balance of capital fund will be
(a) Capital fund increased and surplus increased by<5000
(b) Capita fund decreased and surplus increased by<5000
(c) No effect on capital fund but surplus increased by<5000
(d) Capital fund decreased by <5000 but no effect on surplus.

Answer

C

Question: Income and Expenditure Account is based on
(a) Cash Basis of Accounting.
(b) Accrual Basis of Accounting.
(c) Mixed Basis of Accounting.
(d) Management Accounting. 

Answer

B

Question: Which of the following is prepared to find out the income of a trading concern?
(a) Receipts and Payments a/c
(b) Income and Expenditure a/c
(c) Profit and Loss a/c
(d) Balance Sheet. 

Answer

C

Question: If Income is Rs.16,000 and deficit debited to Capital Fund is Rs.4,300 then Expenditure is:
(a) 16,000
(b) 4,300
(c) 20,300
(d) None of these

Answer

C

Question: <100000 received as annual subscription. Out of this <20000 is of pervious year whereas <10000 is receivable at the end of the current year. Amount of subscription that will be show in income and expenditure account will be
(a) <1, 00,000
(b) <90, 000
(c) <1, 20,000
(d) <80, 000

Answer

B

Question: When the Tournament Expenses incurred are more than the Tournament Fund, then the excess amount is excess amount is
(a) Debited to Income and Expenditure account|
(b) Credited to Tournament Fund
(c) Shown on the Asset side of Balance sheet
(d) Credited to Income and Expenditure Account

Answer

A

Question: If 10% Interest on Investment appearing in the Receipts side is Rs.7000, then the value of investment will be:
(a) Rs.1,00,000
(b) 70,000
(c) 56,000
(d) 49,000 

Answer

B

Question:Entrance fees received amounted to Rs.50,000. In this 25% is to be capitalize(d) Mention the amount to be shown in income side of Income and Expenditure account:
(a) 12,500
(b) 13,200
(c) 50,000
(d) 37,500

Answer

D

Question: The Main purpose of Not-for- Profit organisation is :
(a) To earn profit
(b) to serve the society
(c) To improve the economy
(d) None of the above.

Answer

B

Question: Furniture (Book value) Rs.5,000 were sold for Rs. 4,500. New Furniture worth Rs.10,000 were purchased during the year. The amount which is to be debited to Income and Expenditure account is :
(a) Profit on sale Rs.500
(b) Loss on sale Rs.500
(c) Sale of furniture Rs.4500
(d) Purchase of Rs.10000

Answer

B

Question: Stock of medicines on 1.4.18 were Rs.5000. Medicines purchased during the year is Rs.5000. Medicines sold during the year is Rs.2500. Closing stock of medicines are Rs.3000. Stock of medicines used during the year 2019 is:
(a) Rs.7000
(b) Rs.2500
(c) Rs.5000
(d) Rs.10000

Answer

A

Question:Subscription outstanding for the year 2018-19 is Rs.2500. Subscription outstanding for the year 2017-18 was Rs.5000 out of which Rs.3000 were received during the year 2018-19. The outstanding subscription to be shown in the Income and expenditure for current year 2018-19 is :
(a)Rs. 500
(b) Rs.1000
(c) Rs.2500
(d) Rs.3000

Answer

A

Question: Receipts and payments account makes no difference between:
(a) Capital Receipts and Capital payments
(b) Revenue receipts and revenue payments
(c) Current year and previous year
(d) All the above.

Answer

D

Question: Which of the following is not a revenue receipt?
(a) Donations for Tournament
(b) Government Grants
(c) Subscriptions
(d) Entrance Fees

Answer

A

Question: The account which shows classified summary of transactions of a Cash Book’ in a Not-for-Profit Organisation is called:
(a) Income and Expenditure A/c
(b) Receipts and Payments A/c
(c) Profit and Loss A/c
(d) Subscriptions A/c

Answer

B

Question: Which of the following is a capital receipt?
(a) Subscriptions
(b) Sale of used sports material
(c) Endowment fund
(d) Entrance fees

Answer

C

Question: Which of the following statements is not true for Receipts and Payments Account?
(a) It is a summary of the Cash Book.
(b) It records receipts and payments of revenue nature only.
(c) The receipts and payments may relate to current, preceding, or succeeding accounting periods.
(d) Depreciation is not shown in it.

Answer

B

Question: Which of the following is not a capital receipt?
(a) Endowment Fund
(b) Government Grants
(c) Life Membership Fees
(d) Donations for Building

Answer

B

Question: Which of the following statements is true for Receipts and Payments Account?
(a) It is prepared on accrual basis.
(b) It records receipts and payments of revenue nature only.
(c) Depreciation is debited to this account.
(d) Receipts and payments may relate to current, preceding or succeeding periods.

Answer

D

Question: Which of the following is not a revenue receipt?
(a) Subscriptions
(b) Endowment Fund
(c) Sale of Used sports Materialz
(d) Entrance Fees

Answer

B

Question: Income and Expenditure Account records:
(a) Receipts and Payment of Revenue and Capital nature both.
(b) Income and Expenditure of Revenue nature only.
(c) Expenditure of Capital nature only.
(d) Receipts of Revenue nature only.

Answer

B

Question: Unique Club had a prize Fund of ₹9,10,000 on 1st April, 2019. It incurred expenses on prizes amounting to ₹9,10,000 during the year. The balance of Prize fund in the balance sheet as on 31st March, 2020 will be:
(a) ₹10,000
(b) ₹10,000
(c) ₹9,00,000
(d) Zero

Answer

D

Question: Which of the following is not a capital receipt?
(a) Donations for tournament
(b) Donations for building fund
(c) Life membership fee
(d) Entrance fees

Answer

D

Question: Jaipur Club has a prize fund of ₹6,00,000. It incurs expenses on prizes amounting to ₹5,20,000. The expenses should be:
(a) debited to income and expenditure account.
(b) presented on the asset side of the balance sheet.
(c) debited to income and expenditure account and presented on the asset side of the balance sheet.
(d) deducted from the liability side of the balance sheet.

Answer

D

Question:  On 1st April 2019, Maitreyi Club had a Prize Fund of `8,00,000. It incurred expenses on prizes amounting to `8,70,000 during the year. The balance of Prize Fund in the Balance Sheet as at 31st March, 2020 will be:
(a) ₹70,000
(b) ₹8,00,000
(c) ₹70,000
(d) Zero

Answer

D

Question:. Which of the following is a revenue receipt for a not-for-profit organisation?
(a) Endowment fund
(b) Government Grants
(c) Life Membership fees
(d) Legacies (specific)

Answer

B

Question:  Which of the following statements is not true for Income and Expenditure Account?
(a) It records items of revenue nature only.
(b) Items recorded in it relate only to the current perio(d)
(c) Depreciation is not recorded in this account.
(d) It does not have an opening balance.

Answer

C

Question:  On 1stApril, 2019, Queens Club had a prize Fund had a prize Fund of ₹4,00,000. During the year it incurred expenses on prizes amounting to ₹4,30,000. The balance of prize Fund in the Balance Sheet as on 31stMarch, 2020 will be
(a) ₹30,000
(b) ₹4,00,000
(c) ₹30,000
(d) Zero

Answer

D

Question:  From the given extracts obtained from the Receipts and Payments Account of Cheema Club for the year ended 31st March, 2020 and additional information, Calculate the amount of subscription in arrears as on 31st March, 2020. Subscriptions Received (₹)
2018-19 10,000
2019-20 1,20,000
2020-21 7,000
Additional Information:
The Club had 130 members paying an annual subscription of ₹1,000 each. Subscription in arrears at the beginning of the year were ₹16,000. 10 members paid subscription for 2019-20 in 2018-19.   

Answer

₹6,000

Question:  Receipts and Payments Account of a club on 31.3.2020 shows a receipt of ₹5,250. There were 416 life members on 31.3.2019 the subscription payable by each member, to be a life time member is ₹125. How many total life members are there on 31.3.2020? How much amount of total life membership fees has been added to the capital fund on 31.3.2020?     

Answer

458; `57,250

Question: Sports Star Charitable club has income of ₹16,000 and ‘deficit’ debited to capital fund of ₹4,300 for the year 2019- 20, then expenditure for the year 2019-20 is: (CBSE Sample Question Paper 2020-21)
(a) ₹11,700
(b) ₹4,300
(c) ₹20,300
(d) None of these

Answer

C

Question:  Which of the following is never shown on the ‘Payments’ side of Receipts and Payments Account, but is shown as an Expense while which preparing ‘Income and Expenditure Account’?
(a) Depreciation on fixed assets
(b) Outstanding Expenses
(c) Loss on sale of fixed assets
(d) All of these

Answer

D

Question: How are specific donations treated while preparing final accounts of a ‘Not-for-Profit Organisation’?
(a) Shown on the debit side of Receipt and Payment Account
(b) Capitalized, i.e. shown on the liabilities side of the Balance Sheet
(c) Both (a) and (b)
(d) Treated as revenue receipts and taken to the credit of Income and Expenditure Account

Answer

C

Question: Which of the following is included in the major sources of income of not-for-profit organisations?
(a) Donations (general)
(b) Legacies (general)
(c) Income from investments
(d) All of these

Answer

D

Question:  Which of the following is directly added to the capital fund on the liabilities side of the Balance Sheet?
(a) Life membership fees
(b) Legacies
(c) Entrance Fees
(d) All of these

Answer

A

Question:  Which of the following is never shown on the ‘Payment side’ of Receipts and Payments Account but is shown as an expense while preparing Income and Expenditure Account?
(a) Depreciation on fixed assets
(b) Outstanding expenses
(c) Loss on sale of fixed assets
(d) All of these

Answer

D

Question:  How will you treat the following items given in Receipts and Payment Account while preparing Income and Expenditure Account and Balance Sheet of a not-for-profit organisation?
Refreshment revenue (Sale of Food Stuff ) ₹10,000 Refreshment expenses (Purchase of Food Stuff ) ₹4,000

Answer

Income and Expenditure Account (an extract)
Expenditure (₹)         Income                            (₹)
                            Refreshment
                             revenue10,000
                        Less: Refreshment
                          expenses (4,000)                       6,000

Question Out of the following items, which is not shown in the ‘Receipts and Payments A/c’ of a not for profit organisation?
(a) Subscription received in advance
(b) Subscription due
(c) Last year subscription received
(d) All of the above 

Answer

B

Question Specific Donation received by NPO is shown in the
(a) Credit side of Income and Expenditure Account,
(b) Debit side of Income and Expenditure Account
(c) Liabilities side of Balance Sheet.
(d) As is decided by the management. 

Answer

C

Question Features of a partnership firm are :
(a) Two or more persons are carrying common business under an agreement.
(b) They are sharing profits and losses in the fixed ratio.
(c) Business is carried by all or any of them acting for all as an agent.
(d) All of the above. 

Answer

A

Question Following are essential elements of a partnership firm except:
(a) At least two persons
(b) There is an agreement between all partners
(c) Equal share of profits and losses
(d) Partnership agreement is for some business. 

Answer

A

Question Life Membership Fee received by NPO is accounted as
(a) Revenue Receipt.
(b) Capital Receipt.
(c) an Asset.
(d) Miscellaneous Receipt. 

Answer

B

Question Salaries paid during the year ended 31st March, 2020 is Rs. 36,000. Salaries paid in advance at the end of previous year were Rs. 54,000. The amount of Salaries to be debited to income and Expenditure Account for the year ended 31st March, 2020 will be
(a) Rs. 54,000.
(b) Rs. 36,000.
(c) Rs. 90,000.
(d) Rs. 18,000

Answer

C

Question If a General Donation of huge amount is received by a school, that donation is treated as :
(a) Revenue Receipt (Income)
(b) Capital Receipt (Liability).
(c) Assets
(d) Earned Income 

Answer

B

Question There are 200 members, each paying an annual subscription of Rs. 1,000; subscription received during the year Rs. 1,95,000; subscriptions received in advance at the beginning of the year Rs. 3,000 and at the end of the year Rs.2,000. Amount shown in Income & Expenditure Account will be :
(a) Rs. 2,00,000
(b) Rs. 1,96,000
(c) Rs. 1,94,000
(d) Rs. 2,01,000

Answer

A

 

Question The opening balance of Prize Fund was Rs.32,800. During the year, donations received towards this fund amounted to Rs. 15,400; amount spent on prizes was Rs. 12,300 and interest received on prize fund investment was Rs.4,000. The closing balance of Prize Fund will be :
(a) Rs. 56,500
(b) Rs.64,500
(c) Rs.39,900
(d) Rs. 31,900 

Answer

C

Question The amount received for sale of old sports materials by a Non-profit organisation is shown in which of the following?
(a) Debit side of Income and Expenditure Account
(b) Liability side of Balance Sheet
(c) Credit side of Income and Expenditure Account
(d) Assets side of Balance Sheet

Answer

C

Question If there is a ‘Match Fund’, then match expenses and incomes are transferred to:
(a) Income and Expenditure A/c
(b) Assets side of Balance Sheet
(c) Liabilities side of Balance Sheet
(d) Both Income and Expenditure A/c and to Balance Sheet

Answer

C

Question Not-for-profit organisations prepare:
(a) Trading Account
(b) Trading & Profit and Loss Account
(c) Income and Expenditure Account
(d) All of the above 

Answer

C

Question General Donation received by NPO is shown in the
(a) Credit side of income and Expenditure Account
(b) Debit side of income and Expenditure Account
(c) Liabilities side of Balance Sheet
(d) Assets side of the Balance Sheet. 

Answer

A

Question Subscriptions received in advance by a club are shown
(a) in the credit side of the Income and Expenditure Account.
(b) in the assets side of the Balance Sheet.
(c) in the liabilities side of the Balance Sheet.
(d) in the payments side of Receipts and Payments Account. 

Answer

C

Question. Receipt & Payment Account shows               
(a) A debit balance
(b) A credit balance
(c) Surplus or deficit
(d) Capital fund

Answer

A

Question. Subscription received but not yet earned is considered as             
(a) Asset
(b) Liability
(c) Income
(d) Expenditure

Answer

B

Question. On What basis receipts and payments account is made           
(a) Cash basis
(b) Accrual basis
(c) Both Cash & Accrual basis
(d) None of the above

Answer

A

Question. The control of non trading concern rest in the hand of             
(a) Directors
(b) managing Agents
(c) Governing body
(d) Promoters

Answer

C

Question. If debit side of receipt and payment account exceeds the credit side, it represents:         
(a) Deficit balance
(b) Surplus Balance
(c)Cash at Bank
(d) Bank Overdraft

Answer

C

Question. Deficit balance can be shown in balance Sheet as:             
(a) Liability
(b) Assets
(c) Owner’s equity
(d) None of the above

Answer

B

Question. Which of the following is the accounting equation for a non-profit organisation?         
(a) Asset= Capital + Liabilities
(b) Capital+ Liabilities= Assets
(c) Accumulated Fund+ Liabilities= Assets
(d) Liabilities= Assets + Accumulated Fund

Answer

C

Question. Receipt and Payment account includes           
(a) Revenue items
(b) Cash items
(c) Revenue & Cash items
(d) None of the above

Answer

C

Question. Which should be considered as capital receipt of a club           
(a) Donation
(b) sale of newspaper
(c)) sale of bar items
(d) sale of furniture

Answer

D

Question. At the beginning of an accounting year a club has assets of Rs. 19,000 and liabilities of Rs.5,000. Rs. 1,800 is the debit balance of the income & expenditures account. The opening capital fund is             
(a) Rs. 18,000
(b) Rs.11,200
(c) Rs.15,800
(d) Rs. 24,800

Answer

C

Question. The Receipt and Payment account of a Non- Profit Organisation is a             
(a) Nominal Account
(b) Real Account
(c) Income Statement Account
(d) Financial Statements

Answer

B

Question.  Which of the following is regarded as apt to show purchase of fixed asset for a non profit organisation   
(a) Income & Expenditure Account
(b) Profit & Loss Account
(c) Balance Sheet
(d) None of the above

Answer

C

Question. Second hand furniture worth Rs. 6,000 was purchased.  It was repaired for Rs.600 and installed by workmen to whom Rs. 200 was paid as wages. The furniture should be capitalised for                   
(a) Rs.6,200
(b) Rs.6,800
(c) Rs. 6,600
(d) Rs. 6,000

Answer

B

Question. Fixed assets fund is                 
(a)  Endowment Fund
(b) Current restricted Fund
(c) Current unrestricted fund
(d) Meant for accounting of asses and depreciation

Answer

D

Question. Donations received for special purpose should be                   
(a) Credited to a separate fund account and shown in the Balance Sheet 
(b) Treated as revenue
(c) treated as revenue unless the amount is large
(d) Not recorded at all

Answer

A

Question. In regard to Rent expenses paid in advance of a non- profit organisation  which of the following classification is correct       
(a)Expense
(b) Liability
(c) Equity
(d) Assets

Answer

D

Question. Income & Expenditure Account is based on           
(a) Cash Accounting
(b) Accrual Accounting
(c) Government Accounting
(d) Management Accounting

Answer

B

Question. Salaries payable for the current year amount to Rs. 8,500 at the end of the year. Outstanding salaries amounted to Rs. 300. Salaries paid in advance last year pertaining to the current year amounted to Rs.500. Prepaid salaries for the next year amount to Rs.250. total amount paid for salaries during the year is           
(a) Rs.7,550
(b) Rs.7,500
(c)  Rs. 7,950
(d) Rs.6,500

Answer

C

 Fill in the blanks:

Question. restricted fund can be used for ————————-purpose             

Answer

Specific  

Question. General Fund can be transferred to ————————— Fund         

Answer

Any other

  Question. Fund based accounting is used by —————————————organisations.       

Answer

Not for profit

Question. When Expenditure is paid out of current/ restricted fund, cash/bank account is credited and —————————-is debited.        

Answer

Restricted fund

Question.Endowment Fund is —————————Fund.     

Answer

General fund

Question.—————————– represents the excess of assets over liabilities.         

Answer

Capital fund   

True or False

Question. Charitable institutions prepare income and expenditure account at the end of every financial year.   

Answer

True

Question. Income & expenditure account do not have opening balance.    

Answer

True 

Question. Not for profit concerns concentrate their efforts on maximising the profits.      

Answer

False 

Question. All receipts are the items of revenue nature.          

Answer

False 

Question. There is no difference between the nature of Receipt & Payment Account and Income & Expenditure account. 

Answer

False 

Question. In the income and Expenditure Account, all incomes received during the year irrespective of the year for which they are received, are to be recorded.   

Answer

False

Accounting For Not For Profit Organisation Class 12 Accountancy MCQ Questions