Important Questions for Chapter 1- Company Accounts Financial Statements of Not-for-Profit Organisations

Important Questions with Answers for CBSE Class 12 Accountancy Chapter 1- Company Accounts Financial Statements of Not-for-Profit Organisations which is outlined by expert Accountancy teachers from the latest version of CBSE (NCERT) books.

CBSE Class 12 Accountancy Chapter – 1 Important Questions

QUESTION 1

Define Non-for-Profit Organisation.

Answer: The Non-for-Profit Organisation is an organisation which does not intend to make any profit and are exempted from paying tax. These organisations are basically formed for religious, educational, cultural, charitable, public service to the public or special cause. The Non-for-Profit organisation is also known as a Non-Profit Organisation.

QUESTION 2

State funds received by the Not-for-Profit Organisation.

Answer: The various sources of funds for a not for profit organisation are : Individual donation, membership fees, government grants, sponsorship etc.

QUESTION 3

Explain three features of Not-for-Profit Organisation.

Answer: The features of the Not-for-Profit Organisation are.

  • Service- Its objective is to render service to any individual or a group or work for a cause without any expectation of return or profit.
  • Separate legal entity- The organisation is established as a trust or a charitable society. Therefore, it does not have an individual or group of an individual as an owner but belongs to society. It exists as a separate entity.
  • Source of Income: The source of income for a non profit organisation are donations, grants by government,memberships etc.
Important Topics in Accountancy:

QUESTION 4

Mention the financial statements of the Not-for-Profit Organisation.

Answer: The financial statements of the Not-for-Profit Organisation are.

  • Receipts and Payments Account
  • Income and Expenditure Account
  • Balance Sheet

QUESTION 5

Non-for-Profit Organisation prepare

(a) Income and Expenditure account

(b) Trading and Profit & Loss account

(c) Only the trading account

(d) None of the above

Answer: (a) Income and Expenditure account

QUESTION 6

Receipt and payments account is a summary of

(a) Debit & Credit balance of Ledger account

(b) Cash receipts & payment

(c) Income and Expenses

(d) A balance of assets and liabilities

Answer: (b) Cash receipts & payment

QUESTION 7

Subscription received in advance by a club are shown

(a) In the credit side of the income and expenditure account

(b) In the asset side of the balance sheet

(c) In the liabilities side of the balance sheet

(d) None of the above

Answer: (c) In the liabilities side of the balance sheet

QUESTION 8

Donation received for a special purpose is a

(a) Liability

(b) Revenue Receipt

(c) Capital Receipt

(d) None of the above

Answer: (c) Capital Receipt

QUESTION 9

Receipt and Payment account is

(a) Nominal Account

(b) Real Account

(c) Personal Account

(d) None of the above

Answer: (b) Real Account

QUESTION 10

Subscription received in advance during the current year is

(a) An income

(b) An asset

(c) A liability

(d) None of the above

Answer: (c) A liability

QUESTION 11

If there is a match fund, then match expenses and match income are transferred to

(a) Income and Expenditure Account

(b) An assets side of Balance Sheet

(c) Liabilities of the Balance Sheet

(d) None of the above

Answer: (c) Liabilities of the Balance Sheet

QUESTION 12

Show the format of receipt and payments account.

Answer:

Dr.                 Receipt and Payments Account for the year ended…                                    Cr.
Receipt Payment
To Balance b/d (Opening Balance)

Cash in hand

Cash in bank

To subscriptions:

For Previous Year(s) –

For the Current Year –

For Next Year(s) –

To General Donation

To Grant for Specific Purpose

To Entrance/Admission Fees

To General Grants

To Sale of Newspaper,Grass, etc

To Sale of old or Used Sports Materials

To Interest on Investments

To Income from Concerts

To Dividends

To Rent Received

To Interest Received

To Miscellaneous Receipt

To Life Membership Fee

To Subscription of Specific Purpose

To Donation for Specific Purpose

To Legacies

To Endowment Fund

To Sale of Fixed Assets

To Receipt on Account Specific Fund,

i.e Match Fund, Prize Fund,etc.

To Balance c/d (Bank Overdraft)

By Balance b/d (Opening Balance)

(in case of bank overdraft)

By Salaries

By Rent

By Postage Expense

By Advertisement Expense

By Newspaper & Magazine, etc

By Repairs

By Audit Fee

By Maintenance Expense

By Insurance

By Secretary’s Honorarium

By Honorarium

By Municipal Tax

By Prize Distributed

By Office Expense

By Expense on Show

By Miscellaneous Payment

By Purchase of Fixed Assets

By Sports Equipment

By Investment

By Books

By Loan

By Buildings

By Balance c/d (Closing Balance)

Cash in Hand

Cash in Bank


QUESTION 13

Mention two difference between the receipt and payment account and the cash book.

Answer:

Parameters Receipt and Payment Account Cash Book
Basis It is a summary of the cash book and is prepared from the cash book It records every single transaction of receipt and payment separately
Period It is prepared at the end of the accounting year It is recorded on a daily basis

QUESTION 14

Mention the important features of Income and Expenditure Account

Answer: The important features of Income and Expenditure Account are:

  • Income and Expenditure Account is a nominal account
  • It records non-cash items
  • Expenses and losses get recorded as debits and incomes are credited.
  • It records only revenue items and excludes capital items.
  • It records only current period transactions.

QUESTION 15

On the basis of the information mentioned below, calculated the stationery amount to be debited to income and expenditure account of a Good Health Sports Club for the year end 31st March 2019. Stationery purchased as on 31st March 2019 is 4,70,000

Particulars 1st April 2018 31st March 2019
Stock of Stationery

Creditors for Stationery

80,000

90,000

60,000

1,10,000

Answer:

Solution

Good Health Sports Club

Dr.              Income and Expenditure Account for the year end 31st March 2019                   Cr.

Particulars Income
To Stationery Consumed (WN) 4,90,000

Working Note (WN):

Calculating Stationery Consumed (2018-19)

Stationery Consumed = Opening stock of stationery + Purchase of Stationery- Closing stock of stationery

= ₹80,000+₹4,70,000-₹60,000

= ₹4,90,000

Since stationery purchased during the year is already given, creditors are already adjusted in it, therefore, no treatment is given to creditors.

Chapter wise Important Questions for CBSE Class 12 Accountancy
Chapter 2- Accounting for Partnership Firms- Fundamentals Chapter 3- Goodwill- Nature and Valuation
Chapter 4- Change in Profit – Sharing Ratio Among the Existing Partners Chapter 5- Admission of a Partner
Chapter 6- Retirement/Death of a Partner Chapter 7- Dissolution of Partnership Firm
Chapter 8- Accounting for Share Capital Chapter 9- Issue of Debentures
Chapter 10- Redemption of Debentures

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