CHAPTER 1 :- NOT FOR PROFIT ORGANISATION

MULTIPLE CHOICE QUESTIONS

Sl.No Question:
1 National sports club received Rs. 25,000 as subscription during the year 2018-19. The
club has 300 members each pay Rs. 100p.a, during the year 2017-18, 10 members
had paid their subscription for year 2018-19. The amount of subscription outstanding
for the year 2018-19 will be-
(A) 4000
(B) 6000
(C) 5000
(D) 3000
2 Receipts and Payments Accounts generally shows:
(a) A Debit balance
(b) A Credit balance
(c) Surplus or deficit
(d) Capital Fund
3 Subscription received by a school for organizing annual function is a:
(a) Capital receipts
(b) Revenue receipts
(c) Assets
(d) Earned income
4 Subscription received in cash Rs 60,000; subscription received in advance for next
year Rs 3,000 and received in advance during previous year is Rs 2,000.Subscription
in arrears at the end of current year Rs5,400 . Amount credited to Income and
Expenditure Account will be :
(a) Rs 53,600
(b) Rs. 55,600
(c) Rs. 66,400
(d) Rs. 64,400
5 Excess of Income over Expenditure is:
(a) Deficit
(b) Capital Fund
(c) Surplus
(d) Deficiency

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 6 Subscription received by a Library is:
(a) Capital receipt
(b) Revenue receipt
(c) Asset
(d) Unearned income

7 Subscription received in advance during the Current year:

(a) an Income
(b) an Assets
(c) a Liability
(d) an expense

8 Amount paid for stationary purchased Rs45,000 .the creditor for stationary in the
beginning and end of the year Rs 4,000 and Rs 6,500. Cash purchase of stationary is
Rs15,000 . calculate the amount of stationary purchased in the current year :
(a) Rs 47,500
(b) Rs 37,500
(c) Rs 52.500
(d) Rs 62,500

9 Amount received by sale of crockery should be treated as :

(a) Revenue Receipts
(b) Capital receipts
(c) Assets
(d) Unearned income

10 Subscription received for the year ended 31st march 2016 is Rs 1,80,000 ;
subscription outstanding on 31st march 2015 is Rs 15,000 ( out of which Rs 10,000 is
received in 2016 ) and subscription outstanding on 31st march 2016 is Rs 18,000.
What will be the outstanding subscription for the year 2015- 2016 :
(a) Rs 18,000
(b) Rs 15,000
(c) Rs 13,000
(d) Rs 10,000

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 11 The amount received by a non trading concern as per the will of a deceased person is known
as

(A) Donation
(B) Grants
(C) Subscription
(D) Legacy

12 Salaries paid during the year ended 31st March 2021 is ₹ 36,000. Salaries paid in advance at
the end of previous year were ₹ 54,000. The amount of salaries to be debited to income and
expenditure account for the year ended 31st March 2021 will be

(A) ₹. 54,000
(B) ₹. 36,000
(C) ₹ 90,000
(D) ₹ 18,000
13 Income and Expenditure A/C is an ................ Account

(A) Nominal
(B) Real
(C) Personal
(D) None of the above
14 The amount received for sale of sports material 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) Asset side of Balance sheet
15 Subscription received in advance is......................

(A) Expense
(B) Asset
(C) Income
(D) Liability
16 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

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 (A) ₹. 1,900
(B) ₹.10,200
(C) ₹.10,600
(D) ₹.7,600
17 Legacy donation received by NPO to be used for specific purpose is accounted as

(A) Revenue receipt

(B) Capital receipt
(C) An asset
(D) Is decided by the management
18 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) 7,550
(B) .7,500
(C) ₹ 7,950
(D) ₹ 6,500
19 Life membership fees received by NPO is accounted as

(A) Revenue receipt

(B) Capital receipt
(C) An asset
(D) Miscellaneous receipt
20 There are 200 members, each paying an annual subscription of ₹ 1,000; subscription
received during the year ₹ 1,95,000; subscriptions received in advance at the beginning of
the year ₹ 3,000 and at the end of the year ₹2,000. – Amount shown in Income &
Expenditure Account will be :

(A) ₹ 2,00,000
(B) ₹ 1,96,000
(C) ₹ 1,94,000
(D) ₹ 2,01,000
21 Receipts and Payments Account generally shows :
(A) A Debit balance
(B) A Credit balance
(C) Surplus or Deficit
(D) Capital Fund

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 22 Income and Expenditure Account records transactions of:
(A) Revenue nature only
(B) Capital nature only
(C) Both revenue and capital nature
(D) Income of only revenue nature and expenditure of revenue and capital nature.
23 Income and Expenditure Account reveals :
(A) Surplus or Deficiency
(B) Cash in Hand
(C) Net Profit
(D) Capital Account
24 The amount of ‘Subscription received from members’ by a Non-profit organisation is shown in
which of the following?
(A) Debit side of Income and Expenditure Account
(B) Credit side of Income and Expenditure Account
(C) Liability side of Balance Sheet
(D) Assets side of Balance Sheet
25 Donation received for a special purpose :
(A) Should be credited to Income and Expenditure Account
(B) Should be credited to separate account and shown in the Balance Sheet
(C) Should be shown on the assets side
(D) Should not be recorded at all.
26 Subscription received by a school for organising annual function is treated as:
(A) Capital Receipt (i.e., Liability)
(B) Revenue Receipt {i.e., Income)
(C) Asset
(D) Earned Income
27 Not-for-profit organisations prepare :
(A) Trading Account
(B) Trading & Profit and Loss Account
(C) Income and Expenditure Account
(D) All of the above
28 Income and Expenditure Account is a :
(A) Personal Account
(B) Real Account
(C) Nominal Account
(D) Real and Nominal Account, both
29 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

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 (D) Both Income and Expenditure A/c and to Balance Sheet

30 Subscription received in advance during the current year is :

(A) an income
(B) an asset
(C) a liability
(D) none of these
31 A not for profit organization prepares.
(A) Trading account
(B) Receipts and Payments
(C) Income & Expenditure Account
(D) Both (b) and (c)

32 Which of the following is not a source of fund for Not for Profit Organisation ?
(A) Legacy
(B) Sale of goods
(C) Income from Investments
(D) Grants in aid

33 Subscription still to be received is :

(A) A Liability
(B) An Asset
(C) An Income
(D) An Expense

34 Capital receipts are shown in?

(A) Trading A/c
(B) Profit & Loss a/c
(C) Balance Sheet
(D) Manufacturing a/c

35 In a not for profit organization, the amount of membership which is paid by the members
every year is known as
(A) Subscriptions
(B) Legacy
(C) Entrance Fees
(D) Donation

36 Income & Expenditure a/c generally indicates ?

(A) Cash balance
(B) Surplus/Deficit
(C) Capital Fund

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 37 Property received as a result of the will of the deceased person is called:
(A) Legacy
(B) Honorarium
(C) Subscriptions
(D) Entrance fee

38 Total Subscriptions received during 2020-21 amounted to Rs. 45000 (including Rs. 4000 for
2019-20 and Rs. 3000 for 2021-22). Subscriptions outstanding as on 31st March 2021 were
Rs. 6400 and that on 31st March 2020 Rs. 4000. Calculate the amount of subscriptions for the
year 2020-21 :
(A) Rs. 45400
(B) Rs. 43400
(C) Rs. 38000
(D) Rs. 52000

39 Stock of stationery as on 1.4.2021 Rs. 6000 and that on 1.4.2020 Rs. 5000. Stationery
purchased during 2020-21 amounted to Rs. 17000. Calculate the amount of stationery to be
show in the I/E a/c for the year 2020-21
(A) Rs. 18000
(B) Rs. 23000
(C) Rs. 22000
(D) Rs. 16000

40. Payment of honorarium to secretary is treated as ?

(A) Revenue Income
(B) Capital Income
(C) Revenue Expenditure
(D) Capital Expenditure

41 The account which shows classified summary of transactions of a Cash Book in a Not for
Profit Organisation is called:
(A) Income and Expenditure Account
(B) Receipts and Payments Account
(C) Profit and Loss Account
(D) Subscriptions Account
42 Income and Expenditure records :
(A) Receipts and Payments of revenue and capital nature.
(B) Income and Expenditure of revenue nature only
(C) Expenditure of capital nature only
(D) Receipts of revenue nature only.
43 Which of the following is a revenue receipt for a not for profit organisations:
(A) Endowment fund

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 (B) Government Grants
(C) Life membership fees
(D) Legacies(Specific)
44 Sports Club has income of Rs.16,000 and deficit debited to capital fund of Rs.4,300 for the
year 2019-20, then expenditure for the year 2019-20 is:
(A) Rs.11,700
(B) Rs.4,300
(C) Rs.20,300
(D) None of these
45 The amount paid for stationery during the year was Rs.10,000. Opening stock of stationery
was Rs.1,500 and closing stock of stationery amounted to Rs.2,200. The amount of
stationery to be shown in the income and expenditure will be:
(A) Rs.9,300
(B) Rs.6,300
(C) Rs.10,700
(D) Rs.13,700

46 The opening balance of Tournament Fund of a Sports Club was Rs. 50,000. Donations
received towards this fund during the accounting year amounted to Rs.6,000. During the
year Rs.4,000 was spent on Tournament and Rs.1,000 was received as interest on
investment of the Tournament Fund. The closing balance of Tournament Fund will be:
(A) Rs.53,000
(B) Rs.61,000
(C) Rs.51,000
(D) Rs.39,000
47 Which of the following is not a capital receipt?
(A) Donation for tournament
(B) Donation for building fund
(C) Life membership fee
(D) Entrance fees
48 Subscription received in advance during the accounting year is :
(A) An income
(B) An expense
(C) Asset
(D) Liability

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 49 General Donation received by not for profit organisation is shown on the :
(A) Credit side of Income and Expenditure Account
(B) Assets side of the Balance Sheet
(C) Liabilities side of the Balance Sheet
(D) Debit side of Income and Expenditure.

50 On April 1st 2019, Shiva Club had a Prize Fund of Rs.8,00,000. It incurred expenses on prizes
amounting to Rs.8,70,000 during the year. The balance of Prize Fund in the Balance Sheet
as at 31st March, 2020 will be:
(A) Rs.70,000
(B) Rs.8,00,000
(C) (Rs.70,000)
(D) Zero

51 Which of the following capital receipts are directly added to the capital fund on the liabilities
side of the Balance Sheet?
(A) Life Membership fund
(B) Legacies
(C) Entrance Fees
(D) All of the above
52 Where closing balance of bank overdraft will be shown
(A) Receipt and Payment account on debit side
(B) Receipt and Payment account on credit side
(C) cash book account on debit side
(D) Income and Expenditure account on debit side
53 Legacies of small amount may be treated ----------- and shown in ---------
(A) Income , Income and Expenditure account
(B) Expenses , Income and Expenditure account
(C) Expenses , receipts and payment account
(D) None
54 How are specific donations treated while preparing final accounts of a not-for-profit
organisation?
(A) shown in the credit side of Income and Expenditure account
(B) shown in the debit side of Income and Expenditure account
(C) Capitalised and shown in Balance sheet
(D) None
55 ------------ financial statement is prepared by a not-for- profit organisation on accrual basis
(A) Opening Balance Sheet
(B) Income and Expenditure account
(C) Receipts and Payments account
(D) None
56 Which of the following is never shown on the payment side of Receipt and Payment account,
but is shown as an expanse 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 the above
57 What balance of Tournament Fund will be as on 31.3.2020, if
Tournament fund as on 1.4.2019 is Rs.10700
Subscription for tournament received during the year Rs.65800
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 Expenditure incurred during the year on conducting tournaments Rs.72400
(A) Rs.4000
(B) Rs.4100
(C) Rs.4010
(D) Rs.410
58 From the following information calculate the amount of medicines to be posted to Income
and Expenditure Account of Sargam Hospital for the year ending 31st march 2020:
Stock of Medicine (1.4.2019) Rs.25000
Stock of Medicine (31.3.2020) Rs.20000
Creditors for Medicine (1.4.2019) Rs.15000
Creditors for Medicine (31.3.2020) Rs.28000
Medicines purchased during the year ended 31st march 2020 was Rs.100000.
(A) Rs.100000
(B) Rs.101000
(C) Rs.105000
(D) none
59 Not-for-profit organisations are not set-up for
(A) Religious organisation
(B) Trade unions
(C) Schools
(D) Public companies
60 Which of the following is not included in the major source of income for a not-for-profit
organisations
(A) Government Grants
(B) Legacies
(C) Income from investments
(D) none of the above

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 ANSWER KEY
1 D
2 C
3 A
4 A
5 D
6 B
7 B
8 C
9 B
10 A
11 (A) 4000
12 (a) A Debit balance

13 (b) Revenue receipts

14 (d) Rs. 64,400

15 (d) Deficiency
16 (b) Revenue receipt

17 (c) a Liability
18 (d) Rs 62,500
19 (b) Capital receipts

20 (c) Rs 13,000
21 (A) A Debit balance
22 (A) Revenue nature only
23 (A) Surplus or Deficiency
24 (B) Credit side of Income and Expenditure Account
25 (B) Should be credited to separate account and shown in the Balance Sheet
26 (A) Capital Receipt (i.e., Liability)
27 (C) Income and Expenditure Account
28 (C) Nominal Account

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29 (C) Liabilities side of Balance Sheet
30 (C) a liability
31 D
32 B
33 B
34 C
35 A
36 B
37 A
38 B
39 D
40 C
41 B
42 B
43 B
44 C
45 A
46 A
47 D
48 D
49 A
50 D
51 D
52 A
53 A
54 C
55 B
56 D
57 B
58 C
59 D
60 D

PREPARED BY THE PGTs ( COMMERCE ) OF BHUBANESWAR, GUWAHATI, KOLKATA,

RANCHI, SILCHAR AND TINSUKIA REGIONS.

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