Non-profit organisations accounts MCQs
The capital of a non-profit organization is generally known as
A) EquityWRONG ANSWER
B) Accumulated fundRIGHT ANSWER!!!
C) Cash fundWRONG ANSWER
D) Financial reserveWRONG ANSWER
When cash is received for life membership, which one of the following double entries is passed?
A) Cash Debit and capital Credit WRONG ANSWER
B) Life membership Debit and cash Credit WRONG ANSWER
C) Investment Debit and cash Credit WRONG ANSWER
D) Cash Debit and life membership fund Credit RIGHT ANSWER!!!
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 WRONG ANSWER
B) Profit or loss is to be presented in income and expenditure accountRIGHT ANSWER!!!
C) Profit and loss is credit in income statement WRONG ANSWER
D) Profit or loss is added to accumulated fund WRONG ANSWER
Which of the following is the accounting equation for a non-profit organization?
A) Asset = Capital + Liabilities WRONG ANSWER
B) Capital + Liabilities = AssetsWRONG ANSWER
C) Accumulated fund + Liabilities = Assets RIGHT ANSWER!!!
D) Liabilities = Asset + Accumulated fund WRONG ANSWER
Subscription received but not yet earned is considered as a/an
A) Asset WRONG ANSWER
B) Liability RIGHT ANSWER!!!
C) Income WRONG ANSWER
D) Expenditure WRONG ANSWER
A non-profit organization received $10,000 as the entrance fee of a new member. If 20% of the fee has to be capitalized, what is the amount of fee needs to be shown in the income and expenditure account?
A) $2000WRONG ANSWER
B) $8000RIGHT ANSWER!!!
C) $9000WRONG ANSWER
D) $10,000WRONG ANSWER
$10,000 received as the annual membership subscription. Out of this, $2000 is pertaining to the previous accounting period whereas $1000 is receivable at the end of the current accounting period. Calculate the amount of subscription that will be shown in the income and expenditure account for this accounting
A) $10,000WRONG ANSWER
B) $9000 RIGHT ANSWER!!!
C) $12,000 WRONG ANSWER
D) $8000WRONG ANSWER
The balance sheet of a non-profit organization such as a charitable hospital doesn’t contain the
A) AssetsWRONG ANSWER
B) BuildingWRONG ANSWER
C) DebtsWRONG ANSWER
D) Owner’s equityRIGHT ANSWER!!!
Income and expenditure accounts show
A) Cash available to an organization WRONG ANSWER
B) Closing capital of an organization WRONG ANSWER
C) Cash available in the bank account WRONG ANSWER
D) Surplus or deficit for the current accounting periodRIGHT ANSWER!!!
On what basis the receipts and payments account is prepared?
A) Cash basisRIGHT ANSWER!!!
B) Accrual basis WRONG ANSWER
C) Both accrual and cash basis WRONG ANSWER