Non Profit Organizations Multiple Choice Questions

Non Profit Organizations Multiple Choice Questions

Students of course 12 Accountancy should refer to MCQs Grade 12 Accountancy Not for Profit Organizations with answers provided here which is an important chapter in Grade 12 Accountancy NCERT textbook. These Multiple Choice Questions have been prepared based on the latest CBSE and NCERT syllabus for Class 12 Accounts. The post-obit MCQs can help you to practise and go better marks in the upcoming course 12 accountancy examination

Question. Which of the following is an example of not-profit-organisation:

(a) Public hospitals
(b) Corporations
(c) Audit business firm
(d) Insurance companies.

Question. The Receipt and Payment business relationship of a Not- Profit Organisation is a
(a) Nominal Business relationship
(b) Existent Business relationship
(c) Income Statement Account
(d) Financial Statements

Question. If Income is Rs.16,000 and deficit debited to Capital Fund is Rs.4,300 so Expenditure is:

(a) xvi,000
(b) four,300
(c) xx,300
(d) None of these

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

Question. Which of the post-obit statements is not true for Receipts and Payments Account?

(a) Information technology is a summary of the Cash Book.
(b) It records receipts and payments of revenue nature only.
(c) The receipts and payments may chronicle to electric current, preceding, or succeeding accounting periods.
(d) Depreciation is not shown in information technology.

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

Question. Subscription received in accelerate during the current year is :

(a) An income
(b) An asset
(c) A liability
(d) None of these R

Question. Which of the following is regarded as apt to show buy of stock-still nugget for a non profit organisation
(a) Income & Expenditure Business relationship
(b) Profit & Loss Account
(c) Remainder Sheet
(d) None of the above

Question. Receipts and payments business relationship makes no deviation betwixt:

(a) Capital Receipts and Capital payments
(b) Revenue receipts and revenue payments
(c) Current year and previous year
(d) All the to a higher place.

Question. Which of the following is to exist recorded in an income and Expenditure Account
(a) Buy of a fixed Nugget
(b) Capital Expenditure incurred on a stock-still asset
(c) Profit on the sale of a fixed asset
(d) Sale of a fixed asset

Question. Receipts and Payments Account is a Summary of :

(a) Debit and Credit balances of Ledger Account
(b) Cash Receipts and Payments
(c) Incomes and Expenses
(d) Balances of avails and liabilities U


(b) Cash Receipts and Payments.

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 Rest Canvas
(b) Profit or loss is to exist presented in income and expenditure account
(c) Profit and loss is credited in income statement.
(d) Profit or loss is added to accumulated fund.

Question. Which of the post-obit is not a acquirement receipt?
(a) Donations for Tournament
(b) Authorities Grants
(c) Subscriptions
(d) Entrance Fees

Question. Which of the following is the accounting equation for a not-profit organization?
(a) Nugget= Uppercase + Liabilities
(b) Upper-case letter+ Liabilities= Assets
(c) Accumulated Fund+ Liabilities= Avails
(d) Liabilities= Assets + Accumulated Fund

Question. Donation received for special purpose is a :

(a) Liability
(b) Acquirement Receipt
(c) Capital Receipt
(d) None of these U


(c) Capital letter Receipt.

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

Question. Which of the following is non a capital receipt?

(a) Donations for tournament
(b) Donations for building fund
(c) Life membership fee
(d) Entrance fees

Question. On What basis receipts and payments account is fabricated
(a) Cash basis
(b) Accrual footing
(c) Both Cash & Accrual basis
(d) None of the higher up

Question. Specific Donation received by NPO is shown in the

(a) Credit side of Income and Expenditure Business relationship,
(b) Debit side of Income and Expenditure Account
(c) Liabilities side of Balance Sheet.
(d) As is decided by the management.

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

Question. 2d manus 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 piece of furniture should be capitalised for
(a) Rs.6,200
(b) Rs.6,800
(c) Rs. 6,600
(d) Rs. 6,000

Question. Capital fUnd is calculated:

(a) Income-Expenditure
(b) Assets Liabilities
(c) Capital + Liabilities
(d) None of these

Question. If debit side of receipt and payment business relationship exceeds the credit side, it represents:
(a) Deficit residuum
(b) Surplus Residuum
(c)Greenbacks at Banking company
(d) Bank Overdraft

Question. The nature of Receipts and Payments Business relationship is :

(a) Nominal Business relationship
(b) Real Account
(c) Personal Account
(d) None of these U

Question. Donations received for special purpose should be
(a) Credited to a carve up fund account and shown in the Balance Canvas
(b) Treated as revenue
(c) treated every bit revenue unless the corporeality is large
(d) Non recorded at all

Read:   Calculate the Cost of Goods Sold Using the Following Information

Question. The opening residuum of Prize Fund was Rs.32,800. During the year, donations received towards this fund amounted to Rs. 15,400; corporeality spent on prizes was Rs. 12,300 and involvement received on prize fund investment was Rs.four,000. The closing balance of Prize Fund volition exist :

(a) Rs. 56,500
(b) Rs.64,500
(c) Rs.39,900
(d) Rs. 31,900

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

Question. Identify upper-case letter receipt from the following:

(a) Life Membership Fees
(b) Rent Receipt
(c) Archway fees
(d) Sports expenses.

Question. At the starting time of an accounting yr a club has avails of Rs. 19,000 and liabilities of Rs.5,000. Rs. i,800 is the debit remainder of the income & expenditures account. The opening capital fund is
(a) Rs. xviii,000
(b) Rs.11,200
(c) Rs.fifteen,800
(d) Rs. 24,800

Question. Receipts and Payments A/c is a summary of:

(a) All Capital Receipts and Payments
(b) All Revenue Receipts and Payments
(c) All Revenue and Upper-case letter Receipts and Payments
(d) None of the higher up

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

Question. Income and Expenditure Account shows :

(a) Cash in hand
(b) Surplus or Deficiency
(c) Capital Account
(d) None of these R


(b) Surplus or Deficiency.

Question. Subscription received in advance during the electric current year is

(a) an income.
(b) an asset.
(c) a liability.
(d) None of these.

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

Question. Income and Expenditure Business relationship is prepared on

(a) Cash Basis.
(b) Accrual Basis.
(c) Both (a) and (b).
(d) Sales Footing,

Question. Arrears residual can exist shown in balance Sheet as:
(a) Liability
(b) Assets
(c) Owner’s equity
(d) None of the in a higher place

Question. Income and Expenditure Business relationship more often than not indicates:

(a) Surplus/Deficit
(b) Cash Residual
(c) Majuscule Fund
(d) Net Profit/Loss

Question. Receipts and Payments Account is prepared on

(a) Cash Basis.
(b) Time Basis.
(c) Accrual Basis.
(d) Sales Basis.

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

Question. Furniture as on 31st March, 2019 Rs. 4,40,000. Furniture (having Book value equally on 1st April, 2018 of Rs. 40,000) sold at a loss of xx% on 31st December, 2018. Furniture is depreciated @ 10% p.a. Furniture costing Rs. iii,00,000 was also purchased on 1st October, 2018. Calculate Loss on auction of furniture.

(a) Rs. 9,400
(b) Rs. half dozen,400
(c) Rs. 8,000
(d) Rs. 7,400

Question. Receipts and Payments Account is a

(a) Real Account.
(b) Nominal Account.
(c) Personal Business relationship.
(d) Revenue Account

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

Question. Subscription received during the twelvemonth l,000 Rs. Subscriptions outstanding at the end of the year 8,000 Rs. Subscription outstanding at the outset of the year half-dozen,000 Rs. Net Income from subscription will be :

(a) 48,000 Rs.
(b) 64,000 Rs.
(c) 52,000 Rs.
(d) 36,000 Rs.

Question. Donation received for a special purpose:

(a) Should be credited to Income and Expenditure Account
(b) Should be credited to dissever account and shown in the Balance Sheet
(c) Should exist shown on the assets side
(d) Should not exist recorded at all.

Question. Corporeality received from the sale of old article of furniture past a club is treated equally:
(a) Revenue Receipt
(b) Upper-case letter  Receipt
(c) Asset
(d) liability

Question. Subscription received by an organisation is:

(a) Capital Receipt
(b) Acquirement Receipt
(c) Both (a) and (b)
(d) None of the above

Question. Subscription received in greenbacks during the year amounted to Rs.five,00,000; subscription outstanding at the stop of previous year was Rs.twenty,000 and outstanding at the terminate of current year was Rs.25,000. Subscription received in advance for next year was Rs. viii,000 and received in advance during previous year was,000. The amount credited to Income & Expenditure Account will be :

(a) Rs.v,04,000
(b) Rs.5,06,000
(c) Rs.4,96,000
(d) Rs.4,94,000

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

Out of the following items, which is shown in the ‘Receipts and Payments A/c’ of a not for profit organisation?

(a) Subscription received in advance
(b) Last twelvemonth subscription received
(c) Current year subscription received
(d) All of the higher up

A not for turn a profit organisation includes:

(a) Religious Organisations
(b) Merchandise unions
(c) Clubs
(d) Educational institutions
(due east) All of the above

Read:   The Owner Contributed to the Business and Made No Withdrawals.

Question. Salaries payable for the current yr corporeality to Rs. 8,500 at the stop of the year. Outstanding salaries amounted to Rs. 300. Salaries paid in advance terminal year pertaining to the current twelvemonth amounted to Rs.500. Prepaid salaries for the adjacent yr amount to Rs.250. full amount paid for salaries during the year is
(a) Rs.7,550
(b) Rs.7,500
(c)  Rs. 7,950
(d) Rs.6,500

Question. Life Membership Fees received past a society is shown in :

(a) Income and Expenditure A/c
(b) Balance Canvass
(c) Receipts and Payments A/c
(d) None of these

Question. Salaries paid during the year ended 31st March, 2020 is Rs. 36,000. Salaries paid in advance at the stop of previous year were Rs. 54,000. The amount of Salaries to exist debited to income and Expenditure Account for the yr ended 31st March, 2020 will be

(a) Rs. 54,000.
(b) Rs. 36,000.
(c) Rs. xc,000.
(d) Rs. 18,000.

Question. The excess of assets over liabilities in non-trading concerns is termed as:

(a) Capital letter Fund
(b) Capital
(c) Turn a profit
(d) Internet Turn a profit

Question. Life membership fee received by a club is:

(a) Acquirement Receipt
(b) Capital Receipt
(c) (a) and (b) both
(d) None of these

Question. An Income and Expenditure Account reveals:

(a) Cash position.
(b) Surplus or Deficit.
(c) Capital letter Fund.
(d) None of the above.

Question. Most transaction in non-trading concerns are:

(a) Cash
(b) Credit
(c) Both (a) and (b)
(d) None of these

Question. Which of the following is straight added to the uppercase fund on the liabilities side of the Balance Sheet?

(a) Life membership fees
(b) Legacies
(c) Entrance Fees
(d) All of these

Question. Income and Expenditure Account records transactions of:

(a) Revenue nature only
(b) Capital letter nature simply
(c) Both revenue and uppercase nature
(d) Income of just revenue nature and expenditure of revenue and capital nature.

Question. The amount of ‘Entrance Fees’ received past a Not-profit arrangement (if it is received regularly) is shown in which of the following?

(a) Liability side of Balance Sheet
(b) Avails side of Balance Sheet
(c) Debit side of Income and Expenditure Account
(d) Credit side of Income and Expenditure Business relationship

Question. Credit side balance in Income & Expenditure Account reveals :

(a) Backlog of cash receipts overpayments
(b) Backlog of greenbacks payments over receipts
(c) Excess of expenditure over income
(d) Excess of income over expenditure

Question. Subscription received in advance during the current year is :

(a) an income
(b) an asset
(c) a liability
(d) none of these

Question. The opening balance of Prize Fund was Rs.32,800. During the year, donations reoeived towards this fund amounted to Rs.15,400; amount spent on prizes was 712,300 and interest received on prize fund investment was Rs.4,000. The closing balance of Prize Fund will exist :

(a) Rs.56,500
(b) Rs.64,500
(c) Rs.39,900
(d) Rs.31,900

Question. 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) Avails.
(d) Earned income.

Question. If a Full general Donation of huge amount is received by a school, that donation is treated equally :

(a ) Revenue Receipt (Income)
(b) Upper-case letter Receipt (Liability)
(c) Avails
(d) Earned Income

1. The method in which goodwill is calculated on the basis of surplus profit in comparison to average profit a) Super profit
b) Average turn a profit
1. Experienced direction increased 2. Increased number of customers over a flow of time
2. Increased number of customers over a catamenia of time b)Longevity of business
c)Efficiency of management
d) Risk involved
1) Interest on capital letter allowed to partners a) Profit and Loss A/c is Credited
2) Involvement on cartoon charged by firm b) Credited to partners’ capital letter A/c
c) Debited to partners’ capital A/c
d) Turn a profit and Loss A/c is debited
1. Interest on capital a) Cr. Side of Profit and Loss Appropriation A/c
2. Interest on drawing b) Dr. side of Profit and Loss Appropriation A/c
c) Dr. of Partner Loan
1. Fixed capital a) Additional Capital Introduced
two. Fluctuating capital b) Interest on Cartoon
c) Interest on Partner Loan
d) Rent to Partner

Fill up in the blanks for Course 12 Accountancy Not for Turn a profit Organizations:

Capital Fund = Total Avails −

Question.Full general Fund tin can be transferred to ————————— Fund

Surplus or Deficit Rest of Income and Expenditure Account is transferred to

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

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

The nature of Income and Expenditure Account is__________

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

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



means amount received or gear up aside by a Not-for-Profit Organization for a specific purpose.

restricted fund can exist used for ————————-purpose

One Word / Sentence Answers :

Question. The primary purpose or objective of not-for-profit organization.


Rendering services to the people.

Question. The Account that shows the summary of cash receipts and cash payments of a not-for-profit organization______

Question. The fund unremarkably of a non-turn a profit institution, arising from gift, the income of which is devoted to a specified purpose______

Mayank Gild received life membership fees from its members. Which type of receipts information technology is_______ ?

Question. Land the nature of Receipts and Payments A/c.

Question. State the basis of bookkeeping on which ‘Receipt and Payment Account’ is prepared in instance of Notfor Profit System.


Cash Basis of Accounting.

Question. What is the nature of Income and Expenditure Account ?

Question. Name the term used for showing excess of income over expenditure in not-for-profit organizations.

Question. When the Receipts and Payments Account is converted into an Income and Expenditure Account and accounting concept is to be followed for provisions of the accruals and outstanding, what is the concept that is followed ?


Mercantile organization of bookkeeping.

Question. Where volition you credit the general donations in the accounts of not-for-profit organization?


Income and Expenditure Account.

Question. Where is specific donation received shown in the terminal accounts of a not-for-profit organization?


Shown on the liability side of the balance sheet and the amount spent is deducted from the donation amount.

Question. Classify subscriptions into revenue receipts or capital receipts.

Question. What will be the treatment of ‘Subscription received in advance’ during the current year in the Balance Canvas of a Non-For-Turn a profit System?


Recorded on the liability side of current twelvemonth’s Rest Sheet.

Question. One horse of a horse order died. Insurance company has offered to settle the claim at 60%. Volition it be recorded in the income and expenditure business relationship and how ?


xl% loss will be debited in Income and Expenditure Account.

Curt Reply Type Questions

Q. ane. Explicate any two of the post-obit :

(i) Upper-case letter Fund (two) Legacy (3) Specific Fund


(i) Uppercase Fund : The term ‘capital letter’ is nowhere found in the case of non-profit organizations instead capital fund, full general fund or accumulated fund is appearing in the Remainder Sheet. The amount of this fund is calculated by deducting the corporeality of liabilities from the value of assets. In this manner, we can say that the method of finding out this fund is exactly the same way every bit to calculate the majuscule of any business concern enterprise.

(ii) Legacy :
Legacies represent the amount received by organization under a volition on death of the contributors. The reasons may exist specific or general. It is shown as receipts in the Receipts and Payments Business relationship. It is generally non-recurring in nature, hence capitalized. Legacies received for a specific purpose should be capitalized in the name of the fund for which it has been received. Legacies received for general purposes may be added to the majuscule fund. However, legacies of a small amount may be treated as income.

(iii) Specific Fund :
Specific fund is created to bear out those specific activities for which such fund is obtained, e.g., Prize fund, Sports fund, Loan fund, etc.

Q. 2. Explicate the accounting treatment of these items in not for-profit organizations :

(i) Legacy (ii) Archway fees


(i) Legacy : It is the amount received as donation by a Not-For-Profit Arrangement under will of a deceased person. The donor may or may non specify conditions for its utilise.
(a) In example, no condition is specified, it is considered every bit ‘Full general Donation’. It is accounted as acquirement receipt and is credited to Income and Expenditure Account.
(b) In instance a status is specified, it is accounted equally Specific Donation. It is accounted as majuscule receipt and is credited to ‘Fund Account’ maintained for the purpose. It is shown on the liability side of Balance Sail. Income related to such fund is credited to the fund while expenses are debited.
(two) Archway fee : Entrance fee or Admission fee is the amount paid past a person at the fourth dimension of becoming a member of a Not-For-Profit System. It is a revenue receipt and therefore accounted as an income and credited to Income and Expenditure Business relationship.

Long Answer Type Questions-I

Question. Briefly explicate the following terms with accounting treatment in not-for-turn a profit organization :
(i) Legacy
(2) Specific Donation
(iii) Honorarium
(4) Entrance fees.


(i) Legacy :
Legacy is the amount received past an organisation from a deceased person, as his will. It is shown on the debit side of Receipts and Payment Account and liabilities side of Balance Sail.
(ii) Specific Donation :
If the donation is for a specific purpose, say for the construction of a building or pavilion, it is known as specific donation. It is shown on liabilities side of Remainder Sheet.
(three) Honorarium :
Honorarium is a payment fabricated to a person who has voluntarily undertaken a service which would normally command a fee. It is an expression of gratitude rather than a payment for the services. It is treated equally revenue expenditure. It is shown in debit side of Income and Expenditure Business relationship.
(iv) Archway Fees :
Entrance Fees or Admission Fees is the corporeality paid by a person at the time of condign a member of a Not-for-Turn a profit Organization. Entrance Fee or Admission Fee is a revenue receipt and therefore, is deemed as an income and credited to Income and Expenditure Account.

Nosotros hope the above multiple choice questions for Class 12 Accountancy for Chapter ane Not for Profit Organizations provided above with answers based on the latest syllabus and exam guidelines issued by CBSE, NCERT and KVS are really useful for you. Not for Profit Organizations is an of import chapter in Class 12 as it provides very strong understanding about this topic. Students should go through the answers provided for the MCQs after they have themselves solved the questions. All MCQs have been provided with four options for the students to solve. These questions are really useful for benefit of grade 12 commerce students. Delight get though these and let us know if you lot accept whatever feedback in the comments department.

Non Profit Organizations Multiple Choice Questions


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