Questions on Financial Statements of Not for Profit Organisations

Practice Questions on Financial Statements of Not for Profit Organisations

1. What is the motive of a NPO?
2. List the financial statements to be prepared for a not for profit organisations.
3. Why is profit & loss a/c not prepared for a NPO?
4. On what basis of accounting, receipts and payments account is prepared?
5. What is the nature of receipts and payments account?
6. On what basis of accounting, income and expenditure account is prepared?
7. What is the nature of income and expenditure account?
8. Only the items of capital nature are recorded in receipts and payment account. True or False? Give reason. 
9. Only the items of revenue nature are recorded in income and expenditure account. True or False? 
10. If a sports club has opening cash balance of Rs 2500, subscriptions are Rs 24,000, donations Rs 6,000, honorarium paid Rs 1,500, rent paid Rs 4,000, furniture purchased Rs 5,000. During the year, depreciation @ 10% p.a. was charged on furniture. Find out closing cash balance. 
11. If incomes are Rs 7,500 and expenses are Rs 5,000, find out the amount of surplus/deficit. 
12. If incomes amounted to Rs 7,000 and deficit is Rs 5,000 , determine the amount of expenditure.
13. How will you treat the following items in financial statements of a NPO?                                  a. Subscriptions b. Honorarium c. Furniture of Rs 5,000 sold for Rs 6,200 d. Life Membership Fees e. Building Donation e. Interest received on investment f. Donation g. Furniture Purchased
14. What do you mean by fund based accounting?
15. If tournament fund is Rs 50,000, donation received for tournament Rs 5,000 and tournament expenses are Rs 35,000, how will you treat in financial statements of NPO?
16. If tournament fund is Rs 50,000, donation received for tournament Rs 5,000 and tournament expenses are Rs 75,000, how will you treat in financial statements of NPO?
17. If salary paid during a year is Rs 5,500, outstanding at the end of the year is Rs 500 and outstanding at the beginning of the year is Rs 100, find out the amount of salary that will be shown in income and expenditure a/c?
18. Subscriptions received during the year Rs 5,500. Amount received in advance for the next year is Rs 800. Amount outstanding for the current year is Rs 300. Find out the amount of subscriptions to be credited to income and expenditure account. 
19. Advance Subscriptions are _____ for the NPO. (Asset/Liability/Income/Expenditure)
20. Outstanding Subscriptions are _____ for the NPO. (Asset/Liability/Income/Expenditure)

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