NCERT Class 12 Accountancy Chapter 1 Accounting for Not-for-Profit Organisation Extra Questions and Answers
Class 12 Accountancy Chapter 1 Extra Questions and Answers – Accounting for Not-for-Profit Organisation. Here in this Page Class XII Students can Learn Extra Questions & Answer 1st Chapter Accountancy Part I fully Inside.
We Provided Here Accounting for Not-for-Profit Organisation Accountancy Chapter 1 MCQ Questions, Very Short Type Questions and Short Type Questions.
Class 12 Accountancy Chapter 1 Extra Question with Answer – Accounting for Not-for-Profit Organisation
Accountancy Chapter 1 Accounting for Not-for-Profit Organisation Class 12 Inside 3 marks, 2 Marks & And 1 Marks Important Questions and Answers.
Board |
NCERT |
Class |
12 |
Book Title |
Accountancy Part I |
Chapter |
1 |
Chapter Name |
Accounting for Not-for-Profit Organisation |
Topic |
Extra Questions |
Very short Questions with Solution:
(Q1) Mention any one value depicted by 10 non profit organisation.
Ans: The value depicted by non-profit organisation is social values – i.e. providing social services like free health facilities etc to needy people.
(2) How are general donations treated while preparing financial statement of Non-profit Organisation?
Ans: General Donations are recorded in credit side of income and expenditure account.
(3) How is sale of old newspaper treated while preparing final accounts of NPO?
Ans: Sale of old newspaper is treated as an income and is credited to income & expenditure account.
(Q4) Mention the account where capital and revenue payments of a non-profit organisation is recoded?
Ans: The capital and revenue payment of a non-profit organisation is recorded in receipt & payment A/c.
(Q5) How do you treat “Subscription received in advance” during the current year in balance sheet of a NTO?
Ans: “Subscription received in advance” during current year is shown on the liability side of balance sheet of a NPO.
(Q6) How is the capital fund of a NPO calculated when it remains silent in the question?
Ans: The capital fund of a NPO is calculated by preparing an “opening balance sheet”.
(Q7) “Subscription in arrear” at the end of year is shown in which side of balance sheet of a NPO?
Ans: “Subscription in arrear” at the end of the year is shown in the asset side of closing balance sheet of a NPO.
(Q8) Does income & expenditure account record both transaction related to revenue and capital nature?
Ans: No, income & expenditure account records only revenue nature of transactions.
(Q9) What does the closing balance “receipt & payment A/c” indicate?
Ans: The closing balance of receipt & payment indicate closing balance of cash in hand and in bank or overdraft in bank.
(Q10) Where is the “excess of income over expenditure” is added in case of NPO?
Ans: The “excess of income over expenditure” is added to the capital fund in case of a NPO.
(Q11) Give two examples of “Revenue receipts” in case of NPO.
Ans: Two examples of Revenue receipts for NPO are – rent received and interest received.
(Q12) Give two examples of “Capital expenditure” for NPO.
Ans: Two examples of capital of expenditure for a NPO are – purchase of securities, purchase of building etc.
(Q13) Show the treatment of “sports fund” in preparing final accounts of a NPO.
Ans: “Sports fund” is recorded in liabilities side of a balance sheet for a NPO.
(Q14) Where is “Life membership Fee” recorded while preparing the final accounts of a NPO?
Ans: “Life membership Fee” is recorded in the liabilities side of balance sheet and is added with capital fund of a NPO.
(Q15) Mention the treatment of “legacy” and “entrance fees” in preparation of income & expenditure A/c.
Ans: Legacy will not be shown in income & expenditure A/c as it is not a revenue item, and “Entrance fees” is an income for NPO so it is credited in income & expenditure A/c.
(Q16) How is “subscription received in advance” at the end of current year treated in income & expenditure A/c of a NPO?
Ans: “Subscription received in advance” at the end of Current year is an income for the next year and is deducted from the amount of subscription on the credit side of incomes & expenditure A/c.
(Q17) How is “Subscription received in advance” at the beginning of current year treated in balance sheet of a NPO?
Ans: “Subscription received in advance” at the beginning of current year is an income for the present year and will be shown on the liabilities side of opening balance sheet of a NPO.
(Q18) Mention any two examples of capital receipts of a NPO.
Ans: Two examples of capital receipts of a NPO are – Endowment fund receipts and legacy.
(Q19) What is the treatment of charity expenses in balance sheet of a NPO?
Ans: Charity expenses have to be deducted from charity fund on the liability side of the balance sheet of a NPO.
(Q20) Which account is classified as the summary of a cash book incase of a NPO?
Ans: Receipt & payment account is summarized as a cash book in-case of a NPO.
Short Answer Type Questions (3/4 marks)
(Q1) Thought it is said that “receipts & payment A/c” of NPO is akin to cash book of a trading organisation, still —- has some differences between them. Mention such four points of difference between them.
Ans: The difference between cash book & receipt & payment A/c are as follows:
Basis | Receipt & Payment A/c | Cash Book |
(1) Basis of preparation | (1) It is prepared on cash basis of cash book transaction | (1) It is prepared on the basis of each cash receipt & cash payment |
(2) Period | (2) It is prepared at the end of accounting year & is a summary of cash book. | (2) It is prepared on the basis of daily transactions. |
(3) Debit & credit sides | (3) It has receipts payments sides | (3) It has debit & credit sides |
(4) Ledger Folio column | (4) It has no ledger Folio columns | (4) It has a ledger —- column |
(Q2) Mention any three features of Non-profit organisation.
Ans: The three features of non-profit organization are as follows –
(i) Service motive:
These organisations work to provide basic services to public like – education, health, sports etc. They provide these services at nominal cost or at free of cost.
(ii) Source of income:
Major sources of income are subscription from members, donations, financial assistance from government etc.
(iii) Separate Entity:
Non profit organisation have a separate legal existence and is considered separate from its members. Its activities are not affected by the admission, retirement or death of its members.
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