Assertion Reason MCQs of NPO Accountancy Class 12

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Looking for important MCQs of NPO (Not for profit organization) chapter with answers and explanation of accountancy class 12 CBSE, ISC, and other state board.

Below is the collection of all important Multiple Choice Questions of NPO chapter with answers of class 12

Assertion Reason Multiple Choice Questions of NPO with answers class 12

Let’s Practice

Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives given below:

Assertion (A): The main objective of the non-profit organization is to serve society at free of cost or a nominal cost.

Reason (R): It is managed by the managing committee who is elected by its members.

Alternatives:

a) Both Assertion and Reason are true and Reason (R) is the correct
explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct
explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Ans – b)
Explanation:- Both Assertion and Reason are true. But Reason does not clearly explain why NPOs main objective is, to serve the society.

Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives given below:

Assertion (A): Opening and closing balances are recorded in the income and expenditure account.

Reason (R): It is prepared at the end of the accounting year.

Alternatives:

a) Both Assertion and Reason are true and Reason (R) is the correct
explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct
explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Ans – d)
Explanation:- No opening and closing balances are recorded in income and expenditure account. The nature of this account is nominal. It only record income and expenses of the current financial year on the accrual basis.

Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives given below:

Assertion (A): The income and expenditure account is prepared on the accrual basis of accounting.

Reason (R): The transactions related to the current year are added and those related to the previous or followed year are to be subtracted.

Alternatives:

a) Both Assertion and Reason are true and Reason (R) is the correct
explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct
explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Ans – a)
Explanation:- Yes, Income and expenditure account is prepared on the accrual basis of accounting. In the accounting only current year income and expenditures are recorded after subtracting previous and future year items and current year outstanding items are added.

Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives given below:

Assertion (A): The balance sheet shows the financial position of the company.

Reason (R): Receipts and payments record cash receipts and cash expenditures.

Alternatives:

a) Both Assertion and Reason are true and Reason (R) is the correct
explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct
explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Ans – b)
Explanation:- Both statements are true. But Assertion doesn not explanin why balance sheet shows the financial position of the company.

Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives given below:

Assertion (A): NGOs are charitable trusts or societies and subscribers to such organizations are called members.

Reason (R): Profits are distributed among its members

Alternatives:

a) Both Assertion and Reason are true and Reason (R) is the correct
explanation of Assertion (A)
b) Both Assertion and Reason are true and Reason (R) is not the correct
explanation of Assertion (A)
c) Assertion (A) is True but Reason (R) is False
d) Assertion (A) is False but Reason (R) is True

Ans – c)
Explanation:- NGOs works for welfare of the societies or its members without any motive of earning profit. No Profit is distributed among the members of the NPO organisations.

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Anurag Pathak

Anurag Pathak is an academic teacher. He has been teaching Accountancy and Economics for CBSE students for the last 18 years. In his guidance, thousands of students have secured good marks in their board exams and legacy is still going on. You can subscribe his youtube channel and can download the Android & ios app for free lectures.

Articles: 2015

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