Important MCQs of NPO Accountancy Class 12 CBSE

Looking for important MCQs of NPO (Not for profit organization chapter with answers of Accountancy class 12 CBSE, ISC, and other State Boards.

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Multiple Choice Questions of NPO with answers of Accountancy class 12

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Receipts and Payments Account generally shows:

a) A Debit balance
b) A credit balance
c) Surplus or Deficit
d) Capital Fund

Ans – a)

Recepts and Payments Account is prepared on

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

Ans – a)

Income and Expenditure Account records transactions of:

a) Revenue nature only
b) Capital nature only
c) Both revenue and capital nature
d) Income of only revenue nature and expenditure of revenue and capital nature

Ans – a)

Not for Profit Organisation prepare

a) Income and Expenditure Account
b) Trading and Profit and Loss Account
c) Trading Account
d) Both a) and c)

Ans – a)

Income and Expenditure Account reveals:

a) Surplus or Deficiency
b) Cash in Hand
c) Net Profit
d) Capital Account

Ans – a)

Which of the following statements is not true for Receipts and Payments Account?

a) It is a summary of the Cash Book
b) It records receipts and payments of revenue nature only.
c) The receipts and Payments may relate to current, preceding, or succeeding accounting periods
d) Depreciation is not shown in it.

Ans – b)

Income and Expenditure Account records:

a) Receipts and Payments of Revenue and Capial nature both.
b) Income and Expenditure of Revenue nature only
c) Expenditure of Capital nature only
d) Receipts and Revenue nature only

Ans – b)

Which of the following statements is not true for Income and Expenditure Account?

a) it records items of revenue nature only
b) items recorded in it relate only to the current period
c) Depreciation is not recorded in this account
d) It doesn not have an opening balance

Ans – c)

Sale of old newspaper for ₹2,000 will be recorded on:

a) Dr. Side of Income and Expenditure A/c
b) Cr. Side of Income and Expenditure A/c
c) Cr. Side of Receipts and Payments A/c
d) None of these

Ans – b)

Basis of preparing Receipts and Payments Account of a non-profit organisaiton is:

a) Cash Basis
b) Accrual Basis
c) Both Cash and Accrual Basis
d) None of these

Ans – a)

The account which shows a classified summary of transactions of a Cash Book in a Nor for
profit organization is called

a) Income and Expenditure Account
b) Receipts and Payments Account
c) Profit and Loss Account
d) Subscriptions Account

Ans – b)

The amount of ‘Subscription received from members’ by a Non Profit organisation is shown in
which of the following?

a) Debit side of Income and Expenditure Account
b) Credit side of Income and Expenditure Account
c) Liability side of Balance Sheet
d) Assets side of Balance Sheet

Ans – b)

Which of the following statements is not true from receipts and payments account?

a) It is a summary of the Cash Book
b) It records receipts and payments of revenue nature only
c) The receipts and payments may relate to current, preceding or succeding accounting periods
d) Depreciation is not shown in it.

Ans – b)

If match expenses are more than match fund, the excess of match expenses over match fund is transferred to:

a) Assets side of Balance Sheet
b) Liabilities side of Balance Sheet
c) Debit side of Income and Expenditure A/c
d) Credit side of Incomea and Expenditure A/c

Ans – c)

Donation received for a special purpose:

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

Ans – b)

Income and Expenditure Account is prepared on

a) Cash Basis
b) Accrual Basis
c) Both a) and b)
d) Sales Basis

Ans – b)

Subscriptions received during 2018-19 was ₹5,00,000 and subscriptons credited to Income and Expenditure Account was ₹5,10,000. Find out the subscription outstanding as at 31st March, 2019 on the basis of the following:

	31.3.2018	31.3.2019
Subscription Received in Advance	7,000	8,000
Subscription Outstanding	20,000	–

a) ₹9,000
b) ₹11,000
c) ₹29,000
d) ₹31,000

Ans – d)

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) Asset
d) Earned Income

Ans – a)

Income and Expenditure Account records:

a) Receipts and Payments of Revenue and Capital nature both
b) Income and Expenditure of Revenue nature only
c) Expenditure of Capital nature only
d) Receipts and Revenue nature only

Ans – b)

The amount of ‘Entrance Fees’ received by a Non Profit organisaitons (if it is received
regularly) is shown in which of the following?

a) Liability side of Balance Sheet
b) Assets side of Balance Sheet
c) Debit side of Income and Expenditure Account
d) Credit Side of Income and Expenditure Account

Ans – d)

The opening balance of the Prize Fund was ₹1,00,000. During the year, donations received towards this fund amounted to ₹15,400; the amount spent on prizes was ₹12,300, and interest received on prize fund investment was ₹4,000. The closing balance of Prize Fund will be:

a) ₹1,23,700
b) ₹1,31,700
c) ₹1,07,100
d) ₹99,100

Ans – c)

Legacy Donation received by NPO to be used for a specific purpose is accounted as

a) Revenue Receipt
b) Capital Receipt
c) an asset
d) is decided by the management

Ans – b)

Out of following items, which one is shown in the Receipts and Payments Account?

a) Outstanding Salary
b) Depreciation
c) Life Membership Fees
d) Accrued Subscription

Ans – c)

Jaipur Club has a prize fund of ₹6,00,000. It incurs expenses on prizes amounting to ₹5,20,000. The expenses should be

a) Debited to income and expenditure account.
b) Presented on the asset side of the balance Sheet.
c) Debited to income and expenditure account and presented on the asset side of the balance Sheet
d) Deducted from the prize fund on the liability side of the balance sheet.

Ans – d)

Life Membership Fee received by NPO is accounted as

a) Revenue Receipt
b) Capital Receipt
c) as Asset
d) Miscellaneous Receipt

Ans – b)

Not for Profit organisations prepare:

a) Trading Account
b) Trading and Profit and Loss Account
c) Income and Expenditure Account
d) All of the above

Ans – c)

On 1st April 2018, Maitreyi Club had a Prize Fund of ₹8,00,000. It incurred expenses on prizes amounting to ₹8,70,000
during the year. The balance of Prize Fund in the Balance Sheet as at 31st March 2019 will be:

a) ₹70,000
b) ₹8,00,000
c) ₹(70,000)
d) Zero

Ans – d)

Jaipur Club has a prize fund of ₹ 6,00,000. It incurs expenses on prizes amounting to ₹5,20,000.
The expenses should be

a) debited to income and expenditure account
b) presented on the assets side of Balance Sheet
c) debited to Income and Expenditure Account and presented on the assets side of the Balance
sheet
d) deducted from the Prize Fund on the liabilities side of the Balance Sheet

Ans – d)

The account which shows classified summary of transactions of a Cash Book in a Not for profit organisation is called:

a) Income and Expenditure Account
b) Receipts and Payments Account
c) Profit and Loss Account
d) Subscriptions Account

Ans – b)

The Receipts and Payments Account is a summary of :

a) Debit and Credit balance of Ledger Accounts
b) Cash Receipts and Payments
c) Expenses and Incomes
d) Assets and Liabilities

Ans – b)

Title of the account which shows Surplus/Deficit of NPO is

a) Cash Book
b) Income and Expenditure Account
c) Receipts and Payments Account
d) Balance Sheet

Ans – b)

Sports Star Charitable club has income of ₹16,000 and ‘deficit’ debited to capital fund of ₹4,300 for the year 2019-20,
then expenditure for the year 2019-20 is:

a) ₹11,700
b) ₹4,300
c) ₹20,300
d) ₹ None of these

Ans – c)

Receipts and Payments account is a:

a) Personal Account
b) Real Account
c) Nominal Account
d) Real and Nominal Account, both

Ans – b)

Identify revenue receipt from the following:

a) Donations for Building
b) Subscription
c) Life Membership Fees
d) Legancy donation for Library

Ans – b)

Income and Expenditure Account is a:

a) Peronsal Account
b) Real Account
c) Nominal Account
d) Real and Nominal Account, both

Ans – c)

General Donation received by NPO is shown in the

a) Credit side of Income and Expenditure Account
b) Debit side of Income and Expenditure Account
c) Liabilities side of Balance Sheet
d) Assets side of the Balance Sheet

Ans – a)

Out of the following , which item is not recorded in Income and Expenditure Account?

a) Sale of Grass
b) Locker’s Rent
c) Interest Received
d) Interest received on Prize fund Investments

Ans – d)

Which of the following is a not for profit organisation?

a) Sports Clubs
b) Schools
c) Hospitals
d) All of the above

Ans – d)

Excess of Match fund over match expenses will be shown on:

a) Dr. side of Income and Expenditure A/c
b) Cre side of Income and Expenditure A/c
c) Liability side of Balance Sheet
d) Assets side of Balance Sheet

Ans – c)

Which of the following is not a capital Receipt?

a) Donations for tournament
b) Donations for building
c) Life Membership fee
d) Entrance Fees

Ans – d)

Which of the following is a capital Receipt?

a) Subscriptions
b) sale of used sports material
c) Endowment Fund
d) Entrance Fees

Ans – c)

Credit Side balance in Income and Expenditure Account reveals:

a) Excess of Cash receipts over payments
b) Excess of cash payments over receipts
c) Excess of expenditure over income
d) Excess of income over expenditure

Ans – d)

Specific Donation received by NPO is shown in the

a) Credit side of Income and Expenditure Account
b) Debit side of Income and Expenditure Account
c) Liabilities side of Balance Sheet
d) As is decided by the Management

Ans – c)

Source of income for a not for profit organisation is:

a) Subscription from Members
b) Donation
c) Entrace Fees
d) All of the above

Ans – d)

Choose NPO from the following:

a) Reliance Industries Limited
b) Indian Hockey Federation
c) Infosys Ltd
d) Private Hospital

Ans – b)

Which of the following represent capital receipt:

a) Life Membership Subscription
b) Donation
c) Subscription
d) Interest on Investment

Ans – a)

Subscription received during the year 2020-21: ₹ 1,50,00. Outstanding Subscription as on
31st March, 2020: ₹ 1,00,000. The amount shown as subscription receipt will be

a) ₹ 50,000
b) ₹ 1,50,000
c) ₹ 1,00,000
d) ₹ 1,25,000

Ans – a)

Which of the following is a revenue receipt for a not for profit organisations.

a) Endowment Fund
b) Government Grants
c) Life Membership Fees
d) Legacies

Ans – b)

Which of the following is not a capital receipt?

a) Donations for tournament
b) Donations for building fund
c) Life Membership Fees
d) Entrance Frees

Ans – d)

Which of the following is not a revenue receipt?

a) Donations for Tournament
b) Government Grants
c) Subscriptions
d) Entrance Fees

Ans – a)

Which of the following is not a revenue receipt?

a) Donations for Tournament
b) Government Grants
c) Subscriptions
d) Entrance Fees

Ans – a)

Which of the following is not a revenue receipt?

a) Admission Fees
b) Government Grants
c) Locker Rent
d) Legacies

Ans – d)

Which of the following is a capital Receipt?

a) Subscriptions
b) Sale of used Sports Material
c) Endowment Fund
d) Entrance Fees

Ans – c)

Amount received from sale of grass by a club should be treated as:

a) Capital Receipt
b) Revenue Receipt
c) Asset
d) Eearned Income

Ans – b)

Out of the following, which is unrestricted Fund?

a) Annuity Fund
b) Sports Fund
c) A liability
d) None of these

Ans – c)

The amount received for sale of old sports materials by a Non profit organisation is shown
in which of the following?

a) Debit side of Income and Expenditure Account
b) Liability side of Balance Sheet
c) Credit side of Income and Expenditure Account
d) Assets side of Balance Sheet

Ans – c)

The opening balance of Prize Fund was ₹32,800. During the year, donations received towards this fund amounted to ₹15,400;
amount spent on prizes was ₹12,300 and interest received on prize fund investment was ₹4,000. The closing balance
of Prize Fund will be:

a) ₹56,500
b) ₹64,500
c) ₹39,900
d) ₹31,900

Ans – c)

Salary paid in cash during the current year was ₹80,000; Outstanding salary at the end was ₹4,000; Salary paid in advance
last year pertaining to the current year was ₹3,200; paid in advance during current year for next year was ₹5,000.
The amount debited to Income and Expenditure Account will be:

a) ₹85,800
b) ₹77,800
c) ₹82,200
d) ₹74,200

Ans – c)

The following information has been extracted from the financial statements of a not for profit organisation for the year ended 31st March, 2019:

Particulars	₹
Opening Balance of Match Fund Sale of Match Tickets Donation for Match Fund received during the year Match Expenses	5,00,000 3,75,000 1,24,000 10,00,000

Which of the following statements is correct for the presentation of the above items in the financial statements of the not-for-profit organisation?

a) Negative balance of Match Fund ₹ 1,000 will be shown on the liabilities side of the Balance Sheet as at 31st March, 2019.

b) Opening balance of Match Fund ₹ 5,00,000 will be shown on the liabilities side of the Balance Sheet as at 1st April, 2018.

c) Negative balance of Match Fund ₹ 1,000 will be shown on the expenditure side of the Income and Expenditure Account for the year ended 31st March 2019.

d) Both b) and c)

Ans – d)

Salary paid in cash during the current year was ₹30,000; Outstanding salary at the end of the previous year was ₹2,000 and outstanding salary at the end of the current year was ₹3,000. Salary paid in advance during the current year for next year was ₹2,600. The amount debited to the Income and Expenditure Account will be:

a) ₹33,600
b) ₹26,400
c) ₹31,600
d) ₹28,400

Ans – d)

If there is a ‘Match Fund’ then match expenses and incomes are transferred to:

a) Income and Expenditure A/c
b) Assets side of Balance Sheet
c) Liabilities side of Balance Sheet
d) Both Income and Expenditure A/c and to Balance Sheet

Ans – c)

Salary paid for the year ended 31st March 2010 amounted to ₹75,000. How much amount will be recorded in the Income and Expenditure Account in the following case?

	31.3.2009	31.3.2010
Outstanding Salary	6,500	6,000
Prepaid Salary	1,200	1,000

a) ₹75,700
b) ₹74,300
c) ₹75,300
d) ₹74,700

Ans – d)

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

a) Accrued Subscription
b) Outstanding Salary
c) Depreciation
d) None of these

Ans – d)

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

a) Subscription received in advance
b) Subscription due
c) Last year subscription received
d) All of the above

Ans – b)

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 year subscription received
c) Current year subscription received
d) All of the above

Ans – d)

There are 500 members, each paying an annual subscription of ₹1,000; subscription received during the year ₹4,95,00;
subscriptions received in advance at the begining of the year ₹10,000. and at the end of the year ₹9,000. Amount
shown in Income and Expenditure will be:

a) ₹5,00,000
b) ₹4,96,000
c) ₹4,94,000
d) ₹5,01,000

Ans – a)

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

a) outstanding Rent
b) Accrued Subscription
c) Excess of Income over Expenditure
d) None of these

Ans – d)

Calculate the amount of credit purchase from the following information:

Particulars	1st April, 2020	31st March, 2021
Creditors for stationery	4,600	11,800

During the year ended 31st March, 2021, payment made to creditors of ₹ 56,800.

a) ₹ 54,000
b) ₹ 64,000
c) ₹ 74,000
d) ₹ 44,000

Ans – b)

How much amount will be shown in Income and Expenditure Account in the following case?

	1.4.2009	31.3.2010
Creditors for Stationery	8,000	6,000
Stock of Stationery	3,000	3,200

During 2009-10 payment made for stationery was ₹60,000.

a) ₹57,800
b) ₹62,200
c) ₹61,800
d) ₹58,200

Ans – a)

How much amount will be shown in the Income and Expenditure Account in the following case?

	31.3.2009	31.3.2010
Unpaid for Medicines	10,000	12,000
Stock of Medicines	8,000	13,000

Payment made for medicines during 2009-10 was ₹2,50,000.

a) ₹2,53,000
b) ₹2,47,000
c) ₹2,57,000
d) ₹2,43,000

Ans – b)

Subscription received in advance during the current year is:

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

Ans – c)

The following information has been extracted from the financial statements of a not for profit organisation for the year ended 31st March, 2019:

Particulars	₹
Opening Balance of Match Fund	5,00,000
Sale of Match tickets	3,75,000
Donation for Match Fund received during the year	1,24,000
Match expenses	10,00,000

Which of the following statements is correct for the presentation of the above items in the financial statements of the not for profit organisation?

a) Negative Balance of Match Fund ₹1,000 will be shown on the liabilities side of Balance Sheet as at 31st March, 2019.
b) Opening Balance of Match Fund ₹5,00,000 will be shown on the liabilities side of Balance Sheet as at 1.4.2018.
c) Negative balance of Match Fund, ₹1,000 will be shown on the expenditure side of the Income and Expenditure Account for the
year ended 31.3.2019.
d) Both B) and C)

Ans – d)

Compute Rent for the year ended 31st March 2021 from the following:

	1.4.2020	31.3.2021
Outstanding Rent	₹ 19,000	₹ 14,000
Prepaid Rent	₹ 5,600	₹ 10,400

Rent paid during the year ₹ 2,97,800.

a) ₹ 2,97,800
b) ₹ 2,88,000
c) ₹ 2,50,000
d) ₹ 2,00,000

Ans – b)

Subscription received in cash during the year amounted to ₹40,000; subscription outstanding
at the end of previous year was ₹1,500 and outstanding at the end of the current year was
₹2,000. Subscription received in advance for next year was ₹800. The amount credited to
Income and Expenditure Account will be:

a) ₹38,700
b) ₹39,700
c) ₹40,300
d) ₹41,300

Ans – b)

Subscription received in cash during the year amounted to ₹5,00,000; subscription outstanding
at the end of previous year was ₹20,000 and outstanding at the end of current year was ₹25,000.
Subscription received in advance for next year was ₹8,000 and received in advance during previous
year was ₹7,000. The amount credited to Income and Expenditure Account willl be:

a) ₹5,04,000
b) ₹5,06,000
c) ₹4,96,000
d) ₹4,94,000

Ans – a)

Subscriptions received in cash during the year amounted to ₹60,000; subscription received in advance
for next year was ₹3,000 and received in advance during previous year was ₹2,000. Subscription
in arrear at the end of current year was ₹5,400. The amount credited to Income and Expenditure
Account will be:

a) ₹53,600
b) ₹66,400
c) ₹55,600
d) ₹64,400

Ans – d)

Subscription received in cash during the year amounted to ₹3,00,000; subscription received in advance for next year was ₹
10,000 and received in advance during previous year was ₹8,000. Subscription in arrear at the end of previous
year was ₹18,000 and subscription in arrear at the end of current year was ₹12,000. The amount credited to Income
and Expenditure Account will be:

a) ₹2,96,000
b) ₹3,04,000
c) ₹2,92,000
d) ₹3,08,000

Ans – b)

What amount will be credited to the Income and Expenditure Account for the year ending 31st March, 2010 on the basis of the following information?

	31.3.2009	31.3.2010
Outstanding Subscription Advance Subscription	10,000 3,000	25,000 2,000

Subscription received during the year 2009-10 were ₹4,00,000.

a) ₹3,84,000
b) ₹4,16,000
c) ₹3,86,000
d) ₹4,14,000

Ans – a)