Course:
CMA Foundation
1) The Receipt and Payment account of a Non- Profit Organisation is a:
(a) Nominal Account (b) Real Account
(c) Income Statement Account (d) Financial Statements
2) In regard to Rent expenses paid in advance of a non- profit organisation which of the following
classification is correct:
(a) Expense (b) Liability
(c) Equity (d) Assets
3) Income & Expenditure Account is based on:
(a) Cash Accounting (b) Accrual Accounting
(c) Government Accounting (d) Management Accounting
4) Which of the following is regarded as apt to show purchase of fixed asset for a non-profit
organisation:
(a) Income & Expenditure Account (b) Profit & Loss Account
(c) Balance Sheet (d) None of the above
5) Which of the following is to be recorded in an income and Expenditure Account:
(a) Purchase of a fixed Asset
(b) Capital Expenditure incurred on a fixed asset
(c) Profit on the sale of a fixed asset
(d) Sale of a fixed asset
6) 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 Balance Sheet
(b) Profit or loss is to be presented in income and expenditure account
(c) Profit and loss are credited in income statement
(d) Profit or loss is added to accumulated fund
7) Which of the following is the accounting equation for a non-profit organisation?
(a) Asset= Capital + Liabilities
(b) Capital+ Liabilities= Assets
(c) Accumulated Fund+ Liabilities= Assets
(d) Liabilities= Assets + Accumulated Fund
8) Subscription received but not yet earned is considered as:
(a) Asset (b) Liability
(c) Income (d) Expenditure
9) On what basis receipts and payments account is made:
(a) Cash basis (b) Accrual basis
(c) Both Cash & Accrual basis (d) None of the above
10) Surplus or profits of Non-Profit Organisations are ______
(a) It is not distributed among members
(b) Maybe or may not be distributed among members
(c) It is debited to the general fund
(d) Distributed among members.
11) If debit side of receipt and payment account exceeds the credit side, it represents:
(a) Deficit Balance (b) Surplus Balance
(c) Cash at Bank (d) Bank Overdraft
12) Deficit balance can be shown in balance Sheet as:
(a) Liability (b) Assets
(c) Owner’s equity (d) None of the above
13) Receipt and Payment account includes:
(a) Revenue items (b) Cash items
(c) Revenue & Cash items (d) None of the above
14) Which should be considered as capital receipt of a club:
(a) Donation (b) Sale of newspaper
(c) Sale of bar items (d) Sale of furniture
15) At the beginning of an accounting year a club has assets of Rs. 19,000 and liabilities of Rs.5,000.
Rs. 1,800 is the debit balance of the income & expenditures account. The opening capital fund is:
(a) Rs. 18,000 (b) Rs.11,200
(c) Rs.15,800 (d) Rs. 24,800
16) The opening balance of the Prize fund of a sports club was Rs.6,400. Further donations towards
this fund received during the accounting year amounted to Rs.4,300. During the year, Rs. 3,500
was spent on prizes and Rs. 400 was received as interest on investment of the Prize Fund. The
closing balance of the Prize fund is:
(a) Rs. 1,900 (b) Rs.10,200
(c) Rs.10,600 (d) Rs.7,600
17) Salaries payable for the current year amount to Rs. 8,500 at the end of the year. Outstanding
salaries amounted to Rs. 300. Salaries paid in advance last year pertaining to the current year
amounted to Rs.500. Prepaid salaries for the next year amount to Rs.250. Total amount paid for
salaries during the year is:
(a) Rs. 7,550 (b) Rs.7,500
(c) Rs.7,950 (d) Rs.6,500
18) Second hand 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 furniture should be capitalised for:
(a) Rs. 6,200 (b) Rs. 6,800
(c) Rs. 6,600 (d) Rs.6,000
19) Fixed assets fund is:
(a) Endowment Fund (b) Current restricted Fund
(c) Current unrestricted fund (d) Meant for accounting of asses and depreciation
20) Donations received for special purpose should be:
(a) Credited to a separate fund account and shown in the Balance Sheet
(b) Treated as revenue
(c) Treated as revenue unless the amount is large
(d) Not recorded at all
21) Amount received from the sale of old furniture by a club is treated as:
(a) Revenue Receipt (b) Capital Receipt
(c) Asset (d) Liability
22) Receipt & Payment A/c shows:
(a) A debit balance (b) A credit balance
(c) Surplus or deficit (d) Capital Fund
23) Subscription received in advance during the accounting year is:
(a) An income (b) An expense
(c) Asset (d) Liability
24) If Rs. 1,500 was outstanding at the beginning of the year towards subscription and Rs. 10,000 is
received during the year, with Rs. 2,500 still outstanding at the end of the year the amount to
be taken to receipts and payments account is:
(a) Rs. 11,000 (b) Rs. 8,500
(c) Rs. 10,000 (d) None of the above
25) The receipts and payments account shows the following details:
Subscription Arrears Rs. 500 Current Rs. 10,500 Advance Rs. 800.
There are 1,200 members each paying an annual subscription of Rs. 10. The amount to be credited
to income and expenditure account will be:
(a) Rs. 11,800 (b) Rs. 11,300
(c) Rs. 12,000 (d) None of the above
26) The opening balance of Prize fund is Rs. 32,800. During the year, donations received towards the
fund amounted Rs. 15,400; amount spent on prizes was Rs. 12,300 and interest received on prize
fund investment was Rs. 4,000. The closing balance of prize fund will be:
(a) Rs. 56,500 (b) Rs. 64,500
(c) Rs. 39,900 (d) Rs. 31,900
27) Sale of grass by a sports club is to be treated as sale of an asset.
(a) True (b) False
28) Subscriptions outstanding for the current year are disclosed under the Fixed assets side of the
Balance sheet.
(a) True (b) False
29) Receipts and payments account gives the details about the expenses outstanding for the year.
(a) True (b) False
30) Tournament expenses incurred are more than the Tournament fund, then the excess to be shown
as an asset in the closing Balance sheet.
(a) True (b) False
31) Tournament fund, building fund, library fund is based on the fund-based accounting.
(a) True (b) False
32) Subscription fees refers to the one-time fees paid by the members to get admission for the
benefits of the club.
(a) True (b) False
33) Token payment made to a person, who voluntarily undertakes a service which would normally be
paid in case of profitable organization is termed as Honorarium.
(a) True (b) False
34) An insurance company is an example of non-profit organization.
(a) True (b) False
35) Both the income and expenditure of the current and the previous year are recorded in the Income
and Expenditure account.
(a) True (b) False
36) Amount received as donation by a Non-profit organisation under the will of a deceased person is
termed as legacy.
(a) True (b) False
37) Where a Non-profit organisation has a separate trading activity, the profit/loss from the trading
account shall be transferred to Income and Expenditure Account at the time of consolidation.
(a) True (b) False
38) Not for profit concerns concentrate their efforts to maximize the profit earning avenues.
(a) True (b) False
39) All the receipts are of revenue nature in case of Non-profit organisation.
(a) True (b) False
40) There is opening balance of Income and expenditure account.
(a) True (b) False
41) Income & Expenditure A/c shows subscriptions at Rs. 10,000. Subscriptions accrued at the
beginning of the year and at the end were Rs. 1,000 and Rs. 1,500 respectively. The figure of
subscriptions appearing in the receipts and payment A/c will be:
(a) Rs. 9,500 (b) Rs. 11,000
(c) Rs. 10,000 (d) None of the above
42) If income is Rs. 16,000 and deficit debited to Capital fund is Rs. 4,300 then expenditure is:
(a) Rs. 16,000 (b) Rs. 4,300
(c) Rs. 20,300 (d) Rs. 12,300
43) Subscription received in cash during the year amounted to Rs. 5,00,000. Subscription outstanding
at the end of previous year was Rs. 20,000 and at the end of current year was Rs. 25,000.
Subscription received in advance for next year was Rs. 8,000 and received in advance during the
previous year was Rs. 7,000. The amount credited to Income & Expenditure A/c will be:
(a) Rs. 5,04,000 (b) Rs. 5,06,000
(c) Rs. 4,96,000 (d) Rs. 4,94,000
44) Salaries payable for current year amount to Rs. 8,500 at the end of the year. Outstanding salaries
amounted to Rs. 300. Salaries paid in advance pertaining to current year amounted to Rs. 500.
Prepaid salaries for next year amounted to Rs. 250. Total amount paid for salaries during the year
is:
(a) Rs. 7,550 (b) Rs. 7,500
(c) Rs. 7,950 (d) Rs. 6,500
45) Salaries paid during the year ended 31 March 2020 is Rs. 36,000. Salaries paid in advance at the
end of previous year was Rs. 54,000. The amount of salaries to be debited to Income & Expenditure
A/c for the year ended 31 March 2020 will be:
(a) Rs. 54,000 (b) Rs. 36,000
(c) Rs. 90,000 (d) Rs. 18,000
46) The goodwill or reputation earned by NPO depends on the basis of_____.
(a) Investments Made (b) Subscriptions Received
(c) Contribution to welfare of society (d) Donations received
47) Instead of maintaining capital A/c, a non-profit organisation prepares _____.
(a) Capital fund or general fund (b) General reserve
(c) Member’s capital A/c (d) Both (a) and (b)
48) A not-profit-organization has all the following characteristics, except that it will
(a) Operate for purposes other than to provide goods/services at a profit.
(b) Has a positive fund balance
(c) Not possesses ownership interests like a corporation
(d) Receives significant contributions from providers who do not except returns
49) Which Of the Following is Incorrect?
(a) Receipt and Payment Account is the summary of cash and bank transactions
(b) Receipts and payment account does not show that any non-cash item like depreciation
(c) Sale of Scrap is a Capital Expenditure and to be recorded In Income and expenditure account
(d) Capital fund is calculated as Assets-Liabilities
50) In the Income and Expenditure, A/c, all revenue expenses are entered on the_____.
(a) Left hand side (b) Liability side
(c) Right hand side (d) Asset side
ANSWERS:
1) (b)
2) (d)
3) (b)
4) (c)
5) (c)
6) (b)
7) (c)
8) (b)
9) (a)
10) (a)
11) (c)
12) (b)
13) (c)
14) (d)
15) (c)
16) (d)
17) (c)
18) (b)
19) (d)
20) (a)
21) (b)
22) (a)
23) (d)
24) (a)
25) (c)
26) (c)
27) (b)
28) (b)
29) (b)
30) (b)
31) (a)
32) (b)
33) (a)
34) (b)
35) (b)
36) (a)
37) (a)
38) (b)
39) (b)
40) (b)
41) (a)
42) (c)
43) (a)
44) (c)
45) (c)
46) (c)
47) (a)
48) (b)
49) (c)
50) (a)