Class 12 Accountancy Chapter 1 Accounting For Not For Profit Organisation MCQ

MCQ of Accountancy Class 12 Chapter 1 is one of the best strategies to prepare for the CBSE Class 12 Board exam. If you want to complete a grasp concept or work on one’s score, there is no method except constant practice. Students can improve their speed and accuracy by doing more Accountancy Class 12 Chapter 1 MCQ, which will help them all through their board test.

MCQ of Accountancy Class 12 Chapter 1 Accounting For Not For Profit Organisation with Answers

Class 12 Accountancy MCQ with answers are given here to chapter the Accounting For Not For Profit Organisation. These MCQs are based on the latest CBSE board syllabus and relate to the latest Class 12 Accountancy syllabus. By Solving these Class 12 MCQs, you will be able to analyze all of the concepts quickly in the chapter and get ready for the Class 12 Annual exam.

Learn Accountancy Class 12 Chapter 1 MCQ with answers pdf free download according to the latest CBSE and NCERT syllabus. Students should prepare for the examination by solving CBSE MCQ of Accountancy Class 12 Chapter 1 with answers given below

Question 1. An example of cash flow from investing activity is :
(a) Issue of debenture
(b) Repayment of long-term loan
(c) Purchase of raw materials for cash
(d) Sale of investment by non-financial enterprise.

Question 2. GSC Ltd. purchased machinery of Rs. 10,00,000 issuing a cheque of Rs. 2,50,000 and 10% Debentures of Rs. 7,50,000. ln the Cash Flow Statement, the transaction will be shown as
(a) Outflow under Investing Activity Rs. 10,00,000, inflow under Financing Activity as Receipt for Debentures Rs. 7,50,000.
(b) Outflow under investing Activity Rs. 2,50,000.
(c) Inflow of Rs. 7,50,000 as Financing Activity.
(d) None of the above.

Question 3: Under Cash Flow from Operating Activities incorporates are
( a) All of the options
(b) Cash received from customers
(c) Paid to suppliers
(d) Paid for operating costs

Question 4. Interest paid by an investment company will come under which kind of activity while preparing cash flow statement?
(a) Cash Flow from Operating Activities
(b) Cash Flow from Investing Activities
(c) Cash Flow from Financing Activities
(d) No Cash Flow

Question 5: Limitations of Cash Flow Statementv are
(a) All of the options
(b) Cash flow statement does not consider non-cash item
(c) Cash flow statement cannot replace fund flow statement or income statement
(d) It cannot be used for the purpose of comparison over a period of time

Question 6: Which of the following is not a source of finance
(a) Fixed Assets
(b) Debentures
(c) Bank Overdraft
(d) Bank Loan

Question 7: Cash Credit is concerned with __
(a) Financing Activities
(b) Investing Activities
(c) Operating Activities
(d) Cash and Cash Equivalents

Question 8: For the calculation of cash flow from operating activities, payments and receipts shown in Profit & Loss account are converted into payments and receipts actually in cash by eliminating
(a) Non-cash revenue from the revenue earned and Non-cash expenses from expenses incurred
(b) Non-cash revenue from the revenue earned
(c) Non-cash expenses from expenses incurred
(d) None of the options

Question 9: While preparing Cash Flow Statement, non-cash items and non-operating items are not required to be adjusted under________
(a) Direct method
(b) Indirect method
(c) Average method
(d) All of the options

Question 10: Principal revenue generating activities of an enterprise are called as
(a) Operating activities
(b) Financing activities
(c) Investing activities
d) All of the options

Question 11. Which of the following is not a revenue receipt?
(a) Donations for Tournament  
(b) Government Grants 
(c) Subscriptions  
(d) Entrance Fees 

Question 12.An example of Cash Flows from Financing Activity is :
(a) Credit Revenue from Operations
(b) Cash receipts from issue of shares
(c) Sale of Investments
(d) Interest Received

Question 13. Which of the following is an example of not-profit-organisation:
(a) Public hospitals 
(b) Corporations 
(c) Audit firm 
(d) Insurance companies

Question 14. Subscription received in advance during the current year is
(a) an income.
(b) an asset.
(c) a liability.
(d) None of these.

Question 15.Receipts and Payments Account is a
(a) Real Account.
(b) Nominal Account.
(c) Personal Account.
(d) Revenue Account

Question 16. Capital fUnd is calculated:
(a) Income-Expenditure
(b) Assets Liabilities
(c) Capital + Liabilities
(d) None of these

Question 17. Which of the following is directly added to the capital fund on the liabilities side of the Balance Sheet?
(a) Life membership fees 
(b) Legacies 
(c) Entrance Fees  
(d) All of these

Question 18. 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 outstanding 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 previous year was Rs.7,000. The amount credited to Income & Expenditure Account will be :
(a) Rs.5,04,000
(b) Rs.5,06,000
(c) Rs.4,96,000
(d) Rs.4,94,000

Question 19. The excess of assets over liabilities in non-trading concerns is termed as:
(a) Capital Fund
(b) Capital
(c) Profit
(d) Net Profit

Question 20. In the receipts and payments account the receipts from subscriptions would appear at ____________.
(a) Rs. 700
(b) Rs. 800
(c) Rs. 900
(d) Rs. 1,000

Question 21. Which of the following is not a not-for-profit organisation?
(a) College
(b) Sports Club
(c) SBI Bank
(d) Hospital

Question 22. If a General Donation of huge amount is received by a school, that donation is treated as :
(a) Revenue Receipt (Income)
(b) Capital Receipt (Liability)
(c) Assets
(d) Earned Income

Question 23. If Salaries debited to Income & Expenditure account is ₹54,000 after adjusting prepaid salaries at the beginning of the year ₹2,000, outstanding salaries of previous year ₹6,000 and outstanding salaries of current year ₹9,000, then Salaries paid during the current year will be:
(a) ₹59,000
(b) ₹63,000
(c) ₹49,000
(d) ₹37,000

Question 24. Identify the best definition of planning.
(a) A process in which plans are formulated, carried out and controlled
(b) The core activity of planners and planning departments
(c) Devising ways of achieving objectives
(d) Setting an organization’s objectives and means of reaching them.

Question 25. Endowment Fund should be treated as:
(a) A Liability
(b) A Revenue Receipts
(c) An Income
(d) None of these

Question 26. A non-profit organization received ₹10,000 as the entrance fee of a new member. If 20% of the fee has to be capitalised, what is the amount of fee needs to be shown in the income and expenditure account?
(a) ₹9000
(b) ₹8000
(c) ₹2000
(d) ₹5000

Question 27: 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

Question 28. Amount received from the sale of old furniture by a club is treated as:
(a) Revenue Receipt
(b) Capital Receipt
(c) Asset
(d) liability 

Question 29. 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 

Question 30: 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

Question 31: Income & Expenditure Account is based on
(a) Cash Accounting
(b) Accrual Accounting
(c) Government Accounting
(d) Management Accounting

Whoever needs to take the CBSE Class 12 Board Exam should look at this MCQ. To the Students who will show up in CBSE Class 12 Accountancy Board Exams, It is suggested to practice more and more questions. Aside from the sample paper you more likely had solved. These MCQ Questions for Class 12 Accountancy Chapter 1 are ready by the subject specialists themselves.

Question 32: Subscription received but not yet earned is considered as
(a) Asset
(b) Liability
(c) Income
(d) Expenditure

Question 33: Which of the following is regarded as apt to show purchase of fixed asset for a nonprofit organisation
(a) Income & Expenditure Account
(b) Profit & Loss Account
(c) Balance Sheet
(d) None of the above

Question 34: 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 

Question 35: 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 is credited in income statement.
(d) Profit or loss is added to accumulated fund

Question 36: 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

Question 37: Deficit balance can be shown in balance Sheet as:
(a) Liability
(b) Assets
(c) Owner’s equity
(d) None of the above

Question 38: 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

Question 39: 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

Question 40: The opening balance of the Prize fund of a sports club was Rs.6,400. Further donationstowards this fund received during the accounting year amounted to Rs.4,300. During theyear, Rs. 3,500 was spent on prizes and Rs. 400 was received as interest on investment ofthe 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

Question 41: At the beginning of an accounting year a club has assets of Rs. 19,000 and liabilities ofRs.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 

Question 42: 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

Question 43: Amount received from the sale of old furniture by a club is treated as:
(a) Revenue Receipt
(b) Capital Receipt
(c) Asset
(d) liability

Question 44 :The control of non trading concern rest in the hand of
(a) Directors
(b) managing Agents
(c) Governing body
(d) Promoters

Question 45: 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 tothe 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

Question 46: Receipt and Payment account includes
(a) Revenue items
(b) Cash items
(c) Revenue & Cash items
(d) None of the above

Question 47 : Receipt & Payment Account shows
(a) A debit balance
(b) A credit balance
(c) Surplus or deficit
(d) Capital fund

Question 48: 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

Question 49: Second hand furniture worth Rs. 6,000 was purchased It was repaired for Rs.600 andinstalled by workmen to whom Rs. 200 was paid as wages. The furniture should becapitalised for
(a) Rs.6,200
(b) Rs.6,800
(c) Rs. 6,600
(d) Rs. 6,000

Question 50: Fixed assets fund is
(a) Endowment Fund
(b) Current restricted Fund
(c) Current unrestricted fund
(d) Meant for accounting of asses and depreciation

Question 51. Fixed assets fund is
(a) Endowment Fund
(b) Current restricted Fund
(c) Current unrestricted fund
(d) Meant for accounting of asses and depreciation

Question 52: Subscription received in advance during the accounting year is
(a) an income
(b) an expense
(c) Asset
(d) Liability

Question 53. 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

Question 54. 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 

Question 55. 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

Question 56. Receipt & Payment Account shows
(a) A debit balance
(b) A credit balance
(c) Surplus or deficit
(d) Capital fund

Question 57. Receipt and Payment account includes
(a) Revenue items
(b) Cash items
(c) Revenue & Cash items
(d) None of the above 

Question 58. Subscription received but not yet earned is considered as
(a) Asset
(b) Liability
(c) Income
(d) Expenditure

Question 59. Subscription received in advance during the accounting year is
(a) an income
(b) an expense
(c) Asset
(d) Liability

Question 60. 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

Question 61. 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 

Question 62. 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 

Fill in the blanks:

1.Endowment Fund is ——.,—-Fund.

Question 2. restricted fund can be used for —-, —-purpose

Question 3. ——————— ——- represents the excess of assets over liabilities.-

Question 4.General Fund can be transferred to — — Fund

Question 5: When Expenditure is paid out of current/ restricted fund, cash/bank account is creditedand —————————-is debite  .Restricted fund

Question: restricted fund can be used for ————————-purpose.  

Question 6. Fund based accounting is used by —-,———-organisations. 

Question 7: Endowment Fund is —————————Fun. 

Question 8: Fund based accounting is used by —————————————organisations.   

Question 9: General Fund can be transferred to ————————— Fund. 

Question 10. When Expenditure is paid out of current/ restricted fund, cash/bank account is credited and ——–. ——————–is debited.

Question 11: —————————– represents the excess of assets over liabilities. 

True or False

State whether the following statements are True or False

Question 1: In the income and Expenditure Account, all incomes received during the year irrespectiveof the year for which they are received, are to be recorde  

Question 2: Charitable institutions prepare income and expenditure account at the end of everyfinancial year.

Question 3: There is no difference between the nature of Receipt & Payment Account and Income &Expenditure account. False 

Question 4: All receipts are the items of revenue nature.

Question 5: Not for profit concerns concentrate their efforts on maximising the profits.

Question 6. All receipts are the items of revenue nature.

Question 7  Income & expenditure account do not have opening balance.  

Question 8. There is no difference between the nature of Receipt & Payment Account and Income & Expenditure account.

Question 9. Income & expenditure account do not have opening balance.

Question 10. Charitable institutions prepare income and expenditure account at the end of every financial year.

Question 11. Not for profit concerns concentrate their efforts on maximising the profits.

Question 12 . In the income and Expenditure Account, all incomes received during the year irrespective of the year for which they are received, are to be recorded.

1 In the absence of Partnership Deed , Interest on loan of a partner is allowed	( a) 8% per annum
2 In the absence of Partnership Deed Interest on Drawing of a partner is charged	( B) 9 % per annum
	( C) 6% per annum
	( d) No Interest is charged

1 A and B are Partners. The net divisible profit as per Profit & Loss Appropriation account is Rs 2,50,000 . The total interest on partner’s Drawing is Rs 4,000 . A’ salary Rs 4,000 per quarter and B’ salary is Rs 40,000 per annum. What will net profit or loss earned during the year .	(a) Rs 2,50,000
2 A and B are Partners . The net divisible profit as per Profit & Loss Appropriation account is Rs 2,50,000 . The total interest on partner’s Drawing is Rs 4,000 . A’ salary Rs 4,000 per quarter and B’ salary is Rs 40,000 per annum. What will be A’ s share of profit .	(b) Rs 1,25,000
	(c) Rs 3,02,000
	(d) Rs 3,06,000

1 A entitled to a salary of Rs 10,000 per annum and commission of 10 % 0f the Net profit after charging his salary but before charging his commission . The Net profit Rs 2,30,000. What will be the amount of A’ s Commission.	(a) Rs 23,000
2 B entitled to commission of 10 % on net profit after charging his commission . The Net profit Rs 2,20,000 .what will be the amount of B’ s Commission .	(b) Rs 22,000
	(c) Rs 20,000
	(d) Rs 25,000

1 A Drawings Rs 50,000 during the year .The rate of Interest on Drawing is 10% per annum . what will be amount of interest on drawing :	( a) Rs 5,000
2 A drawing Rs 50,000 during the year . The rate of Interest on Drawing 10 % . What will be amount of interest on drawing	( b)Rs 2,500
	( c) Rs 10,000
	( d) Rs 15,000

1 Ratio in which Partners share profit & losses before reconstitution of firm	(a) New profit sharing ratio
2 Ratio in which Partners surrenders their share of profit in favour of other partner’s	(b) Gaining Ratio
3 Ratio in which all the Partners share the future profit and losses	(c) Sacrificing Ratio
4 Ratio in which Partners acquire the share from other	(d) Old Ratio

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