Available Answers

1. 1.

   MULTIPLE CHOICE QUESTIONS.

   1. Non-trading organisations prepare
      1. Receipts and Payments Account
      2. Income and Expenditure Account
      3. Balance Sheet
      4. All of these
   2. It is a summary of cash transactions. It is prepared to ascertain the cash balance at the end of the accounting year.
      1. Receipts and Payments Account
      2. Income and Expenditure Account
      3. Balance Sheet
      4. None of these
   3. It is a summary of all incomes and expenses of the current accounting year. It is prepared to know the surplus or deficit during the accounting year.
      1. Receipts and Payments Account
      2. Income and Expenditure Account
      3. Balance Sheet
      4. None of these
   4. It is a statement of assets and liabilities. It is prepared to judge the financial position on a particular date.
      1. Receipts and Payments Account
      2. Income and Expenditure Account
      3. Balance Sheet
      4. None of these
   5. In receipt and payment account opening balance of cash in hand, cash at bank and all cash receipts are shown on the _________________ side.
      1. Credit
      2. Debit
      3. Both (A) and (B)
      4. None of these
   6. All cash payments are recorded on the _________________ side of the receipt and payment accounts.
      1. Credit
      2. Debit
      3. Both (A) and (B)
      4. None of these
   7. The primary objective of preparing this Account is to find out the cash position, opening and closing balances of cash in hand and at bank.
      1. Receipts and Payments Account
      2. Income and Expenditure Account
      3. Balance Sheet
      4. None of these
   8. The closing balance of this Account shows surplus or deficit for the year.
      1. Receipts and Payments Account
      2. Income and Expenditure Account
      3. Balance Sheet
      4. None of these
   9. It alerts the management of a non-trading organisation about decline in cash receipts and increase in cash payments.
      1. Receipts and Payments Account
      2. Income and Expenditure Account
      3. Balance Sheet
      4. None of these
   10. Receipt and payment account has the following limitation(s).
       1. It does not reveal surplus or deficit for the year
       2. It does not indicate financial position of the organisation
       3. It does not disclose details of receipts and payment
       4. All of these
   11. This account is equivalent to the Profit and Loss Account of a business concern.
       1. Receipts and Payments Account
       2. Income and Expenditure Account
       3. Balance Sheet
       4. None of these
   12. It serves as the basis for preparing the Balance Sheet of a non-trading organisation.
       1. Receipts and Payments Account
       2. Income and Expenditure Account
       3. Balance Sheet
       4. None of these
   13. The main use(s) of a Balance Sheet for a non-trading organisation is/are
       1. Balance Sheet shows the assets owned by a non-trading organisation.
       2. It reveals the liabilities of the organisation.
       3. It shows the financial position of the organisation.
       4. All of these
   14. It is always prepared on a particular date.
       1. Receipts and Payments Account
       2. Income and Expenditure Account
       3. Balance Sheet
       4. None of these
   15. It is not an account but a statement.
       1. Receipts and Payments Account
       2. Income and Expenditure Account
       3. Balance Sheet
       4. None of these
   16. Its balance at the end shows the cash in hand and at bank (or overdraft) at the end of the year.
       1. Receipts and Payments Account
       2. Income and Expenditure Account
       3. Balance Sheet
       4. None of these
   17. It contains both capital and revenue items.
       1. Receipts and Payments Account
       2. Income and Expenditure Account
       3. Balance Sheet
       4. None of these
   18. It contains only revenue items.
       1. Receipts and Payments Account
       2. Income and Expenditure Account
       3. Balance Sheet
       4. None of these
   19. If the total of _________________ side is greater than the total of _________________ side, it is called 'surplus' or 'excess of income over expenditure'
       1. Debit, credit
       2. Credit, debit
       3. Credit, credit
       4. Debit, debit
   20. On the other hand, if the total of _________________ side is greater than the total of _________________ side, it is known as 'deficit' or 'excess of expenditure over income'.
       1. Debit, credit
       2. Credit, debit
       3. Credit, credit
       4. Debit, debit
   21. _________________ shows the financial position of the organization.
       1. Trial balance
       2. Profit and Loss account
       3. Balance sheet
       4. Income and Expenditure account
   22. Receipt and Payment account is a _________________ account.
       1. Real
       2. Nominal
       3. Personal
       4. Trading
   23. Which of the following is not a feature of Balance Sheet?
       1. It is statement
       2. Reflects profit / loss of an organization
       3. It shows Capital Fund of the organization
       4. It shows financial position of the organization
2. 2.

   What are fictitious assets? Give one example.

3. 3.

   Give one difference between the Profit and Loss Account and the Balance Sheet.

4. 4.

   All membership fees collected by a non-trading concern must be entered in the assets side of the balance sheet. Justify for or against.

5. 5.

   What are contingent liabilities?

6. 6.

   Give one difference between fixed assets and current assets.