FS of Non profit Organisation - Test Papers

 CBSE Test Paper 01

FS of Non-profit Organisation
  1. 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?
    1. Profit and loss is credit in income statement
    2. Profit and loss to be presented in Receipt and payment account
    3. Profit and loss is added to capital fund.
    4. Profit and loss to be transferred as income and expenditure A/c.
  2. Calculate the sports material to be debited to Income & Expenditure a/c. For the yr. ended 31-3-2007 on the basis of the following information. Amount paid for sports material during the yr. was Rs.19, 000
    Particulars1=4=2006 (Rs.)31.3.2007 (Rs.)
    Stock of sports material7,5006,400
    Creditors for sports material2,002,600
    1. Rs.20300
    2. Rs.20700
    3. Rs.20000
    4. Rs.20500
  3. A non-profit organization received Rs.10,000 as the entrance fee of a new member. If 20% of the fee has to be capitalized, what is the amount of fee needs to be shown in the income and expenditure account?
    1. Rs.9000
    2. Rs.8000
    3. Rs.2000
    4. Rs.5000
  4. Prize fund Rs.10000, Interest on prize fund investments Rs.1000, Prize paid Rs.2000, Prize fund investment Rs.8000.What will be its treatment
    1. Rs.20000 on liability side,Rs. 8000 on Assets side
    2. Rs.1000 on liability side,Rs. 8000 on Assets side
    3. Rs.1700 on liability side,Rs. 8000 on Assets side
    4. Rs.9000 on liability side, Rs. 8000 on Assets side
  5. Belle, a nongovernmental not-for-profit organization, received funds during its annual campaign that were specifically pledged by the donor to another nongovernmental not-for-profit health organization. How should Belle record these funds?
    1. Increase in assets and increase in revenue
    2. Increase in assets and increase in liabilities
    3. Increase in assets and increase in deferred revenue.
    4. Decrease in assets and decrease in fund balance.
  6. Not-for-profit organisations have some distinguishing features from that of profit organisations. State any one of them.

  7. What is the capital of a Non-Profit Organization generally known as?

  8. Name any two accounts required to be prepared in Financial Statements by Not-For-Profit Organizations at the end of the year.

  9. State the main aim of a not-for-profit organisation.

  10. Write any four features of Receipt and Payment Account?

  11. Calculate the amount of stationery to be posted to Income and Expenditure Account of Indian Cultural Society for the year ending 31st March, 2018 from the following information :

    Particulars1.4.2017 (Rs.)31.3.2018 (Rs.)
    Stock of stationery21,00018,000
    Creditors for stationery11,00023,000

    Stationery purchased during the year ended 31st March 2018 was Rs.75,000. Also, present the relevant items in the Balance Sheet of the society as at 31st March 2018.

  12. From the following information, calculate the amount of subscriptions to be credited to the income and expenditure account for the year 2007—08.

     Amt (Rs.)
    Subscriptions received during the year50,000
    Subscriptions outstanding on 31st March, 200720,000
    Subscriptions outstanding on 31st March, 20086,000
    Subscriptions received in advance on 31st March, 20078,000
    Subscriptions received in advance on 31st March, 2008 Subscriptions of Rs. 1,500 are still in arrears for the year 2006-07.9,000
  13. Find out the cost of medicines consumed during 2015-16 from the following information

    ParticularsAmt (Rs)
    Payment for purchase of medicines3,70,000
    Creditors for medicines purchased 
    On 1st April, 201525,000
    On 31st March, 201617,000
    Stock of medicines 
    On 1st April, 201562,000
    On 31st March, 201654,000
    Advance suppliers of medicines 
    On 1st April, 201511,500
    On 31st March, 201618,200
  14. From the following Reciepts and Payments Accounts of Cricket Club and the additional information given, prepare the Income and Expenditure Account for the Year ending 31-12-2018 and Balance sheet as on that date:

    for the year ending 31-12-2018

    To bal. b/dRs. Rs.
    -Cash3520By Maintenance6820
    -Bank27380By Crockery Purchased2650
    -Fixed Deposit @ 6%30000By Match Expenses13240
    To Subscription (including Rs. 6000 for 2017)40000By Salaries11000
    TO Entrance fees2750By Conveyance820
    To Donation5010By Upkeep of Lawns4240
    To Interest on Fixed Deposits900By postage stamps1050
    To Tournament Fund20000By Purchase Of cricket goods9720
    To Sale of Crockery(book value Rs. 1200)2000By Sundry expenses2000
      By Investments5700
      By Tournament Expenses18800
      By balance c/d: 
      Fixed Deposits30000
     131560 131560

    Additional Information:

    1. Salary outstanding is Rs. 1000.
    2. Opening Balance of Stock of Postage and Stationery and Cricket gods is Rs. 750 and Rs. 3210 respectively. Closing stock of the same is Rs. 900 and Rs. 2800 respectively.
    3. Outstanding subscription for 2017 and 2018 is Rs. 6600 and Rs. 8000 respectively.
  15. Receipt and Payment Account of Shankar Sports club is given below, for the year ended March 31, 2017

    Receipt and Payment Account
    for the year ending March 31, 2017
    ReceiptsAmount RsPaymentsAmount Rs
    Opening Cash in hand2,600Rent18,000
    Entrance fees3,200Wages7,000
    Donation for building23,000Billiard table14,000
    Locker rent1,200Furniture10,000
    Life membership fee7,000Interest2,000
    Profit from entertainment3,000Postage1,000
     ......Cash in hand4,000
     80,000 80,000

    Prepare Income and Expenditure Account and Balance Sheet with help of following Information:

    Subscription outstanding on March 31, 2016 is Rs 1, 200 and Rs 2,300 on March 31, 2017, opening stock of postage stamps is Rs 300 and closing stock is Rs 200, Rent Rs 1,500 related to 2015 and Rs 1,500 is still unpaid.

    On April 01, 2016 the club owned furniture Rs 15,000, Furniture valued at Rs 22,500

    On March 31, 2016. The club took a loan of Rs 20,000 (@ 10% p.a.)

CBSE Test Paper 01
FS of Non-profit Organisation


    1. Profit and loss to be transferred as income and expenditure A/c.
      Explanation: Any NPO if have its seprate trading activity then they need to know activity wise profit and loss which is to then transferred to income and expenditure account of that NPO to make consolidated Accounts. Hence, profit/loss of Trading activity of club is to be presented in income and expenditure A/c.
    1. Rs.20700, Explanation: Amount to be debited to income and expenditure as Sports material consumption= Amount paid + Opening Stock -closing stock - opening creditors + Closing creditors. Amount to be debited to income and expenditure= 19000+7500-6400-2000+2600= Rs. 20,700
    1. Rs.8000, Explanation: These are the fees collected from every member at the time of his admission into membership. It is paid only once by the new entrants on becoming a member of a society or a club. It is treated in two ways:- -if It is to be capitalized then it will be shown in to Balance sheet on the liability side. -If it is to be consider as revenue receipt then show it into income and expenditure account on the income side. Hence, Rs. 20% which means Rs. 2000 (10,000*20%) will be shown on the liability side of balance sheet and balance of Rs. 8000 is to be shown in income expenditure account on income side.
    1. Rs.9000 on liability side, Rs. 8000 on Assets side
      Explanation: Calculation of balance sheet will be like this:- Prize fund - 9000 Add:- Interest on prize fund investment 1000 Less:- Prize paid 2000 Amount on Liability side = Rs. 9000 Prize fund investment Rs. 8000 will be shown on asset side.
    1. Increase in assets and increase in liabilities
      Explanation: Belle, a non-governmental NPO when receive Funds for its annual campaign, it will be a liability for them which will be recorded in balance sheet. And if Organisation pledge this fund to another non governmental NPO , it will be an assets for Belle Non govt. oranisation which is to be recorded on the assets side of balance sheet.
  1. Such organisations are not required to pay income tax on net income.
  2. Capital of Not Profit Organization is shown in the Balance Sheet by the name of Accumulated Fund or Capital Fund.
  3. Financial Accounts of Not-for-profit Organizations consists of :
    1. Income and Expenditure Account ;
    2. Balance Sheet.
  4. The main aim of a Not-for-profit organization is to provide service to the public at large. Like agriculture, education, food, health etc.
  5. The main features of Income and Expenditure Account are :
    1. It is prepared for an accounting period on the accrual concept following the matching principle. All expenses related to accounting year whether paid or not are recorded.
    2. Only revenue items are considered, while the capital item is excluded.
    3. All items both cash and non cash (depreciation) are recorded.
    4. Expenditure is recorded on the debit side and incomes on the credit side and ends with Surplus or Deficit as the case may be(difference between revenue and expenditure).
  6. Stationery Account

    Dr.  Cr.
    To Balance b/d21,000By Income & Expenditure A/c78,000
    To Bank75,000(Balancing figure) 
      By Balance c/d18,000
     96,000 96,000

    Balance sheet
    as on 31.03.2018

    Creditors for stationery23,000Stationery's Stock18,000
  7. ParticularsAmount (Rs.)
    Subscriptions received during the year50,000
    (+) Subscriptions Outstanding for 31st March, 2008 (6,000 - 1,500)4,500
    (+) Subscriptions Received in advance an 31st March, 20078,000
    (-) Subscriptions Received in advance on 31st March, 2008(9,000)
    (-) Subscriptions Outstanding on 31st March, 2007 (20,000 - 1,500)(18,500)
    = Income from subscriptions for the year 2007-0835,000
  8. ParticularsAmt (Rs)
    Payment for purchases of medicine3,70,000
    (-) Decrease in Creditors for medicines during the year 2016 (25,000 - 17,000)(8,000)
    (-) Increase in Advance for medicines during the year 2016 (18,200 - 11,500)(6,700)
    Purchases of medicine during the Year 20163,55,300
    (+) Opening stock of medicines on 1st April, 201562,000
    (-) Closing stock of medicine on 31st March, 2016(54,000)
    = Medicine consumed during the year 20163,63,000
  9. Cricket Club Income and Expenditure account
    for the year ended 31-12-2018

    To Maintenance6820By Subscription40000 
    To Conveyance820Less: Rec. for last year6000 
    To Upkeep of Lawns4240Add: outstanding for current year800042000
    To Match Expenses13240By Entrance Fees2750
    To Salaries11000 By Donations5010
    Add: Outstanding100012000By Interest on Fixed Deposits900 
    To postage Stamps: Add:Outstanding9001800
    opening balance750 By Profit on Sale of Crockery (2000-1200)800
    Add: Purchases1050   
    Less: Closing Stock(900)900  
    To Cricket Goods:   
    opening balance3210   
    Add: Purchases9720   
    Less: Closing Stock(2800)10130  
    To sundry Expenses2000  
    To Excess of Income over Expenditure (balance fig.)2210  
     52360 52360

    Balance sheet
    as on 31-12-2018

    Tournament Fund20000 Cash2200
    Less:Tournament Expenses188001200Bank23320
    Salary Outstanding1000Fixed Deposit30000
    Capital (Balancing Fig.)72660 Investment5700
    Add: surplus221074870Crockery2650
      Accrued Interest on Fixed Deposit900
      Subscription Due: 
      2017 (6600-6000)600 
      Stock of Postage and stationery900
      Stock of Cricket goods2800
     77070 77070
  10. Books of Shankar Sports Club
    Income and Expenditure Account
    as on 31 Dec. 2017
    Dr.    Cr.
    Expenditure Amount (₹)Income Amount (₹)
    Rent18,000.....Entrance Fees 3,200
    Add: Outstanding for 20171,500.....Locker Rent 1,200
    .19,500.....Profit from Entertainment 3,000
    Less: Outstanding for 2016(1,500)18,000  .....
    . ...Subscription received during the year40,000.....
    Wages 7,000Less: Outstanding for 2016(1,200).....
    Depreciation on Furniture 2,500.38,800.....
    Interest 2,000Add: Outstanding for 20172,30041,100
    Postage1,000...Deficit (Balancing Figure) 6,100
    Add: Opening Stock300...  ...
     1,300...  ...
    Less: Closing Stock(200)1,100  ...
    Salaries 24,000  ...
      ...  ...
      54,600  54,600

    Balance Sheet as on December 31, 2016

    LiabilitiesAmount RsAssetsAmount Rs
    Rent Outstanding1,500Cash in Hand2,600
    10% Loan20,000Subscription Outstanding1,200
    ....Stock of Postage Stamps300
    ....Capital fund Deficit (Balancing figure)2,400
    Balance Sheet as on December 31, 2017
    Expenditure Amount (₹)Income Amount (₹)
    Rent Outstanding 1,500Subscription Outstanding 2,300
    10% Loan 20,000Stock of Postage Stamps 200
    Donation for Building 23,000Billiard Table 14,000
    Capital Fund(2,400)...Furniture15,000...
    Add: Life Membership Fee (note 1)7,000...Add: Purchases10,000...
    Less: Deficit(6,100)... 25,000...
      ...Less: Depreciation(2,500)22,500
      ...Cash in Hand 4,000
      ...*Capital Fund (Deficit)(note 2) 1500
      44,500  44,500
    Note : 1. Some members of the organisation pay their subscription ( to become the member) in lump sum for the entire life. This amount is called Life Membership Fees. So, Life Membership Fees is a receipt of Capital nature or non-recurring amount since the members will not be required to pay the fee annually. Hence it is not credited to the Income and Expenditure account but added to the Capital Fund.
    2. Since there is insufficient amount in Capital Fund, it will be shown in the Assets side of Balance Sheet.