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CA Foundation Financial Statements of Not-for-Profit Organisations — practice questions

Explore 52 free Financial Statements of Not-for-Profit Organisations questions in CA Foundation Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Financial Statements of Not-for-Profit Organisations questions and exercises with answers

Showing questions 1–30 of 52.

Receipts and Payments Account is essentially a summary of:Read the answer and worked solution →In NPO accounting, surplus refers to:Read the answer and worked solution →Income and Expenditure Account is prepared on:Read the answer and worked solution →Capital expenditure in an NPO is:Read the answer and worked solution →A specific donation for building construction is credited to:Read the answer and worked solution →Subscriptions received during 2022 ₹42,000 (incl. ₹1,600 for 2021 and ₹600 for 2023); outstanding 2022 ₹3,000. Credit to I&E:Read the answer and worked solution →Salaries paid ₹23,000; opening O/S ₹1,400; opening prepaid ₹400; closing O/S ₹1,800; closing prepaid ₹600. I&E debit:Read the answer and worked solution →Entrance fees as per club bye-laws are treated as:Read the answer and worked solution →Life Membership Fees are normally treated as:Read the answer and worked solution →Capital Fund of NPO at start of year is computed by:Read the answer and worked solution →Tournament expenses ₹50,000 against tournament receipts ₹70,000. I&E credit (net):Read the answer and worked solution →R&P Account differs from I&E Account in that R&P:Read the answer and worked solution →Depreciation on furniture in an NPO is:Read the answer and worked solution →Specific donation for building ₹10,000 received and Pavilion cost ₹11,000 incurred. Treatment:Read the answer and worked solution →Donation ₹50,000 received; no specific purpose stated. Treatment:Read the answer and worked solution →Opening assets ₹2,00,000; opening liabilities ₹30,000; current surplus ₹40,000. Closing Capital Fund:Read the answer and worked solution →Stationery purchased ₹8,000; opening stock ₹2,000; closing stock ₹3,000. I&E debit:Read the answer and worked solution →Honorarium of ₹10,000 paid to a speaker is treated as:Read the answer and worked solution →Subscription received during year includes ₹4,000 for next year. I&E should include:Read the answer and worked solution →Why is R&P alone insufficient for NPO performance assessment?Read the answer and worked solution →NPO incurs ₹15,000 on books for library. These books are added to:Read the answer and worked solution →Endowment fund of ₹2,00,000 is set up. Income from this fund (interest received) ₹15,000. The interest is:Read the answer and worked solution →Treatment of legacy donation received specifically for a charitable activity:Read the answer and worked solution →Fund accounting, used by non-profit bodies, mainly emphasizes which aim?Read the answer and worked solution →In fund accounting, a fund is best described as which of these?Read the answer and worked solution →A donor gives money that may be used only for a library building. Which fund class suits it?Read the answer and worked solution →Which fund holds unrestricted resources the board may use freely?Read the answer and worked solution →A board earmarks funds for a hall but may cancel it. This is a?Read the answer and worked solution →A charity runs shops and uses their profits for its cause. Which fund records this activity?Read the answer and worked solution →Which fund holds land, buildings and equipment separately from current assets?Read the answer and worked solution →

Worked practice questions

Receipts and Payments Account is essentially a summary of:

  1. Cash Book transactions
  2. Profit and Loss Account
  3. Balance Sheet of NPO
  4. Reserves and surplus head
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Correct answer: A. Cash Book transactions

1. R&P Account lists all cash and bank receipts and payments during the period. 2. It is a classified summary of the cash book. 3. It begins with opening cash/bank balance and ends with closing balance. _Source: ICAI BoS Foundation Paper 1, Ch 8 "NPO", §2 ¶1_

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In NPO accounting, surplus refers to:

  1. Excess of cash in hand
  2. Excess of income over expenditure
  3. Capital exceeding liabilities
  4. Donations received in year
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Correct answer: B. Excess of income over expenditure

1. Surplus is the NPO equivalent of profit. 2. It equals income over expenditure for the period. 3. It is added to the Capital/Accumulated Fund. _Source: ICAI BoS Foundation Paper 1, Ch 8 "NPO", §1 ¶3_

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Income and Expenditure Account is prepared on:

  1. Cash basis of accounting
  2. Mixed basis as needed
  3. Accrual basis of accounting
  4. Tax authority basis only
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Correct answer: C. Accrual basis of accounting

1. I&E Account follows the accrual principle. 2. Only revenue items relating to the current period are included. 3. Adjustments are made for accrued and prepaid items. _Source: ICAI BoS Foundation Paper 1, Ch 8 "NPO", §3 ¶1_

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