Tag: accounting for not-for-profit organisation
Questions Related to accounting for not-for-profit organisation
Deficit as per Income and Expenditure Account is given effect as______________.
The deficit as per Income and Expenditure Account is deducted from capital fund. Capital fund is the excess over assets over liabilities. Any addition or reduction in the fund is adjusted through the capital fund account.
Non-production overheads are usually omitted from stock valuation for the following reason :
SSAP 9 defines that the valuation of stock is to be done on cost or realizable value whichever is less. Cost is further defines as the cost of raw material, labour, expenses and overheads which are incurred for bring the stock at its location and condition.
In Not-for-Profit organisations effect of surplus is_____________.
Not-for-profit organisation prepare balance sheet for ascertaining the financial position of the organisation. There will be capital fund or general fund in place of the capital, and surplus or deficit ascertained from income and expenditure account is added to/ deducted to the capital fund account.
If a small amount is received as specific donation the __________.
b"Donation received for specific purpose is capital receipt. Specific donation can't be used for any other purpose than the purpose for which it is given. It creates a liability for Not for Profit Organisation. That's why It is shown on the liabilities side of the balance sheet. "
Outstanding subscription for a non-profit organization is considered as a/an ____________.
Subscription is a annual charge paid by the members of the organisation to receive or avail service or information. It is an income for the organisation and if income is outstanding or say yet to be received it will be an asset for the company hence, will be shown under the head current assets.
Donations for specific purposes are always capitalized.
True. Specific donations is a donation received for a specific purpose say for constructing a building. Specific donations are not charged to income and expenditure account rather capitalised and shown on the liabilities side and any expenses of the same are deducted from the fund.
Surplus of Income and Expenditure Account is deducted from the capital/general fund.
False. Surplus of Income and expenditure account is added to the capital/general fund. Surplus is arrived when there is excess of income over expenditure hence it is addition to the and fund and should be added to the capital fund.
State True or False:
Scholarships granted to students out of funds provided by government will be debited to Income and Expenditure Account.
False. Scholarships granted to students out of funds provided by government will be deducted from the fund provided by government. If there appears any fund respective incomes/expenses will added/deducted from the respective fund.
If there appears a sports fund, the expenses incurred on sports activities will be shown on the debit side of Income and Expenditure Account.
False. If there appears a sports fund, the expenses incurred on sports activities will be deducted from the sports fund. If there appears any fund respective incomes/expenses will added/deducted from the respective fund.
Income and expenditure accounts show ______________.
Income and Expenditure account is prepared to calculate the surplus or deficit with the company for current accounting period. The previous year transaction and the various cash transactions are not considered while preparing this account beacuse such transaction are related to receipt and payment account.