State Whether the Following Statement is True Or False. - Book Keeping and Accountancy

Question

State whether the following statement is True or False.
The final balancing amount of Income and Expenditure Account represents either surplus or Deficit.

Options

True
False

MCQ

True or False

Solution

True

Explanation: Income and Expenditure Account is prepared to ascertain the financial performance of an NPO. If the income side exceeds the expenditure side, the balancing figure is surplus and if the expenditure side exceeds the income side, the balancing amount is regarded as deficit.

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Preparation of Income and Expenditure Account and Closing Balance Sheet

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Q 9 Q 8 Q 10

Chapter 7: Accounts of 'Not For Profit' Concerns - Exercise 4 [Page 228]

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Micheal Vaz Book Keeping and Accountancy [English] 12 Standard HSC Maharashtra State Board

Chapter 7 Accounts of 'Not For Profit' Concerns
Exercise 4 | Q 9 | Page 228

2017-2018 (July) Set 1 (with solutions)

Q 1.D.1 | 1 mark

RELATED QUESTIONS

Marathi Vishwa Kosha Centre, Wai, has given you the following information from which, you are required to prepare. (i) Income and Expenditure Account for the year ending on 31.03.2013, (ii) Balance Sheet as on 31.03.2013.
Receipts and Payment Account for the year ending 31.03.2013

Receipts	Amount (Rs.)	Payments	Amount (Rs.)
To Balance b/d		By Stationery	5000
Cash in hand	13000	By Furniture [Purchased on 01.01.2013]	50000
To Locker Rent	5000	By Investments	1,00,000
To Entrance Fees	19000	By Expenses of Drama	33500
To Sale of old newspapers	1500	By Postage and telegram	2,500
To Receipts from Drama	78,500	By Magazines and Newspapers	4000
To Legacies	1,10,000	By Salaries	22,000
To Miscellaneous Receipts	8000	By Balance c/d
		Cash in Hand	3000
		Cash at bank	1,10,000
	330000		330000

Additional Information:

(1) Capital fund on 01.04.2012, was Rs. 1,08,000.

(2) Legacies are to be capitalized.

(3) Outstanding salary Rs. 3,000.

(4) 50% of entrance fees is to be capitalized.

(5) Depreciation on Furniture @ 10% p.a.

What is 'deficit'?

Following is the Receipts and Payments Account of Chamber of Commerce, Amaravati for the year ending 31st March 2012 and some additional information.

Receipts and Payments Account For the year ended March 31, 2012
Receipts	Amount	Payment	Amount
To balance b/d (Cash at bank)	11,960	By Printing and Stationery	6,950
To Subscription (Including Rs. 2,500 for 2010–11)	36,500	By Repairs	2,100
To Sale of furniture (Books value Rs. 18,000)	12,000	By Rent	8,500
To Donation for building fund	27,000	By Books	20,000
To Admission fees (Revenue)	5,050	By Travelling expenses	2,000
		By Investments	40,000
		By Insurance	1,700
		By Balance c/d (Cash at bank)	11,260

	92,510		92,510

Additional information:

Particulars	1.04.2011	31.03.2012
Outstanding Subscription	3,000	5,000
Outstanding Subscription	3,000	5,000	Furniture	32,000	12,600
Building Fund	1,45,000
Capital Fund	1,51,960
Investment	2,50,000

Prepare Income and Expenditure A/c for the year ended 31st March, 2012 and Balance Sheet as on that date.

What is ‘balance sheet’?

From the following Balance Sheet and Receipts and Payments A/c of Vidya Mandir High School, Alibag. Prepare Income and Expenditure Account for the year ended 31^stMarch 2008 and Balance Sheet as on that date

Balance Sheet as on 1st April 2007
Liabilities	Amount (Rs)	Assets	Amount (Rs)
Entrance Fees	6,000	Furniture	16,800
Capital Fund	1,03,800	Laboratory	20,000
		Library	25,000
		Investment	40,000
		Cash in hand	1,000
		Cash at bank	3,000
		Outstanding Tuition Fees	4,000
	1,09,800		1,09,800

Receipts and Payments Account for the year ended 31st March 2008
Receipts	Amount (Rs)	Payments	Amount (Rs)
To Balance b/d		By Furniture Purchased	5,400
Cash in hand	1,000	By Salaries	60,000
Cash at bank	3,000	By Rent	28,000
To Tuition Fees	80,000	By Sundry Expenses	15,200
To Term Fees	26,200	By Annual Gathering Expenses	11,300
To Government Grant	16,000	By Insurance	4,000
To Donation of Library	30,000	By Closing Balance
To Interest on Investment	2,000	Cash at bank	34,300
	1,58,200		1,58,200

Adjustments:
1. Tuition fees still receivable are Rs. 10,000.
2. Salaries still payable are Rs. 30,000
3. An insurance premium is paid for one year ending 30.9.2008.
4. Rent paid in advance Rs. 4,000.
5. Depreciate furniture and library at 10%.

Depreciation to be charged on the closing balances of the assets.

With the help of the Balance Sheet and Receipts and Payments Accounts of Adarsh Cultural Club, Mumbai, prepare Income and Expenditure Account for the year ended 31st March, 2013 and the Balance Sheet as on that date :

Balance Sheet as on 01.04.2012

Liabilities	Amount	Assets	Amount
Capital fund	2,57,000	Buildings	2,50,000
Building fund	50,000	Furniture	20,000
Outstanding salary	1,300	Outstanding Subscription	1,000
		Cash in hand	2,400
		Cash at bank	34,900
	3,08,300		3,08,300

Receipts and Payments Account for the year ending 31.03.2013

Receipts	Amount	Amount	Payments	Amount	Amount
To Balance b/d			By Salaries		35,300
Cash in hand		2,400	By Furniture (Purchased on01.10.2012)		10,000
Cash at bank		34,900	By General expenses		8,400
To Subscriptions			By Printing and stationery		4,200
2011–12	1,000		By Drama expenses		16,000
2012–13	48,000		By Balance c/d
2013–14	2,000	51,000	Cash in hand		4,600
To Donations for			Cash at bank		57,800
building fund		20,000
To Drama receipts		28,000
		1,36,300			1,36,300

You are also required to consider the additional information given below:
(1) The club had 100 members, each paying 500 as annual subscription.
(2) Furniture to be depreciated at 20 % p.a.
(3) Salaries include Rs .1,300 paid for outstanding salaries for the year 2011‐12.
Salaries outstanding for the year 2012‐13 were 700.

Expenditure on purchase of a building is a _____.

Income and Expenditure Account includes items of ____ nature only.

Following is the Balance Sheet and Receipts and Payments Account of the Memorial Hospital, Sawantwadi, Prepare Income and Expenditure A/c for the year ended on 31.03.2010 and the Balance Sheet as on that date.

Balance Sheet as on 01.04.2009
Liabilities	Amount Rs.	Assets	Amount Rs.
Capital Fund Outstanding Salaries Medical Bill unpaid	10,04,000 22,000 6,000	Cash in Hand Cash at Bank Land and Building Furniture Equipments Outstanding Subscriptions	6,000 34,000 8,00,000 70,000 1,20,000 2,000
	10,32,000		10,32,000

Receipts and Payments Account for the year ending 31.03.2010
Dr.				Cr.
Receipts	Amount Rs.	Payments	Amount Rs.
To Balance b/d Cash in hand Cash at Bank To Subscriptions (Includes Rs 2,000 received for previous year) To Sale of furniture (Book Value Rs 30,000) To Donations (Revenue) To Life Membership Fees	6,000 34,000 1,30,000 20,000 44,000 25,000	By Salaries (Including of the previous year) By Medicines By Equipments purchased By Taxes By General Expenses By Balance c/d Cash in Hand Cash at Bank	1,10,000 52,000 20,000 3,000 8,600 15,400 50,000
	2,59,000		2,59,000

Consider the following adjustments:

(1) Outstanding subscriptions Rs 12,000.

(2) Capitalise the amount of membership fees.

(3) Prepaid Taxes Rs 500.

(4) Outstanding Salary Rs 12,000.

(5) Write off depreciation Rs 20,000 from Land and Building and Rs 30,000 from Equipments.

(6) Outstanding Medicine bill as on 1.4.2009 is still due.

Following is the summary of Receipts and Payments of Jay Bajrangbali Vyayam Shala, Ajara for the year ending on 31.03.2007.

Receipts and Payments Account For the year ended on 31^st March 2007
Dr.				Cr.
Receipts	Amount Rs.	Payments	Amount Rs.
To Balance b/d To Subscription 2005-06 2006-07 To Donation for Building To Receipts from Entertainments To Interest To Entrance fees	41,600 4,120 1,60,000 50,000 36,440 3,240 45,000	By Salary By Lighting By General Expenses By Entertainments Expenses By Taxes Paid By Printing and Stationery By Expenses paid of 2005-06 By Investment By Fixed Deposit with Ajara Urban Bank By Balance c/d	55,000 10,000 15,360 25,800 5,000 9,440 24,000 1,20,000 40,000 35,800
Total	3,40,400	Total	3,40,400

1. Jay Bajrangbali Vyayam Shala has 4500 members paying annual subscription of Rs. 40 each.

2. Provide for outstanding salary Rs. 5,000.

3. On 1.4.2006 the assets stood as under:

(a)	Land and Building	Rs. 60,000
(b)	Furniture	Rs. 46,000

Depreciate the above assets at 10% p. a.

4. Interest on Investment Rs. 2,000 is not received.

5. Capital Fund was Rs. 1,27,720 on 1.4.2006.

6. 50% of the entrance fees is to be capitalized.

Prepare: Income and Expenditure Account for the year ended 31st March, 2007 and Balance Sheet as on that date.

Answer in one sentence only.
What is Capital Fund?

Answer in one sentence only.
Which receipts are called capital receipts?

Answer in one sentence only.
What is deferred revenue expenditure?

Answer in one sentence only.
What do you mean by recurring expenses?

Answer in one sentence only.
What is legacy?

Answer in one sentence only.
What does ‘surplus’ mean?

Answer in one sentence only.
Which receipts are called ‘Revenue Receipts?

Write one Word / Term / Phrase for the following statement.
Excess of income over expenditure.

Write one Word / Term / Phrase for the following statement.
Excess of expenditure over income

Write one Word / Term / Phrase for the following statement.
A statement showing the financial position of a concern on a particular date.

Select the most appropriate answer from the alternatives given below and rewrite the sentence.
Excess of income over Expenditure is termed as _________________.

State whether the following statement is True or False.
Every year, ‘Bal Vikas Mandir’, a primary school, prepares Income and expenditure Account.

State whether the following statement is True or False.
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.

State whether the following statement is True or False.
Receipts and Payments Account do not have any opening balance.

Following is the Balance Sheet and Receipts and Payments Account of Ekveera Hospital Amravati.

Balance Sheet as on 1.4.2012

LIABILITIES	AMOUNT	ASSETS	AMOUNT
Capital Fund	502000	Cash in Hand	3000
Medical bill Unpaid	3000	Cash at Bank	6000
		Land and Building	400000
		Furniture	35000
		Equipments	60000
		Outstanding Subscription	1000
	505000		505000

Receipts and Payments Account for the year ended 31.3.2013

Receipts	Amount	Payments	Amount
To balance b/d		By Salaries	55000
Cash in Hand	3000	By Medicines	26000
Cash at Bank	6000	By Equipment purchased	10000
To Subscription [Includes Rs. 1000 received for previous year]	65000	By General Expenses	4300
To Sale of Old Furniture [Book value Rs. 15000]	10000	By Balance c/d
To Donations (Revenue)	22000	Cash in Hand	7700
To Life Membership Fees	12500	Cash at Bank	15500

	118500		118500