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Question
State whether the following statement is True or False with reasons.
Charitable Institutions prepare Profit and Loss Account, at the end of every financial year.
Options
True
False
Solution
Charitable Institutions prepare Profit and Loss Accounts at the end of every financial year. - False.
Explanation:
Charitable Institutions, Not-for-profit concerns, do not undertake any trading activities. Hence, instead of a Profit and Loss Account, prepare an Income-Expenditure Account to record all revenue, expenses/losses and income/gains of the current year.
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RELATED QUESTIONS
Miss Kalpana started her business with a capital of 1,30,000 on 1st April, 2015. Her financial position on 31st March 2016 was as follows:
| Amount ( Rs) | |
| Cash | 9,120 |
| Stock | 10,250 |
| Bills payable | 12,880 |
| Creditors | 17,180 |
| Debtors | 31,000 |
| Prepaid insurance | 550 |
| Bills receivable | 29,120 |
| Premises | 85,800 |
| Vehicles | 40,200 |
Additional information :
1. Miss Kalpana brought additional capital of 20,000 on 30th September, 2015
2. Interest on capital is to be allowed at 5% p.a.
3. She withdrew 10, 000 for personal use.
4. Reserve for doubtful debts is to be provided at 2½ % after writing off bad debts of 1,000.
5. Depreciate vehicles at 10% p.a. and premises at 5 % p.a.
6. Creditors were overvalued by 2,180.
Prepare :
(1) Closing Statement of Affairs as on 31.03.2016.
(2) Statement of Profit or Loss for the year ended 31.03.2016.
Goods brought into the joint venture by a co-venturer from his own stock is debited to _____.
A sum of money, goods or any asset, given to someone voluntarily, without any compensation is called ____.
The major source of revenue to a non-trading concern from its members.
Following is the accounting information for the year 2009-2010 of Cricket Club, Pune, You are required to prepare Income and Expenditure Account as on 31.03.2010 and Balance Sheet as on that date.
Balance Sheet as on 01.04.2009
| Liabilities |
Amount
(Rs.)
|
Assets |
Amount
(Rs.)
|
Amount
(Rs.)
|
| Capital Fund | 67,100 | Land | 120,000 | |
| Building Fund | 54,000 | Sports Material | 32,000 | |
| Bank Overdraft | 37,400 | Cash in Hand | 2,200 | |
| Outstanding Subscriptions | ||||
| 2007-2008 | Rs.1800 | |||
| 2008 - 2009 | Rs.2500 | 4,300 | ||
| 158,500 | 158,500 |
Receipts and Payments Account for year ending on 31-03-2010
Dr. Cr.
| Receipts |
Amount (Rs.)
|
Amount (Rs.)
|
Payments |
Amount (Rs.) |
Amount |
| To Balance b/d (cash in Hand) |
2200 | Bank Overdraft (repaid) | 37,400 | ||
| To subscription | 69,800 | By Salaries | 25,600 | ||
| 2007-2008 | 1800 | By Electricity Charges | 2,250 | ||
| 2008-2009 | 2500 | By Rent and Taxes | 1,750 | ||
| 2009-2010 | 65500 | By Printing and Stationery | 5,100 | ||
| By Entertainment Expenses 31/03/2010 |
8,700 | ||||
| To Donations | 11,000 | By Balance c/d | |||
| To Entertainment Receipts | 8,800 | Cash in Hand Cash at Bank |
3,000 10,000 |
||
| To Entrance Fees | 2,000 | ||||
| 93,800 | 93,800 |
Adjustments:
1) Donation are received for Building Fund.
2) Entrance Fees are to be Capitalized.
3) Outstanding Subscription Rs 1,500.
4) Depreciate sport Material @ 12 1/2% p.a.
(Accounts of a Charitable Hospital)
Following information has been provided by “Janseva Charitable Hospital”, Latur. You are required to prepare Income and Expenditure Account for the year ending on 31/03/2013 and Balance Sheet as on that date.
Balance Sheet as on 01/04/2012
| Liabilities |
Amount (Rs.) |
Assets |
Amount (Rs.) |
| Capital Fund | 10,37,000 | Building | 10,00,000 |
| Bank Loan | 600,000 | Ambulance | 350,000 |
| Outstanding bill for Drugs | 45,000 | Stock of Drugs | 35,000 |
| Hospital Equipments | 295,000 | ||
|
Cash in Hand |
2,000 | ||
| 16,82,000 | 16,82,000 |
Receipts and Payments Account for the year ending 31.03.2013
Dr. Cr.
| Receipts |
Amount (Rs.)
|
Payments |
Amount (Rs.)
|
| To Balance b/d | 2,000 | By Purchases of Drugs | 190,000 |
| To subscription | 210,000 | By Salary of staff | 85,000 |
| To Life Membership Fees | 27,500 | By Honararium to Doctors | 385,000 |
| To Hospital Receipts (Revenue) | 520,900 | By Repairs and Maintenance | 17,900 |
| By Furniture | 40,000 | ||
|
By General Expenses |
12,600 | ||
|
By Balance c/d |
29,900 | ||
| 760,400 | 760,400 | ||
Adjustments:
1) On 31/03/2013 stock of Drugs was valued Rs 20,000.
2) Depreciate Building @ 5% p.a. and Ambulance by Rs 20,000
3) Life Membership Fees are to be capitalized.
(Only Income and Expenditure Account)
The following is the Receipts and Payments Account of Star Citizen’s Association, Bilaspur for the year ending on 31/03/2012
Receipts and Payment Account for the year ending on 31/03/2012
Dr. Cr.
| Receipts |
Amount
(Rs.)
|
Amount
(Rs.)
|
Payments |
Amount
(Rs.)
|
Amount
(Rs.)
|
| To Balance b/d | 5,500 | By Postage and Telegram | 1,500 | ||
| To Subscriptions | 87,900 | By Stationary Purchased | 6,000 | ||
| 2010-2011 | 3,900 | By Fixed Deposits | 100,000 | ||
| 2011-2012 | 81,500 | By Picnic Expenses | 7,900 | ||
| 2012-2013 | 2,500 | By Salaries | 20,000 | ||
| To Entrance Fees (to be Capitalized) |
2,000 | By Annual General - meeting expenses |
4,500 | ||
| To Donations | 50,000 | By Insurance Premium | 3,450 | ||
| To Legacies | 10,000 |
By Sundry Expenses |
4,800 | ||
| To Interest on Deposits | 30,000 | By Furniture | 26,000 | ||
| To Picnic Receipts | 5,750 | By Balance c/d | 17,000 | ||
| 191,150 | 191,150 |
Adjustments:
1) Outstanding Picnic Receipts Rs 4,250.
2) Furniture was purchased on 01/10/2011 and it is to be depreciated @ 10% p.a.
3) Outstanding subscriptions for current year Rs 8,200.
4) Stock of Stationery on 01/04/2011 was Rs 650 and on 31/03/2012 was Rs 1,150.
5) Entries amount of legacies and 50% of Donations are to be capitalized.
With the above information, you are required to prepare Income and Expenditure Account for the year ending on 31/03/2012.
(Newly started Associations)
Following is the Receipts and Payments Account of Bavdhan Pensioners Association newly started on 01.04.2010.
Receipts and Payment Account for the year ending on 31-03-2011
Dr. Cr.
| Receipts |
Amount
(Rs.)
|
Amount
(Rs.)
|
Payments |
Amount
(Rs.)
|
Amount
(Rs.)
|
| To Subscriptions received | 93,900 | By rent | 6,000 | ||
| For 2010-2011 | 85,000 | By Travelling Expenses | 2,800 | ||
| For 2011-2012 | 6,900 | By Expenses for get-together Function | 3,300 | ||
| For 2012-2013 | 2,000 | By Charity | 1,000 | ||
| To Entrance Fees | 11,000 | By Salaries | 4,500 | ||
| To Donations | 25,000 | By Furniture | 30,500 | ||
| By Fixed Deposit | 50,000 | ||||
| By Balance c/d | 31,800 | ||||
| 129,900 | 129,900 |
Adjustments:
1) Outstanding Subscription for current year Rs 10,000.
2) Entrance Fees are to be capitalized.
3) ‘Capital Fund’ should be created out of Entrance Fees and Surplus of the current year’.
4) Depreciate Furniture by Rs 2,500.
You are required to prepare Income and Expenditure Account for the year ending on 31/03/2011 and Balance Sheet as on that date.
(Presentation of Subscriptions only)
Balance Sheet as on 01/04/2012
| Liabilities |
Amount (Rs.)
|
Amount (Rs.)
|
Assets |
Amount (Rs.) |
Amount (Rs.) |
| Subscription received in |
Outstanding subscriptions |
||||
| Advance for 2012-2013 | 15,000 | 2010-2011 | 20,000 | ||
| 2011-2012 | 30,000 | 50,000 |
Receipts and Payments Account for the year ending on 31-03-2013
Dr. Cr.
| Receipts | Amount (Rs.) | Amount (Rs.) | Payments | Amount (Rs.) | Amount (Rs.) |
| To subscriptions | |||||
| 2010-2011 | 16,000 | ||||
| 2011-2012 | 25,000 | ||||
| 2012-2013 | 330,000 | ||||
| 2013-2014 | 19,000 |
Adjustment:
Outstanding Subscription for 2012-2013 is Rs 22,000. With the above information present the item 'Subscription’ in Income and expenditure Account and Balance sheet for the year ended on 31st March 2013.
(Calculation of Drugs Consumed during the year)
From the information given below calculate the amount of Drugs consumed in a hospital, during the year 2012-2013. Show its presentation in Income and Expenditure Account and Balance Sheet as on 31-03-2013.
| Stock Drugs in Hand | On 01-04-2012 Rs 25,000 | On 31-03-2013 Rs 27,000 |
|
Drugs purchased during the year |
Rs 1,20,000 |
- |
| Bill of drugs payable on 31-03-2013 | Rs 19,500. | - |
Following is the Receipts and payments Accounts and additional information of Jeevan Hospital , Kolhapur . Prepare Incomeand Expenditure Account for the year ending 31st March , 2016 and the balance Sheet as on that date.
Receipts and Payments Account for the year
ended on 31st March , 2016
Dr. Cr.
| Receipts | Amount (₹) | Payments | Amount (₹) | |
| To Balance B/d | 12000 | By Medicine | 20000 | |
| To Subscription | By Honorarium to doctors | 150000 | ||
| 2014 - 2015 | 15000 | 235000 | By Ambulance maintance | 88000 |
| 2015 - 2016 | 190000 | By Hospital equipment purchased | 60000 | |
| 2016 - 2017 | 30000 | By Furniture purchased | 50000 | |
| To Donation for building fund | 110000 | By Fixed deposit | 200000 | |
| To Life membership fees | 50000 | By Balance c/d | 139000 | |
| To Hospital receipts (Revenue) | 300000 | |||
| 707000 | 707000 | |||
Additional information :
(1) Outstanding subscription for 2015 - 2016 is 10000.
(2) Hospital equipment and furniture were purchased on 01.10.2015 and both the assets were to be depreciated @ 20 % p.a.
(3) Life membership fees are to be capitalized.
(4) Staff salary for current yera is outstanding ₹ 15000
(5) On 01.04.2015 the hospital had the following assets and liabilities :
Land ₹ 500000;
Investment ₹ 100000 ;
Bank loan ₹ 400000 ;
Ambulance ₹ 205000
(6) Capital fund as on 01.04.2015 was ₹ 432000.
Not for Profit Concern renders __________ services to public at large.
Not for Profit Organization never is engaged in __________ activities.
Find odd one:
Following is the Balance Sheet on 1st April 2019 and Receipts and Payments Accounts of M.J.Liabrary. You are required to prepare Income and Expenditure Account for the year ended 31st March, 2020 and Balance Sheet as of that date.
| Balance Sheet as on 1st April, 2019 |
|||
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Capital Fund | 15,00,000 | Furniture | 1,00,000 |
| Subscription Received in Advance | 6,000 | Books | 13,01,000 |
| Outstanding Expenses | 4,000 | Stock of Postage Stamps | 1,000 |
| Investment in Shares | 14,000 | ||
| Cash in Hand | 94,000 | ||
| 15,10,000 | 15,10,000 | ||
| Dr. | Receipts and Payments Account for the year ended 31st March, 2020 | Cr. | |
| Receipts | Amount (₹) | Payments | Amount (₹) |
| To Balance b/d - Cash | 94,000 | By Salaries | 48,000 |
| To Members Subscription | 3,60,000 | By Purchase of postage Stamps | 3,000 |
| To Entrance fees | 60,000 | By Books (Purchased on 1-10-19) | 2,00,000 |
| To Hire of Lecture Hall | 24,000 | By Outstanding Expenses Paid | 4,000 |
| To Interest on Shares | 10,000 | By Investments in Fixed Deposits | 1,00,000 |
| To Life Members Fee | 20,000 | By Furniture (Purchases on 1-7-2019) | 60,000 |
| By Printing and Stationery | 12,000 | ||
| By Rent | 36,000 | ||
| By Balance c/d - Cash | 1,05,000 | ||
| 5,68,000 | 5,68,000 | ||
Adjustments:
(1) Depreciation on Books at 10% p.a.
(2) Depreciation on Furniture at 10% p.a.
(3) 50% Entrance fees and whole amount of Life Membership Fees should be capitalised.
(4) Library had 2,000 members paying Subscription ₹ 200 each.
(5) The value of unused Postage Stamps was ₹ 400.
What are the main characteristics of not-for-profit organizations?
The final accounts of a 'not-for-profit organization' consist of the following ______?
How would you treat the following item in the case of a 'not-for-profit' organization?
"Table Tennis match expenses Rs.4.000."
Complete the following sentence.
______ is a membership fee paid by the member on annual basis. This is the main source of income for such organizations.
The amount of 'Entrance Fees' received by a Not-for-profit organization (if it is received regularly) is shown in which of the following?
Distinguish between profit and not-for-profit organisation.
What is meant by a Not For Profit Organisation?
Not for Profit Concern renders ______ services to public at large.
Which of the following is not considered a tool for formative assessment?
Which of the following is not considerd a tool for formetive assesment?
Assertion: The SI system of units is the suitable system for measurements.
Reason: The SI unit of temperature is kelvin.
Assertion: the SI system of units is the suitable system for measurement.
Reason: The SI unit of thempereture is kelvin.
Consider the following satement and tick the appropriate asnwer
- The vellore revolt held in 1801.
- The family member of Tippu were imprisoned at vellore for after the fourt mysore war.
- At the time of vellore of revolt, the governor of madras was lord William Bentink.
- The victory of revolt of Vellore against British was one of the significant even in the history of india.
Find the Odd one.
Ethylence is synthesised in ______.
ANALOGY
Knot in a thread : ______ friction; ball bearing : ______ friction
Analogy
Knot in a thread : ______ friction; ball bearing : ______ friction.
Which the word/phease/term, which can subsitude the following sentence.
Persons who form the partnership firm.
Write the word/phrase/term, which can substitute the following sentence.
Persons who form the partnership firm.
State whether the following statement is True or False with reason.
Income and Expenditure Account represents either surplus or deficit.
Find the incoreect pair from group A and B.
Match the following.
| 1. | Delhi | Kunwar singh |
| 2. | Kanpur | Khan Bahudar Khan |
| 3. | Jhansi | Nana Saheb |
| 4. | Bareilly | Lakshmi Bai |
| 5. | Bihar | Bahadur Shah II |
Mumbai University prepares ______ account instead of a profit and loss account.
Mumbai University prepares ______ Account instead of a Profit and Loss account.
| Nitya, Shreya and Ishita are partners in a firm. They share profits in the ratio of 5 : 3 : 2. Their fixed capitals are ₹ 180,000; ₹ 160,000 and ₹ 2,00,000 respectively. For the year ending 31st March, 2022, Nitya withdrew ₹ 7,500 at the end of every quarter. |
The average number of months for which interest on drawings will be calculated, will be ______.
Mumbai University prepares ______ Account instead of a Profit and Loss account.
Mumbai Universtiy prepares ______ Account instead of a Profit and Loss account.
