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Which of the following represents a source of revenue in the provided financial content?
Which of the following represents a source of revenue in the provided financial content?
What type of expense is indicated by 'Expenses on special food to patients'?
What type of expense is indicated by 'Expenses on special food to patients'?
Which of the following is NOT listed among the miscellaneous receipts?
Which of the following is NOT listed among the miscellaneous receipts?
What does 'Balance c/d' represent in the financial context provided?
What does 'Balance c/d' represent in the financial context provided?
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From which activity do 'Proceeds from entertainments' generate income?
From which activity do 'Proceeds from entertainments' generate income?
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Which of the following could potentially indicate financial distress?
Which of the following could potentially indicate financial distress?
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Which group of expenses applies to maintaining the premises and property?
Which group of expenses applies to maintaining the premises and property?
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Which of the following corresponds with operational costs in the provided content?
Which of the following corresponds with operational costs in the provided content?
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What is the treatment of profit or loss on the sale of a fixed asset?
What is the treatment of profit or loss on the sale of a fixed asset?
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In which account are expenses related to a specific fund, such as a sports fund, not shown?
In which account are expenses related to a specific fund, such as a sports fund, not shown?
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What happens to the expenses related to the sale of a fixed asset?
What happens to the expenses related to the sale of a fixed asset?
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How is depreciation treated in the context of fixed assets?
How is depreciation treated in the context of fixed assets?
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What is the treatment of municipal taxes in relation to fixed assets?
What is the treatment of municipal taxes in relation to fixed assets?
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Which statement is true regarding the inclusion of expenses in the profit and loss account?
Which statement is true regarding the inclusion of expenses in the profit and loss account?
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What is the implication of having fund expenditures less than the related assets?
What is the implication of having fund expenditures less than the related assets?
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Which is a correct statement regarding the income treatment of sports funds?
Which is a correct statement regarding the income treatment of sports funds?
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What should be deducted from the total expenses to calculate the salary of the year?
What should be deducted from the total expenses to calculate the salary of the year?
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What does the term 'Net profit on sale' actually refer to?
What does the term 'Net profit on sale' actually refer to?
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What needs to be added to the current income when calculating profit on the sale of an asset?
What needs to be added to the current income when calculating profit on the sale of an asset?
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To find the 'Excess of Income over Expenditure', which items are primarily considered?
To find the 'Excess of Income over Expenditure', which items are primarily considered?
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Which factor decreases the amount of stationery consumed?
Which factor decreases the amount of stationery consumed?
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What does the term 'Current Income' primarily include?
What does the term 'Current Income' primarily include?
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What should be added to calculate 'Other income and gains'?
What should be added to calculate 'Other income and gains'?
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What type of figure is the 'Excess of Expenditure over Income' referred to in the Balance Sheet?
What type of figure is the 'Excess of Expenditure over Income' referred to in the Balance Sheet?
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What was the total amount in the prize fund before any distributions were made?
What was the total amount in the prize fund before any distributions were made?
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For the calculation of 'Net expenses of specific items', which of these factors is crucial?
For the calculation of 'Net expenses of specific items', which of these factors is crucial?
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What was the total expenditure on prize distribution?
What was the total expenditure on prize distribution?
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What adjustment is necessary for calculating the cost of consumables like stationery?
What adjustment is necessary for calculating the cost of consumables like stationery?
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Which of the following is included in the prize fund assets?
Which of the following is included in the prize fund assets?
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What was the total income from the donation for the prize fund?
What was the total income from the donation for the prize fund?
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What was the final balance after the distribution of the prize from the total prize fund?
What was the final balance after the distribution of the prize from the total prize fund?
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What is the total amount of subscriptions received by ABC Club?
What is the total amount of subscriptions received by ABC Club?
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How much did ABC Club spend on salaries during the year?
How much did ABC Club spend on salaries during the year?
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What was the total amount spent on rent by ABC Club?
What was the total amount spent on rent by ABC Club?
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What is the amount recorded as the balance carried forward from the previous period?
What is the amount recorded as the balance carried forward from the previous period?
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What was the total revenue generated from the sale of old newspaper?
What was the total revenue generated from the sale of old newspaper?
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What total amount did ABC Club receive from donation?
What total amount did ABC Club receive from donation?
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How much was spent on books during the year?
How much was spent on books during the year?
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What is the sum of the electric charges incurred by ABC Club?
What is the sum of the electric charges incurred by ABC Club?
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What total amount does ABC Club show for traveling expenses?
What total amount does ABC Club show for traveling expenses?
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What is the total payment made for stationary?
What is the total payment made for stationary?
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What is the total amount allocated for the construction of the auditorium as shown in the Balance Sheet?
What is the total amount allocated for the construction of the auditorium as shown in the Balance Sheet?
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What is the total amount of donations received for the auditorium construction?
What is the total amount of donations received for the auditorium construction?
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How much was the interest accrued from the Auditorium fund investment?
How much was the interest accrued from the Auditorium fund investment?
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What is the opening balance of the Auditorium fund?
What is the opening balance of the Auditorium fund?
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What adjustment is made to the Capital fund from the Auditorium fund?
What adjustment is made to the Capital fund from the Auditorium fund?
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How much was the total investment in the Auditorium fund?
How much was the total investment in the Auditorium fund?
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What is the expected total cost of the auditorium?
What is the expected total cost of the auditorium?
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What is the total balance in the Auditorium fund after accounting for donations and interest?
What is the total balance in the Auditorium fund after accounting for donations and interest?
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Study Notes
Accounting for Not-for-Profit Organizations
- Not-for-profit organizations (NPOs) are voluntary organizations that promote social and charitable purposes, not profit. Examples include hospitals, schools, and religious organizations.
- NPOs differ from profit-making organizations in their ultimate goal. NPOs aim to serve community interests, while profit-making organizations aim to earn profit.
- NPOs receive funding from donations, subscriptions, and other sources. Profit-making organizations often receive funding from owners or partners.
- NPO financial statements include receipts and payment accounts, income and expenditure accounts, and balance sheets. Profit-making organizations include trading account, profit and loss account, and balance sheet.
- The net result of NPO activities is either surplus or deficit. Profit/loss is the net result for profit-making organizations.
- A receipts and payment account is prepared based on the cash book, recording all cash transactions, whether revenue or capital in nature, and specific to a particular accounting period.
- An income and expenditure account is similar to a profit & loss account, but it only records revenue transactions related to the current year. It's a nominal account, unlike a receipts and payment account, which is a real account.
Key Differences Between Accounts
- Receipts and Payment Account: Records all cash transactions, whether revenue or capital, specific to a particular accounting period. It's based on the cash book and is a real account.
- Income and Expenditure Account: Similar to a profit & loss account but only records revenue transactions pertaining to the current year. It's a nominal account.
Specific Items in Accounting for NPOs
- Subscriptions: Periodic amounts paid by members. Treated as revenue.
- Consumable Items: Stationery, medicine, etc. Treated as revenue expenditure.
- General Donations: Can be used for any purpose. Treated as revenue receipt.
- Specific Donations: Limited purpose use. Treated as capital receipt.
- Entrance Fees: Paid when joining an organization. Treated as revenue receipt.
- Sale of old sports material/newspaper: Recorded as revenue receipt.
- Life Membership Fees: One-time payments for lifetime membership. Treated as capital receipt.
- Legacy: Donations (cash or property) as per will. Treated as capital receipt.
- Endowment Fund: Amounts dedicated to a specific purpose. Treated as capital receipt.
- Honorariums: Payments to recognize contributions, such as guest lectures. Treated as an expense.
- Upkeep expenses (lawn, maintenance): Treated as expenses.
Important Income Formats
- Organizations create income, expenditure, and balance sheet statements for a specific accounting period, usually one year.
- The formats include columns for various types of cash transactions.
- Specific sections track outstanding amounts, prepaid amounts, and adjustments as required.
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Description
Test your knowledge on key financial concepts with this quiz. It covers sources of revenue, types of expenses, and treatment of assets. Perfect for students studying finance or accounting.
