Not-for-Profit Accounting Quiz

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Questions and Answers

What is the main objective of not-for-profit organisations?

  • Competing with business organizations
  • Providing service to members and the public (correct)
  • Minimizing expenses to increase surplus
  • Maximizing profit for the organization

Which financial statements are prepared by not-for-profit organisations?

  • Profit and Loss Account and Trial Balance
  • Cash Flow Statement and Statement of Retained Earnings
  • Income Statement and Balance Sheet
  • Receipt and Payment Account and Income and Expenditure Account (correct)

What is the purpose of the Receipt and Payment Account?

  • To calculate the net income or loss for the organization
  • To summarize cash receipts and payments during a period (correct)
  • To provide a detailed breakdown of fixed assets
  • To record all revenue and expenses over a period of time

What distinguishes the Income and Expenditure Account from the Receipt and Payment Account?

<p>The former includes only revenue items, while the latter includes both revenue and capital items (B)</p> Signup and view all the answers

What type of items are included in the Income and Expenditure Account?

<p>Both revenue and capital items (D)</p> Signup and view all the answers

Which financial statements are typically prepared by not-for-profit organisations?

<p>Income and Expenditure Account and Balance Sheet (D)</p> Signup and view all the answers

What is the primary focus of not-for-profit organisations?

<p>Service to members and the public (D)</p> Signup and view all the answers

What is the purpose of the Receipt and Payment Account?

<p>Summarize cash transactions during a period (B)</p> Signup and view all the answers

Which items are included in the Income and Expenditure Account?

<p>Revenue and expenses for a specific period (C)</p> Signup and view all the answers

What distinguishes the Income and Expenditure Account from the Receipt and Payment Account?

<p>Accrual basis of accounting versus cash basis (B)</p> Signup and view all the answers

Flashcards

Objective of NPOs?

To provide services to its members and the public.

NPO financial statements?

Receipts and Payments Account, and Income and Expenditure Account are the two main financial statements.

Purpose of Receipt and Payment Account?

Summarizes all cash inflows and outflows during a specific period.

Income & Expenditure vs. Receipts & Payments?

Includes only revenue items, while Receipts and Payments includes both revenue and capital items.

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Items in Income & Expenditure Account?

Revenue and expenses for a specific period.

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Typical NPO Financial Statements?

Income and Expenditure Account and Balance Sheet.

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Purpose of the Receipt and Payment Account?

Summarizes all cash transactions during a period.

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Key difference between the two accounts?

Accrual basis of accounting versus cash basis.

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