Ques 1. Scholarship granted to students out of specific funds provided by Government will be debited to
(a) Income and Expenditure Account.
(b) Receipts and payments Account.
(d) None of the three.
Ques 2. In case of NPO, excess of total assets over liabilities is known as
(c) Capital Fund.
(d) Accumulated Fund.
Ques 3. General donations and legacies are credited to
(a) Receipts and Payments Account.
(b) Income and Expenditure Account.
(c) Capital Fund.
(d) Fund Account.
Ques 4. Interest on prize funds is
(a) Credited to Income and Expenditure Account.
(b) Credited to Receipts and Payments Account.
(c) Capital Fund.
(d) Added to prize fund.
Ques 5. Special aids are
(a) Treated as capital receipts.
b) Treated as revenue receipts.
(c) Added to Capital Fund.
(d) Both (a) and (c).
Ques 1. Distinguish Between Receipt and Payment and Income and Expenditure Account.
Ans: Non-profit making organizations such as public hospitals, public educational institutions, clubs etc., conventionally prepare Receipt and Payment Account and Income and Expenditure Account to show periodic performance for a particular accounting period. For distinguishing features of both the accounts, Refer para 3.1.
Ques 1. The following is the Receipts and Payments Account of Lion Club for the year ended 31st March, 2016.
The assets and liabilities as on 1.4.2015 were as follows:
The following adjustments are to be made while drawing up the accounts:
(i) Subscription received in advance as on 31st March, 2016 was Rs 18,000.
(ii) Outstanding subscription as on 31st March, 2016 was Rs 7,000.
(iii) Outstanding expenses are salaries Rs 8,000 and electricity Rs 15,000.
(iv) 50% of the entrance donation was to be capitalized. There was no pending membership as on 31st March, 2016.
(v) The cost of assets sold net as on 1.4.2015 was Rs 10,000.
(vi) Depreciation is to be provided at the rate of 10% on assets.
(vii) A sum of Rs 20,000 received in October 2015 as entrance donation from an applicant was to be refunded as he has not fulfilled the requisite membership qualifications. The refund was made on 3.6.2016.
(viii) Purchases made during the year amounted Rs 15,00,000.
(ix) The value of closing stock was Rs 2,10,000.
(x) The club as a matter of policy, charges off to income and expenditure account all purchases made on account of crockery, cutlery, glass and linen in the year of purchase.
You are required to prepare an Income and Expenditure Account for the year ended 31st March, 2016 and the Balance Sheet as on 31st March, 2016 along with necessary workings.
Income and Expenditure Account of Lion Club for the year ended 31st March, 2016
Balance Sheet of Lion Club as on 31st March, 2016
Opening Balance Sheet Balance Sheet of Lion Club as on 1st April, 2015
3. Entrance donation
4. Loss on sale of asset
7. Electricity charges
9. Profit from operations
11. Sundry creditors
12. Outstanding expenses
13. Fixed assets
14. Capital fund
Ques 2. During the year ended 31st March, 2016, Sachin Cricket Club received subscriptions as follows:
There are 500 members and annual subscription is Rs 1,500 per member.
On 31st March, 2016, a sum of Rs 15,000 was still in arrears for subscriptions for the year ended 31st March, 2015. Ascertain the amount of subscriptions that will appear on the credit side of Income and Expenditure Account for the year ended 31st March, 2016. Also show how the items would appear in the Balance Sheet as on 31st March, 2015 and the Balance Sheet as on 31st March, 2017.
Ans: Income & Expenditure Account (An extract) of Sachin Cricket Club For the year ended 31st March, 2016
Balance Sheet of Sachin Cricket Club as on 31st March, 2015 (An extract)
Balance Sheet of Sachin Cricket Club as on 31st March, 2016 (An extract)
Ques 3. Summary of receipts and payments of Bombay Medical Aid society for the year ended 31.12.2016 are as follows:
Opening cash balance in hand Rs 8,000, subscription Rs 50,000, donation Rs 15,000 (raised for meeting revenue expenditure), interest on investments @ 9% p.a. Rs 9000, payments for medicine supply Rs 30,000 Honorarium to doctor Rs 10,000, salaries Rs 28,000, sundry expenses Rs 1,000, equipment purchase Rs 15,000, charity show expenses Rs 1,500, charity show collections Rs 12,500.
You are required to prepare receipts and payments account and income and expenditure account for the year ended 31.12.2016 and balance sheet as on 31.12.2016.
Ans: Receipts and Payments Account of Bombay Medical Aid Society for the year ended 31st December, 2016
Income and Expenditure Account of Bombay Medical Aid Society for the year ended 31st December, 2016
Balance Sheet of Bombay Medical Aid Society as on 31st December, 2016
Subscription received in advance
Amount due for medicine supply
Stock of medicine
Cash in hand
Balance Sheet of Medical Aid Society as on 1st January, 2016