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Micheal Vaz solutions for 12th Board Exam Book Keeping and Accountancy chapter 7 - Accounts of 'Not For Profit' Concerns

Micheal Vaz Class 12 Accounts - Book Keeping and Accountancy

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Micheal Vaz Micheal Vaz Class 12 Accounts - Book Keeping and Accountancy

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Chapter 7: Accounts of 'Not For Profit' Concerns

Exercise

Chapter 7: Accounts of 'Not For Profit' Concerns Exercise Exercise solutions [Page 227]

Exercise | Q 1 | Page 227

Answer in one sentence only.
What do you mean by ‘Not for Profit’ concerns?

Exercise | Q 2 | Page 227

Answer in one sentence only.
What is Capital Fund?

Exercise | Q 3 | Page 227

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

Exercise | Q 4 | Page 227

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

Exercise | Q 5 | Page 227

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

Exercise | Q 6 | Page 227

Answer in one sentence only.
What is legacy?

Exercise | Q 7 | Page 227

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

Exercise | Q 8 | Page 227

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

Exercise | Q 9 | Page 227

Answer in one sentence only.
What is an Entrance Fee?

Exercise | Q 10 | Page 227

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

Exercise | Q 11 | Page 227

Answer in one sentence only.
What is ‘Deficit’?

Exercise | Q 12 | Page 227

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

Chapter 7: Accounts of 'Not For Profit' Concerns Exercise Exercise solutions [Page 227]

Exercise | Q 1 | Page 227

Write one Word / Term / Phrase for the following statement.
An Account, which is prepared by ‘Not for Profit’ concern, instead of Profit and Loss Account.

Exercise | Q 2 | Page 227

Write one Word / Term / Phrase for the following statement.
The excess of total assets over total liabilities of a ‘Not for Profit’ Concern.

Exercise | Q 3 | Page 227

Write one Word / Term / Phrase for the following statement.
The income which is earned during the year, but it has not been received during the year.

Exercise | Q 4 | Page 227

Write one Word / Term / Phrase for the following statement.
Such concerns, which are formed for rendering some useful services to its members without having profit motive.

Exercise | Q 5 | Page 227

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

Exercise | Q 6 | Page 227

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

Exercise | Q 7 | Page 227

Write one Word / Term / Phrase for the following statement.
A fund created out of a specific amount earmarked, gifted, or donated and the income of this fund is to be used for a specific purpose.

Exercise | Q 8 | Page 227

Write one Word / Term / Phrase for the following statement.
The fees paid by a person, who wants to become a member of the concern, for his whole life.

Exercise | Q 9 | Page 227

Write one Word / Term / Phrase for the following statement.
All such receipts which are non-recurring in nature and not forming a part of regular flow of income of a concern.

Exercise | Q 10 | Page 227

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

Chapter 7: Accounts of 'Not For Profit' Concerns Exercise Exercise solutions [Pages 227 - 228]

Exercise | Q 1 | Page 227

Select the most appropriate answer from the alternatives given below and rewrite the sentence.
Income and Expenditure Account is a ______________.

  • capital account

  • real account

  •  personal account

  • nominal account

Exercise | Q 2 | Page 227

Select the most appropriate answer from the alternatives given below and rewrite the sentence.
For a sports club, expenditure on the purchase of sports Machinery/Equipment is a ______________ expenditure.

  •  revenue

  •  recurring

  • general

  •  capital

Exercise | Q 3 | Page 227

Select the most appropriate answer from the alternatives given below and rewrite the sentence.
‘Outstanding subscription’ at the end of Accounting year represents _____________.

  • a liability

  • an expenditure

  • an asset

  • a capital fund

Exercise | Q 4 | Page 228

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

  • deficit

  • profit

  • surplus

  •  loss

Exercise | Q 5 | Page 228

Select the most appropriate answer from the alternatives given below and rewrite the sentence.
‘Not for Profit’ Concerns prepare _________________ Account instead of Profit and loss Account.

  • Trading

  • Income and Expenditure

  • Cash

  • Receipts and Payments

Exercise | Q 6 | Page 228

Select the most appropriate answer from the alternatives given below and rewrite the sentence.
Purchase of stationery is an _______________ expenditure.

  • capital

  •  revenue

  • long-term

  • deferred revenue

Exercise | Q 7 | Page 228

Select the most appropriate answer from the alternatives given below and rewrite the sentence.
Usually _______________ is a major source of revenue income for ‘Not for Profit’ concerns.

  •  subscription

  • donations

  •  legacies

  •  life membership

Exercise | Q 8 | Page 228

Select the most appropriate answer from the alternatives given below and rewrite the sentence.
An Income and Expenditure Account and a Balance sheet is prepared as final accounts by a ______________ .

  • ‘Not for Profit’ Concern

  • Trading Concern

  • Commercial Organisation

  • Public Limited Company

Exercise | Q 9 | Page 228

Select the most appropriate answer from the alternatives given below and rewrite the sentence.
Non-Cash items are not recorded in_____________ 

  •  Income and Expenditure

  • Receipt and Payments Accounts

  • Balance Sheet

  • Profit and Loss Account

Exercise | Q 10 | Page 228

Select the most appropriate answer from the alternatives given below and rewrite the sentence.
In case of non trading concern the excess of assets over liabilities is termed as _____________.

  •  surplus

  • deficit

  •  capital fund

  • loan

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

Exercise | Q 1 | Page 228

State whether the following statement is True or False.
‘Not for Profit’ concerns do not have profit motive.

  • True

  • False

Exercise | Q 2 | Page 228

State whether the following statement is True or False.
‘Not for Profit’ concerns concentrate their efforts on maximizing their profit.

  • True

  • False

Exercise | Q 3 | Page 228

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

  • True

  • False

Exercise | Q 4 | Page 228

State whether the following statement is True or False.
Charitable Institutions prepare Profit and Loss Account, at the end of every financial year.

  • True

  • False

Exercise | Q 5 | Page 228

State whether the following statement is True or False.
There is no difference between Receipts and Payment Account and Income and Expenditure Account.

  • True

  • False

Exercise | Q 6 | Page 228

State whether the following statement is True or False.
All receipts are the items of revenue income.

  • True

  • False

Exercise | Q 7 | Page 228

State whether the following statement is True or False.
Income and expenditure account, prepared by ‘Not for Profit’ concerns, must be accompanied by balance sheet.

  • True

  • False

Exercise | Q 8 | Page 228

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.

  • True

  • False

Exercise | Q 9 | Page 228

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

  • True

  • False

Exercise | Q 10 | Page 228

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

  • True

  • False

Chapter 7: Accounts of 'Not For Profit' Concerns Exercise Exercise solutions [Pages 228 - 235]

Exercise | Q 1 | Page 228

(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. -
Exercise | Q 2 | Page 229

                             (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.

Exercise | Q 3 | Page 229

(Presentation of Subscriptions only)
With the information given below regarding ‘Subscription’ give accounting effects of it in the Final Accounts of a ‘Not for Profit’ concern.
    Receipts and Payments Account for year ending on 31-03-2013
Dr.                                                                                                          Cr.

Receipts

Amount (Rs.)

Amount (Rs.)

Payments Amount (Rs.) Amount (Rs.)
To subscriptions received   487,500      

Additional Information:
• Subscription received during the year, includes
• Subscriptions received for 2011-2012 Rs 17,500 and for 2013-2014 Rs 15,000
• There are 500 members of the concern and each member pays Rs 1,000 as annual subscription.
• During the year 2011-2012 subscription received for the year 2012-2013 was Rs 25,000.

Exercise | Q 4 | Page 230

(Simple Problem)
With the information given below, prepare Income and Expenditure Account and Balance sheet of Sudarshan charitable Organisation 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   40,000 By Salaries   18,000
Cash in Hand 500 By Printing and stationery   20,000
Cash at Bank 39,500 By Charity Expenses   20,000
To Subscriptions
(includes Rs 5,500 for 2009-10)
  81,000 By Investments   60,000
Interest on Investments   1,800 By Office expenses   2,000
To Sale of Furniture
(Book Value Rs 10,000)
  8,000 By Balance c/d
Cash in Hand
700  
      Cash at Bank 10,100  
    130,800     130,800

Additional Information:
1) There are Rs 800 members, paying annual subscription Rs 100 each.
2) Outstanding salary Rs 2,000.
3) The Assets on 01-04-2012 were as following:
Furniture Rs 40,000, Investment Rs 20,000, Land Rs 1,00,000
4) On 01-04-2012 Capital Fund was Rs 2,05,500

Exercise | Q 5 | Page 230

(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.

Exercise | Q 6 | Page 231

(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.   

Exercise | Q 7 | Page 232

From the following information supplied to you, prepare Income and Expenditure Account for the year ending on 31/03/2013 and Balance Sheet as on that date for Suryodaya Club, Nasik.
                        Balance Sheet as on 01/04/2012

Liabilities

Amount (Rs.)

Assets
Amount (Rs.)
Capital Fund 50,000

Land

60,000
Bank Overdraft 35,000 Outstanding Subscriptions 5,000
Outstanding Salary 2,000 Prepaid Insurance Premium 2,500
    Cash in Hand 9,500
    Furniture 10,000
  87,000   87,000

     Receipts and Payments Account for the year ending 31.03.2013
Dr.                                                                                                         Cr.

Receipts
Amount (Rs.)
Payments Amount (Rs.) Amount (Rs.)
To Balance b/d 9,500 By Bank Overdraft (Repaid)   35,000
To Subscription 95,000 By Salary   12,500
To Admission Fees 7,500 By Insurance Premium   8,000
   

By Interest

  1,700
    By Miscellaneous Expenses   4,400
    By Furniture   20,000
    By Balance c/d
Cash in Hand
Cash at Bank
5,400
25,000
30,400
  112,000     112,000

Adjustments:
1) Subscriptions received, includes Rs 3,000 for 2011-2012 and Outstanding Subscriptions for 2012-2013 was Rs 8,000.
2) Salary Paid includes Rs 2,000 Paid for last year
3) On 31/03/2013, Prepaid Insurance Premium was Rs 3,000
4) Admissions Fees are to be capitalized.
5) Depreciate Furniture by Rs 2,000.

Exercise | Q 8 | Page 232

(Accounting of a School)
From the information given below of Jeevan Vikas Vidyalaya Khamgaon, You are required to prepare, Income and Expenditure Account and Balance Sheet for the year ending on 31.03.2011.
                                Balance Sheet as at 01.04.2010

Liabilities
Amount (Rs.)
Assets

Amount (Rs.)

Capital Fund 499,100 Library Books 115,500
Loan 500,000 Laboratory Equipments 125,000
    Furniture 110,000
    Building 625,000
    Cash in Hand 3,500
    Cash at Bank 20,100
  999,100   999,100

 Receipts and Payments Account for the year ending 31.03.2011
Dr.                                                                                                      Cr.

Receipts
Amount
(Rs.)
Payments
Amount
(Rs.)
Amount (Rs.)
To Balance b/d   By Salaries   625,200
Cash in Hand 3,500 By Purchases
i. Laboratory Equipments
ii. Library Books
iii. Furniture
10,000
50,000
20,000
80,000
Cash at Bank 20,100 By Sundry Expenses   10,000
To Tuition Fees 367,500 By Printing and Stationery   35,800
To Term Fees 35,000 By Annual Social
Gathering Expenses
  18,000
To Admission Fees 30,600 By Balance c/d
Cash in Hand
Cash at Bank
  4,000
35,000
To Government Grant (Revenue) 350,000      
To Sundry Receipts 1,300      
  808,000     808,000

Adjustments:
1) Tuition Fees Outstanding Rs 13,500
2) Outstanding Interest on Loan Rs 60,000
3) Entire admission Fees are to be Capitalized.
4) Depreciation is to be written off as under:

Library Books                 Rs 50,000 Furniture                        Rs 30,000
Laboratory Equipment   Rs 20,000 Building                         Rs 30,000
Exercise | Q 9 | Page 233

(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.

Exercise | Q 10 | Page 234

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
(Rs.)

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.

Exercise | Q 11 | Page 235

From the following Receipts and Payments Account of Nanasaheb Patil Engineering College, Faizpur for the year ending 31 March 2013 and additional information, Prepare Income and Expenditure Account for year ending 31/03/2013 and a Balance Sheet as on that date.

Receipts and Payments Account for the year ending 31.03.2013

Dr.                                                                                                      Cr.

Receipts
Amount (Rs.)
Payments
Amount (Rs.)
To Balance b/d
Cash in Hand
Cash at Bank
15,950
100,070

By Salaries to
• Teaching Staff
• Office Staff

   850,500
    181,000
To Interest 51,000

By Electricity

51,900  
To Subscriptions 25,800 By Books 57,800
To Life Membership Fees 20,500 By Furniture 45,000
To Donations 636000 By Stationery 19,950
To tuition Fees 1120,000 By Fixed Deposit 31/03/2013 750,000
To Term Fees 200,900 By Balance c/d
Cash in Hand
Cash at Bank
13500
262,500
To Admission Fees 55,000    
To Sundry Receipts 6,930    
  2232,150   2232,150

Additional Information:

1)

Particulars

01/04/2012

31/03/2013
Books

5,50,000

5,50,000
Furniture 2,15,000 200,000
Building Fund 935,000 ?
Fixed Deposits 800,000 ?
Capital Fund 746,020 ?

2) 50% of Donations are for Building Fund and the balance is to be treated as revenue income.
3) Outstanding Subscription Rs 4,200.
4) Life Membership Fees are to be capitalized.

Chapter 7: Accounts of 'Not For Profit' Concerns

Exercise

Micheal Vaz Micheal Vaz Class 12 Accounts - Book Keeping and Accountancy

Micheal Vaz Class 12 Accounts - Book Keeping and Accountancy - Shaalaa.com

Micheal Vaz solutions for 12th Board Exam Book Keeping and Accountancy chapter 7 - Accounts of 'Not For Profit' Concerns

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Concepts covered in 12th Board Exam Book Keeping and Accountancy chapter 7 Accounts of 'Not For Profit' Concerns are Not for Profit Concerns, Features of "Not for Profit" Concerns., Meaning of Receipts and Payments Account, Feature of Receipts and Payments Account, Effects of Adjustments-Outstanding Expenses, Additional Information - Prepaid Expenses of the Current and Previous Year, Effects of Adjustments-Accrued Income, Effects of Adjustments-Income Received in Advance, Additional Information - Subscription Received in Advance, Additional Information - Subscription Outstanding of the Current and Previous Year, Effects of Adjustments-Depreciation, Additional Information - Capitalisation of Entrance Fees, Additional Information - Creation of Special Funds Out of Donations, Additional Information - Stock of Stationery, Additional Information - Opening Balances of Assets and Liabilities, Preparation of Income and Expenditure Account and Closing Balance Sheet, Accounts of “Not for Profit” Concerns Examples and Solutions.

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