Showing the 12 most recent of 13 on this concept.

1. CBSE 2026Set ANNUAL1 mark
   Q.Complete the table:

   Income	Expenditure	Deficit
   25,000	..........	2,000

   ›Reveal solutionSolution

   Expenditure = ₹27,000. A deficit is the excess of expenditure over income, so Expenditure = Income + Deficit.

   Method

   The Income and Expenditure Account of a not-for-profit concern shows a deficit when total expenditure exceeds total income. Therefore:

   Deficit = Expenditure − Income

   Re-arranging: Expenditure = Income + Deficit

   Item	Amount (₹)
   Income	25,000
   Add: Deficit (excess of expenditure)	2,000
   Expenditure	27,000

   ✓Final answer

   Expenditure = ₹25,000 + ₹2,000 = ₹27,000

2. CBSE 2026Set ANNUAL1 mark
   Q.Write the word/phrase/term, which can substitute the following sentence. An account which records only revenue items in the case of a not-for-profit concern.

   ›Reveal solutionSolution

   The account that records only revenue items of a not-for-profit concern is the Income and Expenditure Account.

   A not-for-profit concern (club, school, hospital, trust) does not prepare a Profit and Loss Account. Instead it prepares an Income and Expenditure Account, which is a nominal account resembling a Profit and Loss Account:

   • It is prepared on the accrual basis and includes only revenue (recurring, current-period) incomes and expenses.

   • Capital receipts and capital expenditure are excluded (they go to the Balance Sheet).

   • Its balancing figure is a Surplus (excess of income over expenditure) or a Deficit (excess of expenditure over income), which is added to / deducted from the Capital Fund.

   ✓Final answer

   Income and Expenditure Account.

3. CBSE 2025Set ANNUAL1 markMCQ
   Q.Excess of income over expenditure in ‘Not for Profit Concern’ is termed as ______.

   (a) Deficit

   (b) Profit

   (c) Surplus

   (d) Loss

   ›Reveal solutionSolution

   The answer is Surplus.

   A Not for Profit Concern (club, school, hospital, trust) does not trade to earn profit, so it prepares an Income and Expenditure Account rather than a Profit and Loss Account. The balancing figure of this account is described in special terms:

   Situation	Term used
   Income greater than Expenditure	Surplus
   Expenditure greater than Income	Deficit

   Since the words profit and loss are reserved for trading (profit-seeking) concerns, the excess of income over expenditure of a Not for Profit concern is called a Surplus, which is added to the Capital Fund.

   ✓Final answer

   Excess of income over expenditure in a Not for Profit Concern is termed Surplus.

4. CBSE 2025Set ANNUAL1 mark
   Q.Income and Expenditure Account is a ______ account.

   ›Reveal solutionSolution

   The answer is Nominal.

   Accounts are classified as Personal, Real or Nominal. Nominal accounts deal with incomes, gains, expenses and losses. The Income and Expenditure Account of a Not for Profit concern records:

   Debit side	Credit side
   Revenue expenses & losses	Revenue incomes & gains

   Because it summarises incomes and expenses of the period (and its balance is a Surplus or Deficit), it follows the nature and rules of a nominal account — it is the Not for Profit equivalent of a Profit and Loss Account.

   ✓Final answer

   Income and Expenditure Account is a Nominal account.

5. CBSE 2025Set MARCH1 markMCQ
   Q.Income and Expenditure account is a :

   (a) Representative Personal A/c

   (b) Real A/c

   (c) Personal A/c

   (d) Nominal A/c

   ›Reveal solutionSolution

   The Income and Expenditure Account is a Nominal Account.

   The Income and Expenditure Account is prepared by not-for-profit organisations (TN HSC Commerce) to record all revenue incomes and revenue expenses relating to the current period, ending in a surplus or deficit. Because it deals only with items of income and expense — not with persons or property — it falls under the class of nominal accounts (debit all expenses/losses, credit all incomes/gains).

   ✓Final answer

   Option (d) Nominal A/c — the nature of the Income and Expenditure Account.

6. CBSE 2024Set ANNUAL1 markMCQ
   Q.Find the odd one:

   (a) Audit Fees

   (b) Insurance

   (c) Medical Expenses

   (d) Sundry Receipts

   ›Reveal solutionSolution

   Three items are expenses; one is an income/receipt. The income item is the odd one.

   In the Income and Expenditure Account of a not-for-profit concern the items fall on opposite sides:

   Item	Nature	Side of I&E A/c
   Audit Fees	Expense	Debit (Expenditure)
   Insurance	Expense	Debit (Expenditure)
   Medical Expenses	Expense	Debit (Expenditure)
   Sundry Receipts	Income	Credit (Income)

   Audit fees, insurance and medical expenses are all amounts spent (revenue expenditure). Sundry Receipts is money received (a revenue income). Being the only income among expenses, it is the odd one.

   ✓Final answer

   Sundry Receipts is the odd one — the other three are expenses, while Sundry Receipts is an income.

7. CBSE 2024Set ANNUAL1 markMCQ
   Q.Income and Expenditure Account is a ________ Account.

   (a) Capital account

   (b) Real account

   (c) Personal account

   (d) Nominal account

   ›Reveal solutionSolution

   The Income and Expenditure Account of a not-for-profit concern is a Nominal Account — it is the equivalent of a Profit and Loss Account and records only revenue items.

   A not-for-profit concern prepares an Income and Expenditure Account to find its surplus (excess of income over expenditure) or deficit. Because it deals only with revenue incomes and revenue expenses of the current year, it follows the golden rule of nominal accounts:

   • Debit all expenses and losses.
   • Credit all incomes and gains.

   Capital receipts, capital payments and assets/liabilities never enter this account (they go to the Balance Sheet). Hence it is neither a Real account (assets) nor a Personal account, but a Nominal account.

   ✓Final answer

   Nominal account.

8. CBSE 2024Set ANNUAL1 mark
   Q.Write the word/phrase/term which can substitute of the following statement: The debit balance of Income and Expenditure Account.

   ›Reveal solutionSolution

   The debit balance of the Income and Expenditure Account represents the Deficit — the excess of expenditure over income.

   At the year-end the Income and Expenditure Account is balanced:

   • If income exceeds expenditure, the credit balance is a Surplus.
   • If expenditure exceeds income, the debit balance is a Deficit.

   The deficit is deducted from the Capital Fund in the Balance Sheet.

   ✓Final answer

   Deficit (excess of expenditure over income).

9. CBSE 2024Set MARCH1 markMCQ
   Q.Income and Expenditure Account is prepared to find out :

   (a) Surplus or deficit

   (b) Profit or loss

   (c) Financial position

   (d) Cash and Bank balance

   ›Reveal solutionSolution

   The Income and Expenditure Account is prepared to find the surplus or deficit of a not-for-profit organisation — option (a).

   Not-for-profit organisations (clubs, societies, hospitals, schools) do not trade to earn profit, so they do not prepare a Profit and Loss Account. Instead they prepare an Income and Expenditure Account, which is a nominal account maintained on the accrual basis:

   • All revenue incomes of the year (whether received or not) are credited.
   • All revenue expenses of the year (whether paid or not) are debited.
   • The balancing figure is a surplus (income exceeds expenditure) or a deficit (expenditure exceeds income).

   It does not report profit or loss (that is a trading concern's term), nor the financial position (that is the Balance Sheet), nor cash and bank balance (that is the Receipts and Payments Account). Hence the correct purpose is to ascertain surplus or deficit.

   ✓Final answer

   Option (a) Surplus or deficit. The Income and Expenditure Account matches a year's incomes against its expenses on the accrual basis; its balance is the surplus or deficit for the year.

10. CBSE 2023Set ANNUAL1 markMCQ
    Q.Income and Expenditure Account is a ________ Account.

    (a) Capital

    (b) Real

    (c) Personal

    (d) Nominal

    ›Reveal solutionSolution

    The correct option is Nominal. The Income and Expenditure Account is prepared by a not-for-profit concern on the same lines as a Profit & Loss Account; it is a Nominal account that records all revenue incomes and expenses of the year and reveals the surplus (excess of income over expenditure) or deficit.

    Explanation

    • Nominal accounts are accounts of incomes, gains, expenses and losses.

    • The Income and Expenditure Account is credited with all revenue incomes and debited with all revenue expenses relating to the current year (on accrual basis).

    • Its closing balance is transferred to the Capital Fund as surplus or deficit, exactly the way a Nominal account is closed.

    ✓Final answer

    Nominal — the Income and Expenditure Account is a nominal account.

11. CBSE 2022Set ANNUAL1 mark
    Q.Aurangabad University prepares _______ Account instead of Profit and Loss Account.

    ›Reveal solutionSolution

    The blank is Income and Expenditure Account.

    A university, like a club or a charitable trust, is a not-for-profit organisation whose objective is service, not profit. Such concerns do not prepare a Profit and Loss Account; instead they prepare an Income and Expenditure Account, which records all revenue incomes and revenue expenditures of the period on an accrual basis. Its balancing figure is a surplus (excess of income over expenditure) or a deficit, not a profit or loss.

    ✓Final answer

    Aurangabad University prepares an Income and Expenditure Account instead of a Profit and Loss Account.

12. CBSE 2022Set MARCH1 markMCQ
    Q.Income and Expenditure Account is prepared to find out :

    (a) surplus or deficit

    (b) profit or loss

    (c) financial position

    (d) cash and bank balance

    ›Reveal solutionSolution

    The Income and Expenditure Account reveals the surplus or deficit of a not-for-profit organisation.

    In the Tamil Nadu HSC Class-12 Accountancy syllabus, not-for-profit organisations (clubs, societies, hospitals) do not aim to earn profit, so they prepare an Income and Expenditure Account instead of a Profit and Loss Account. It records only revenue incomes and revenue expenditures of the current period on an accrual basis.

    • Excess of income over expenditure = surplus.
    • Excess of expenditure over income = deficit.

    The term profit/loss (option b) is used by trading concerns; financial position (option c) is shown by the Balance Sheet; and cash and bank balance (option d) comes from the Receipts and Payments Account.

    ✓Final answer

    Option (a) surplus or deficit.