Q.From the following details, prepare the Receipts and Payments Account of the NGO's club for the year ending 31st March 2021.

• Opening Balance of Cash - Rs. 3,000
• Opening Bank Balance - Rs. 9,000
• Subscriptions collected - Rs. 16,000
• Entertainment show receipts - Rs. 8,000
• Entrance fee received - Rs. 4,000
• Computer purchased - Rs. 6,000
• Tournament expenses - Rs. 6,000
• Entertainment show - Rs. 3,600
• Paid for Magazines - Rs. 2,400
• Salaries paid - Rs. 2,400
• Rent paid - Rs. 8,000
• Cash in hand at close - Rs. 3,600

Showing the 12 most recent of 56 on this concept.

1. CBSE 2025Set ANNUAL1 markMCQ
   Q.Legacies should be treated as (A) Liability (B) Revenue Receipt (C) Asset (D) Income

   ›Reveal solutionSolution

   A legacy is a donation received under a will; it is a capital receipt, capitalised by adding to the Capital Fund, which appears on the liabilities side of the Balance Sheet. Hence the answer is (A) Liability.

   For Bihar Class-12 (BSEB Inter) commerce candidates, in Not-for-Profit Organisation accounting:

   • A legacy is an amount received by the organisation as per the will of a deceased person.
   • Being non-recurring and of a capital nature, the usual treatment is to capitalise it by adding it to the Capital Fund. …

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2. CBSE 2025Set ANNUAL1 markMCQ
   Q.All receipts of capital nature are shown in (A) Income and Expenditure A/c (B) Balance Sheet (C) Profit and Loss A/c (D) Cash Flow Statement

   ›Reveal solutionSolution

   In a Not-for-Profit Organisation, capital receipts do not belong to the Income and Expenditure Account; they are capitalised and shown on the liabilities side of the Balance Sheet. Hence the answer is (B) Balance Sheet.

   For the BSEB Inter / Bihar Class-12 Accountancy syllabus:

   • The Income and Expenditure Account records only revenue items of the current period (like a profit and loss account). …

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3. CBSE 2025Set ANNUAL1 markMCQ
   Q.Subscription received in advance is (A) Asset (B) Income (C) Expense (D) Liability

   ›Reveal solutionSolution

   Subscription received in advance is income of a future period received early, so the organisation owes membership/service for it; it is a current liability shown in the Balance Sheet. Hence the answer is (D) Liability.

   For Bihar Class-12 (BSEB Inter) commerce candidates, in Not-for-Profit Organisation accounting, subscription is matched to the period it relates to:

   • Only the subscription relating to the current year is credited to the Income and Expenditure Account. …

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4. CBSE 2025Set ANNUAL1 markMCQ
   Q.Which of the following is a capital receipt ? (A) Subscription (B) Donation (C) Building fund (D) Interest on fixed deposit

   ›Reveal solutionSolution

   Building fund is a capital receipt, so the answer is (C).

   In not-for-profit organisation accounting, capital receipts are amounts received for a specific long-term purpose or that create a fund, whereas revenue receipts are recurring incomes of the year.

   • Building Fund (C) is a specific-purpose fund; the contribution is capitalised and shown on the liabilities/fund side of the balance sheet — a capital receipt.
   • Subscription (A) is the regular annual income of members — a revenue receipt. …

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5. CBSE 2025Set ANNUAL1 markMCQ
   Q.The surplus / deficit of not-for-profit organisation is ascertained by (A) Income & Expenditure A/c (B) Receipts and Payments A/c (C) Profit & Loss A/c (D) Income Statement

   ›Reveal solutionSolution

   The surplus or deficit of an NPO is ascertained through the Income and Expenditure Account, so the answer is (A).

   A not-for-profit organisation does not prepare a Profit and Loss Account. Instead it prepares an Income and Expenditure Account on an accrual basis, recording all revenue incomes and revenue expenses of the current year.

   • The excess of income over expenditure is a surplus; the excess of expenditure over income is a deficit.
   • The Receipts and Payments Account (B) is only a summary of cash transactions and does not show surplus/deficit. …

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6. CBSE 2025Set ANNUAL1 markMCQ
   Q.Which of the following is a revenue expenditure ? (A) Purchase of furniture (B) Payment of salaries (C) Construction of building (D) Purchase of machinery

   ›Reveal solutionSolution

   Payment of salaries is a revenue expenditure, so the answer is (B).

   Revenue expenditure is incurred for the day-to-day running of an organisation and its benefit is used up within the accounting year. Capital expenditure, by contrast, is spent on acquiring long-term assets whose benefit lasts several years.

   • Payment of salaries (B) is a recurring running cost — revenue expenditure. …

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7. CBSE 2025Set ANNUAL1 markMCQ
   Q.Donations received for specific purpose are treated as (A) Asset (B) Liability (C) Capital receipt (D) Expense

   ›Reveal solutionSolution

   Donations received for a specific purpose are treated as a capital receipt (specific fund), so the answer is (C).

   When a not-for-profit organisation receives a donation earmarked for a particular purpose (e.g. a prize fund, tournament fund, building fund), it cannot be spent on general activities.

   • Such a donation is capitalised and shown as a specific fund on the liabilities/fund side of the balance sheet, i.e. it is a capital receipt — option (C).
   • It is not treated as revenue income in the Income and Expenditure Account (that applies to general donations). …

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8. CBSE 2025Set ANNUAL1 markMCQ
   Q.The summary of cash and bank transaction shows (A) Cash A/c (B) Bank A/c (C) Receipts and Payments A/c (D) Bank overdraft

   ›Reveal solutionSolution

   The summary of cash and bank transactions is the Receipts and Payments Account, so the answer is (C).

   A not-for-profit organisation prepares a Receipts and Payments Account at the year end. It is a real account that summarises all cash and bank receipts (debit side) and all cash and bank payments (credit side), regardless of whether they relate to the current, previous or next year, and whether capital or revenue.

   …

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9. CBSE 2025Set ANNUAL1 markMCQ
   Q.Payment of honorarium to Secretary is treated as (A) Capital expenditure (B) Revenue expenditure (C) An income (D) All of these

   ›Reveal solutionSolution

   Payment of honorarium to the Secretary is a revenue expenditure, so the answer is (B).

   An honorarium is a token remuneration paid for services rendered (here, to the Secretary). It is a recurring operating expense whose benefit is consumed within the year, so it is a revenue expenditure and is debited to the Income and Expenditure Account.

   • It is not a capital expenditure (A) because it does not create any long-term asset. …

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10. CBSE 2025Set ANNUAL1 markMCQ
    Q.Which of the following shows transactions related to one year ? (A) Receipts and Payments A/c (B) Income & Expenditure A/c (C) Balance Sheet (D) None of these

    ›Reveal solutionSolution

    The Income and Expenditure Account shows transactions relating to one (current) year, so the answer is (B).

    The Income and Expenditure Account is prepared on an accrual basis and includes only the revenue incomes and revenue expenses that belong to the current accounting year — amounts relating to past or future years are excluded.

    • The Receipts and Payments Account (A) records all cash transactions irrespective of the year to which they relate, so it is not restricted to one year. …

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11. CBSE 2025Set ANNUAL1 markMCQ
    Q.Entrance fee is treated as (A) Capital Receipt (B) Revenue Receipt (C) Donation (D) Subscription

    ›Reveal solutionSolution

    Entrance fee is treated as a capital receipt, so the answer is (A).

    Entrance fee (admission fee) is the amount paid once by a new member at the time of joining a not-for-profit organisation. Because it is a non-recurring receipt of a substantial, one-time nature, the BSEB Inter / Bihar Class-12 answer treats it as a capital receipt and adds it to the Capital/General Fund on the liabilities side.

    • It is not treated here as a recurring revenue receipt (B). …

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12. CBSE 2025Set ANNUAL1 markMCQ
    Q.What is used to prepare the opening Balance Sheet ? (A) Income and Expenditure A/c (B) Receipts & Payments A/c (C) Cash A/c (D) Capital A/c

    ›Reveal solutionSolution

    The opening balance sheet is prepared using the Receipts and Payments Account (its opening cash/bank balance and other opening items), so the answer is (B).

    To compute the opening Capital/General Fund, an opening balance sheet is prepared at the beginning of the year. The opening cash and bank balances come directly from the opening balance of the Receipts and Payments Account, which are combined with other opening assets and liabilities given in the question.

    …

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