Practice Format Of Income And Expenditure Account (10.4.2) - Non-Trading Organisations

Practice: Format of Income and Expenditure Account

Lesson 10.4.2Non-Trading Organisations

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9 questions

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6 sample questions

Question 1.
What does the Income and Expenditure Account summarize?
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Think about what this account represents for financial performance.
Question 2.
What is meant by a surplus?
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Consider what happens to the finances when more is received than spent.
3Question 3.
What is the purpose of the Income and Expenditure Account?
- To show profit
- To detail income and expenses
- To list assets
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Consider what information the account is designed to convey.
4Question 4.
True or False: The Income and Expenditure Account is prepared on a cash basis.
- True
- False
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Review the principles behind how income and expenses are categorized.
Question 5.
An NGO received ₹500,000 in grants, ₹100,000 in donations, and ₹50,000 in interest during the year. It spent ₹450,000 on programs and ₹100,000 on operational costs. Calculate the surplus or deficit.
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Add up incomes and expenditures separately, and then find the difference.
Question 6.
If a non-profit organization has a deficit of ₹30,000 this year but generated a surplus of ₹50,000 last year, what is the cumulative effect on its financial status?
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Consider how previous surpluses and deficits interact to reflect financial health.

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