Q1: 1. Which of the following is a characteristic of a Not for Profit Organisation (NPO)?

• A) Maximize profits
• B) Distribute dividends to shareholders
• C) Operate for charitable purposes
• D) Issue shares to raise capital

Q2: 2. What type of surplus is typically generated by a Not for Profit Organisation?

• A) Profit surplus
• B) Operating surplus
• C) Capital surplus
• D) Donation surplus

Q3: 3. Which financial statement of a Not for Profit Organisation shows the sources and application of funds?

• A) Income Statement
• B) Balance Sheet
• C) Cash Flow Statement
• D) Receipts and Payments Account

Q4: 4. How are donations treated in the accounting records of a Not for Profit Organisation?

• A) Recorded as revenue
• B) Recorded as liabilities
• C) Not recorded at all
• D) Recorded as asset

Q5: 5. Which of the following is NOT a typical source of income for a Not for Profit Organisation?

• A) Membership fees
• B) Sales revenue
• C) Grants and donations
• D) Investment income

Q6: 6. In a Not for Profit Organisation, which account is used to record the surplus generated from operations?

• A) Income Account
• B) Capital Account
• C) General Fund
• D) Accumulated Fund

Q7: 7. How are expenses classified in the financial statements of a Not for Profit Organisation?

• A) Program expenses and fundraising expenses
• B) Variable expenses and fixed expenses
• C) Operating expenses and non-operating expenses
• D) Direct expenses and indirect expenses

Q8: 8. Which of the following statements is true about the accounting treatment of fixed assets in a Not for Profit Organisation?

• A) Fixed assets are depreciated over their useful lives
• B) Fixed assets are revalued annually
• C) Fixed assets are expensed in the year of purchase
• D) Fixed assets are not recorded in the books

Q9: 9. How are grants-in-aid typically accounted for in a Not for Profit Organisation?

• A) Recorded as revenue
• B) Recorded as liabilities
• C) Not recorded at all
• D) Recorded as asset

Q10: 10. Which statement best describes the purpose of the Income and Expenditure Account of a Not for Profit Organisation?

• A) To show the financial position of the organisation
• B) To calculate the surplus or deficit for the period
• C) To provide information on cash flows
• D) To track investments made by the organisation

Q11: 11. How are legacies treated in the accounting records of a Not for Profit Organisation?

• A) Recorded as revenue
• B) Recorded as liabilities
• C) Not recorded at all
• D) Recorded as asset

Q12: 12. Which of the following is a key difference between a Not for Profit Organisation and a for-profit entity?

• A) Not for Profit Organisations cannot generate surplus
• B) Not for Profit Organisations pay taxes on their income
• C) Not for Profit Organisations do not have shareholders
• D) Not for Profit Organisations distribute profits to shareholders

Q13: 13. How are fundraising expenses typically classified in the financial statements of a Not for Profit Organisation?

• A) Administrative expenses
• B) Program expenses
• C) Indirect expenses
• D) Direct expenses

Q14: 14. Which statement is true regarding the accounting treatment of donations received by a Not for Profit Organisation?

• A) Donations are always recorded as revenue
• B) Donations are recorded as liabilities
• C) Donations are not recorded in the books
• D) Donations are recorded as assets

Q15: 15. In a Not for Profit Organisation, what is the purpose of the Accumulated Fund?

• A) To track donations received
• B) To record surplus or deficit over time
• C) To track program expenses
• D) To record investment income

Q16: 16. Which financial statement of a Not for Profit Organisation shows the financial position at a specific point in time?

• A) Income and Expenditure Account
• B) Statement of Affairs
• C) Receipts and Payments Account
• D) Balance Sheet

Q17: 17. How are volunteer services typically accounted for in the financial statements of a Not for Profit Organisation?

• A) Recorded as revenue
• B) Recorded as expenses
• C) Not recorded at all
• D) Recorded as assets

Q18: 18. What is the main purpose of the Receipts and Payments Account of a Not for Profit Organisation?

• A) To show the surplus or deficit for the period
• B) To summarize cash transactions for the period
• C) To calculate taxes payable
• D) To track investments made by the organisation

Q19: 19. How are investments typically classified in the financial statements of a Not for Profit Organisation?

• A) Current assets
• B) Fixed assets
• C) Investments are not recorded in the books
• D) Long-term liabilities

Q20: 20. Which of the following is an example of a Not for Profit Organisation?

• A) Manufacturing company
• B) Retail store
• C) Charity organization
• D) Tech startup

Q21: 21. How are bequests treated in the accounting records of a Not for Profit Organisation?

• A) Recorded as revenue
• B) Recorded as liabilities
• C) Not recorded at all
• D) Recorded as asset

Q22: 22. What is the main objective of a Not for Profit Organisation?

• A) Maximizing shareholder wealth
• B) Generating profits for owners
• C) Providing services to the community
• D) Expanding market share

Q23: 23. Which financial statement of a Not for Profit Organisation shows the surplus or deficit for a specific period?

• A) Balance Sheet
• B) Statement of Cash Flows
• C) Income and Expenditure Account
• D) Statement of Changes in Equity

Q24: 24. How are membership fees typically accounted for in the financial statements of a Not for Profit Organisation?

• A) Recorded as revenue
• B) Recorded as liabilities
• C) Not recorded at all
• D) Recorded as assets

Q25: 25. Which of the following is a key characteristic of Not for Profit Organisations?

• A) Distributing profits to shareholders
• B) Operating solely for profit maximization
• C) Providing services to benefit society
• D) Having shareholders who own the organization