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Principles-of-accounting Chapters

12th Class Chapter 2 Principles of accounting Short Questions

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Question: 1
Define legacy?
Answer: 1
1-19
Legacy refer to the property received by the virtue of will of a person after his death,Acquisition of such property by an institution is regarded as capital receipt.
Example: Sufyan left his property for edhi foundation.
Question: 2
What is difference between trading concern and non trading concern?
Answer: 2
2-19
Trading Concern:Trading concern are that,which buy or manufacture and sells goods their primary objects is to earn profit.
Example : Fan,Rice mills etc.
Question: 3
What is meant by receipts and payments account?
Answer: 3
3-19
A receipts and payments accounts is a summarized cash book for a given period,It is prepared without and distinction between capital and revenue items.
Question: 4
What are the source of income of non trading company?
Answer: 4
4-19
The source of income of non trading concern are given below
  1. Donations
  2. Subscription
  3. Admission fee
  4. Legacy
  5. Life membership fee
Question: 5
Define Deficit.
Answer: 5
5-19
Deficit is the excess of expenditure over income in case of non trading concern.It is also known as deficit balance.
We use formula to calculate deficits is given as below:
Deficit=Expenditure -income
Question: 6
What is meant by surplus?
Answer: 6
6-19
SUrplus is the excess of income over expenditure in case of non trading concerns ,It is also known as Surplus Balance
We use formula to calculate surplus is given as below
Surplus=Income-Expenditure.
Question: 7
Define admission fee.
Answer: 7
7-19
Admission is the amount which is paid by the new member at the time of admission to subscription,Only a new member pays to become a new member of the organization.
Example : Asad paid subscription at the time of admission.
Question: 8
Define subscription.
Answer: 8
8-19
Subscription is the amount received from the member of the organization monthly or annual as per rule.
Example : Adnan give subscribe Rs 5000/- to club at first january 2016.
Question: 9
What is special subscription ?
Answer: 9
9-19
Special subscription is an additional subscription.It is collected from member over and above the regular subscription.It is used for some special purpose.Example:
Construction of club building ,charities to poor awarding of price etc.
Question: 10
What is economic and expenditure account?
Answer: 10
10-19
The economic and expenditure account is an account through which the surplus of deficit of a non trading organization is ascertained.
Question: 11
Define non profit making organization.
Answer: 11
11-19
Non-Profit making organization or non trading concern because which do not buy or manufacture and sell goods,Their primary objects is not to earn profit,Their object is to do good to society through welfare activities,
Example : Clubs,Hospitals ,Schools,Libraries etc.
Question: 12
Write down three features of the receipts and payments accounts.
Answer: 12
12-19
Three features of receipts and payments account is given below:
  1. It is closing balance indicaties closing cash is hand and closing cash at bank.
  2. It is prepared on the last day of the accounting year.
  3. Only cash transaction are recorded here.
Question: 13
Write down the major statement prepared by non trading company/
Answer: 13
13-19
The major statement prepared by non trading concerns are given as below:
  1. Receipts and payments account
  2. income and expenditure account
  3. Balance sheet
Question: 14
What is meant by donation in reference to non trading company?
Answer: 14
14-19
Donation is the amount,which is received from member and general public by way of gift,Itis to be treated as capital of revenue depends upon the purpose for which the donation is collected.
Question: 15
What is meant by capital fund?
Answer: 15
15-19
Capital fund is an excess of total assets over total external liabilities of a non profit seeking organization ,Capital fund is also knows as General Fund or accumulated fund or surplus fund,
We use the formula to calculate fund is given as below
Capital fund=assets-liabilities
Question: 16
What is difference between receipts and payments accounts and income and expenditure account ?
Answer: 16
16-19
Receipts and payment accounts:
  1. Only cash transaction are recorded here.
  2. Its balance can never be credit
  3. It is outside the double entry system
Question: 17
What is difference between cash book,receipts and payment account?
Answer: 17
17-19
Cash Book:
  1. It is a book account within double entry system.
  2. Each entry is followed by narration.
  3. Ledger reference recorded here.
Question: 18
What is meant by life time membership fee in reference to a non trading concern?
Answer: 18
18-19
Life membership fee is amount which is paid by member lump sum to become a life member of organization.It is paid only one time in life of organization to become life member.
Example: Amir pay lump sum amount to become life member of organization.
Question: 19
What is meant by honorarium?
Answer: 19
19-19
Honorarium is the amount paid to person who may be invited to deliver lectures or artists may be invited to give their performance by a club,
Example : ALex club pay Rs 2000000 as honorarium to Taylor swift and zayn malik for song.

12th Class Principles-of-accounting Chapters Short Questions