Skip to content

CMA Intermediate · Financial Accounting · Financial Statements of Not-for-Profit Organisations

Which of the following is a characteristic of the Receipts and Payments Account of a not-for-profit organisation?

The Receipts and Payments Account summarises actual cash and bank receipts and payments, starting with opening balances and ending with closing balances. It is a real account covering both capital and revenue items on a cash basis, and it does not determine surplus or deficit.

  1. AIt is a nominal account that records only revenue items on accrual basis
  2. BIt is a summary of cash and bank transactions that begins and ends with cash and bank balancesCorrect
  3. CIt excludes receipts and payments of a capital nature
  4. DIt shows the surplus or deficit for the year as its balancing figure

Explanation

A Receipts and Payments Account is a real account summarising actual cash and bank transactions. It starts with opening cash and bank balances and ends with closing balances. It includes both capital and revenue items and does not compute surplus or deficit, so the other options are wrong.

Did you get it right without looking?

One question tells you little. A timed set on Financial Statements of Not-for-Profit Organisations shows your real accuracy, how long you take and where you lose marks.

Practise Financial Statements of Not-for-Profit OrganisationsFree diagnostic mock

More Financial Statements of Not-for-Profit Organisations questions