Subscription received in advance for a non-profit organisation is shown in the Balance Sheet as: MCQ with Answer and Explanation

Subscription received in advance for a non-profit organisation is shown in the Balance Sheet as:
A. Income
B. Liability
C. Expenditure
D. Asset
Answer: Option B
Solution (By JKSSB Mock Tests)
It is a liability because it pertains to the future period.

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Practice More Accountancy and Book Keeping Questions

Question #1
S1: Cheques issued but not presented for payment increase the bank balance as per the pass book. S2: Direct deposit by a customer into the bank account decreases the cash book balance. Which statement(s) is/are correct?
A. S2 only
B. S1 only
C. Both S1 and S2
D. Neither S1 nor S2

Correct Answer: Option D


Explanation:
Cheques issued but not presented decrease the pass book balance, not increase it. Direct deposit by a customer increases the pass book balance but has no immediate effect on the cash book until intimated. Both are incorrect.

Question #2
A sum of ₹10,000 received as rent is credited to:
A. Cash A/c
B. Capital A/c
C. Rent A/c
D. Rent Received A/c

Correct Answer: Option D


Explanation:
Rent received is income, so Rent Received A/c is credited (nominal account rule: credit incomes).

Question #3
Under the Income Tax Act, the 'TDS' on payment of interest on securities (other than 8% taxable government securities) is governed by which section?
A. Section 194A
B. Section 194
C. Section 194C
D. Section 194J

Correct Answer: Option B


Explanation:
Section 194 of the Income Tax Act mandates TDS on income by way of interest on securities (like debentures, corporate bonds) at the prescribed rates.