Accountancy Part AAccounts for Non Profit Organsiation

Select the item that does not appear in the receipt and payment accou…

Select the item that does not appear in the receipt and payment account of a not-for-profit organisation.

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → Loss on sale of furniture

The Receipt and Payment Account is a summary of the cash book: it shows only actual cash and bank receipts and payments.

Cash received from the sale of machinery, subscriptions received and cash paid to creditors are all cash transactions, so all three appear in it.

A loss on sale of furniture is not a flow of cash. Only the sale price received is a receipt; the loss (book value less sale price) is worked out separately and shown in the Income and Expenditure Account.

Note: This question is from the pre-rationalised NCERT book. The topic is not there in the latest NCERT book (2026-27), but it is still in the CUET 2026 syllabus, so do not skip it.

NCERT (Pre-rationalised edition):
Receipt and Payment Account – “It is prepared at the end of the accounting year on the basis of cash receipts and cash payments recorded in the cash book. It is a summary of cash and bank transactions under various heads.”

NCERT (Pre-rationalised edition):
Steps in the Preparation of Income and Expenditure Account – “… 6. Consider the following items not appearing in the Receipt and Payment Account that need to be taken into account for determining the surplus/ deficit for the current year : (a) Depreciation of fixed assets. (b) Provision for doubtful debts, if required. (c) Profit or loss on sale of fixed assets.”