Important definition for 2nd year college student of Accounts & Commerce.

1. What is meant by non-trading concern.

 Ans: Institutions or individuals with activities other than trade are known as Non-trading concern.

2. What is receipts and payments account.

 Ans: A receipt and payment account is a summary of cash book.

3. What is income and expenditure account.

 Ans: This account shows the deficit or surplus of non-trading concern.

4. What is difference between receipts and payment a/c and income and expenditure a/c.

 Ans: Receipts and payment account is the summary of cash book, whereas income and expenditure a/c is prepared for calculate surplus or deficit of non-trading concern.

5. What is capital fund.

  Ans: The difference between opening assets and opening liabilities is called capital fund.

6. Define Legacy.

 Ans: The amount or property received as per the will of deceased person called legacy.

7. What is Entrance fee/Admission fee.

 Ans: The amount received from the new members of NON-TRADING concern at the time of admission is called Entrance/Admission fee.

8. What is surplus.

 Ans: When the income of non-trading concern are more than the expenditure, this is called surplus.

9. What is Deficit/deficiency.

 Ans: Excess of expenditure over Income of non-trading concern is called Deficit.

10. What is honorarium.

 Ans:  The amount paid to the person who is not the employee of the organization is called honorarium.

11. What is subscription.

 Ans:  The amount received from the members of non-trading concern, monthly or annually is called subscription.

12. What is special subscription.

 Ans:  Amount received from members for some particular purpose other than the regular subscription is called special subscription.

13. What is life membership fee.

  Ans:  Any amount received from members in lump sum for the whole life is called life membership fee.

14. What is Donation.

 Ans:  The amount or things received by a non-trading concern as gift are called donation.