ACCT353 Chapter 10
26. A donor gave $100,000 to a foundation, which is financially related to a nongovernmental, not-for-profit organization. The foundation, which is also a nongovernmental, not-for-profit organization, would record the $100,000 as: A) A Revenue. B) A Liability. C) Either (a) or (b), depending upon the policy of the foundation. D) Neither (a) or (b); the transaction would not be recorded by the foundation.
A) A Revenue.
53. Which of the following would not be an example of a voluntary health and welfare organization? A) A state community college. B) A private mental health facility. C) A family planning agency. D) A food bank.
A) A state community college.
76. How does a for-profit organization record contributions made to a private not-for-profit organization? A) As an expense when originally pledged. B) As a reduction in revenue when pledged. C) As an expense when contributed. D) As a reduction in revenue when contributed.
A) As an expense when originally pledged.
75. How is the receipt of an unconditional pledge to contribute to a private not-for-profit organization recorded? A) As revenue when pledged. B) Not recorded until received. C) As unearned revenue when pledged. D) None of the above.
A) As revenue when pledged.
33. An unconditional pledge of support is properly recorded as Temporarily Restricted Revenue at the time of the pledge. Changes in the present value of the receivable resulting from the passage of time is reported as: A) Contribution revenue. B) Interest income. C) Program revenue. D) None of above is correct.
A) Contribution revenue.
66. The entry to record the expiration of program restrictions includes which of the following? A) Debit Reclassification from Temporarily Restricted Net Assets. B) Credit Performance Expense. C) Debit Reclassification to Unrestricted Net Assets. D) Credit Reclassification from Temporarily Restricted Net Assets.
A) Debit Reclassification from Temporarily Restricted Net Assets.
9. Which of the following is not correct with respect to the reporting of expenses for a private not-for-profit? A) Expenses can be reported in the unrestricted net asset class or restricted net asset class, as appropriate. B) Expenses are reported by function in the Statement of Activities or in the notes. C) The FASB describes functions as either program or supporting. D) Major program classifications should be shown in the Statement of Activities or in the notes.
A) Expenses can be reported in the unrestricted net asset class or restricted net asset class, as appropriate.
20. Which of the following is true regarding the Statement of Activities for nongovernmental, not-for-profit organizations? A) FASB requires that the change in net assets be reported for each of the net asset classes and in total. B) Expenses are reported as unrestricted, temporarily restricted or permanently restricted. C) Both A & B above. D) Neither A nor B above. .
A) FASB requires that the change in net assets be reported for each of the net asset classes and in total.
1. Which organization has standard setting authority over governmentally related not-for-profit organizations, such as hospitals colleges and universities. A) GASB. B) FASB. C) AICPA. D) SEC.
A) GASB.
63. In 2014, Susan tells The Art Museum, a private not-for-profit organization, that she has named the museum in her will. When should the organization recognize the contribution revenue? A) Only after Susan dies and the will is declared valid. B) Ratably over a five year period beginning in 2015. C) All in 2014. D) When the Museum receives the contribution.
A) Only after Susan dies and the will is declared valid.
60. Donors to private not-for-profit entities are primarily concerned with which of the following performance measures? A) Program Expense Ratio. B) Return on Investment. C) Change in Net Assets. D) Ending Unrestricted Net Assets.
A) Program Expense Ratio.
16. If a donor selects a scholarship recipient, and then donates cash to a ballet school to fund that scholarship, the ballet school would: A) Record a liability, as it is merely acting as an agent for the donation. B) Record the donated cash as a contribution. C) Record the scholarship awarded as a reduction of revenue. D) Both B & C.
A) Record a liability, as it is merely acting as an agent for the donation.
25. A donor gave $60,000 to a nongovernmental, not-for-profit charity with instructions that the funds be transferred to Sam Smith, an individual who lost his home in a fire. The not-for-profit would: A) Record the $60,000 cash and credit a liability. B) Record the $60,000 cash and credit temporarily restricted revenue. C) Do either (a) or (b), depending upon the policy of the not-for-profit. D) Not record the transaction.
A) Record the $60,000 cash and credit a liability.
14. Which of the following organizations would be subject to the (level b) accounting and reporting requirements of the AICPA's Audit and Accounting Guide: Not-for-Profit Organizations? A) The International Brotherhood of Electrical Workers. B) St. Jude Children's Hospital. C) Both of the above. D) Neither (a) or (b) above.
A) The International Brotherhood of Electrical Workers.
58. FASB statement 116 requires contributions to be recorded as revenue when A) The contribution is promised. B) The contributed asset is actually received. C) The contribution is likely to be received. D) The contribution is probable and measurable.
A) The contribution is promised.
47. Which of the following is not a condition for recording donated services? A) The individual providing the service provides an invoice detailing the hours contributed but waives the requirement for payment. B) The service requires a specialized skill and the donor possesses those skills. C) The service would have been paid for if not donated. D) The service creates or enhances a non-financial asset.
A) The individual providing the service provides an invoice detailing the hours contributed but waives the requirement for payment.
36. Which of the following factors, if present, would indicate that a transaction is not a contribution? A) The resource provider received value in exchange. B) The resource provider entered into the transaction voluntarily. C) The transfer of assets was unconditional. D) The organization has discretion in the use of the assets received.
A) The resource provider received value in exchange.
41. A private not-for-profit organization received a gift of $460,000 with purpose restrictions in 2013. In 2014 funds were expended for the purpose outlined in the gift, however, it was not possible to determine whether the restricted funds or unrestricted funds were used. The presumption should be: A) The restricted funds would have been used first. B) The unrestricted funds would have been used first. C) The restricted funds and unrestricted funds would have been used equally. D) The restricted funds and unrestricted funds would have been used, based on a weighted average of the amounts.
A) The restricted funds would have been used first.
69. The equity section of Statement of Financial Position for private not-for-profits includes which accounts? A) Unrestricted, Temporarily Restricted, Permanently Restricted Net Assets. B) Invested in Capital Assets net of related debt, Restricted and Unrestricted net assets. C) Unreserved Fund Balance, Reserved Fund Balance. D) None of the above.
A) Unrestricted, Temporarily Restricted, Permanently Restricted Net Assets.
32. Care Foundation is a voluntary health and welfare organization funded by contributions from the general public. Care sold equipment for $30,000 which cost $40,000 and had a book value of $25,000 at the time of sale. In recording the sale, Care should: A)Record a gain of $ 5,000. B)Record "temporarily restricted revenue" of $ 30,000. C)Both (a) and (b) above. D)Neither (a) nor (b) above.
A)Record a gain of $ 5,000.
79. Which of the following would not be recognized as contribution revenue by a private not-for-profit organization? A) A pledge to support an educational program for the next 3 years. B) A health clinic is paid to perform clinical trials of a new medicine. C) A gift restricted to purchase equipment. D) Dues paid in excess of the fair value of benefits received.
B) A health clinic is paid to perform clinical trials of a new medicine.
59. Which of the following statements is false with respect to private not-for-profit organizations? A) Exchange transactions should be recorded on the accrual basis of accounting where the revenues are recognized when earned. B) An intention to give should be recorded as revenue when the intention is communicated to the not-for-profit. C) In certain situations contributed services should be recognized as revenue. D) FASB statement 124 requires that investments in equity securities with readily determinable values be reported at fair market value.
B) An intention to give should be recorded as revenue when the intention is communicated to the not-for-profit.
8. Which of the following statements is not correct with respect to contributions to a private not-for-profit? A) Contributions to a not-for-profit are recorded at fair market value at the date of receipt. B) Contributions of assets other than cash to a not-for-profit are recorded at the donor's basis. C) Contributions to a not-for-profit may be restricted as to purpose or time or for plant acquisition. D) Revenues, including contributions are considered to be unrestricted unless donor-imposed restrictions apply.
B) Contributions of assets other than cash to a not-for-profit are recorded at the donor's basis.
7. Which of the following is true regarding accounting and financial reporting for nongovernmental, not-for-profit organizations? A) Expenses are classified as unrestricted or temporarily restricted. B) Expenses must be reported by function, either in the statements or in the notes. C) Both A & B above. D) Neither A nor B above.
B) Expenses must be reported by function, either in the statements or in the notes.
Private not-for-profits must follow all applicable ____ standards in recording transactions. A) AICPA. B) FASB. C) GASB. D) SEC.
B) FASB.
80. Which of the following is not correct with respect to mergers under the rules established by FASB Statement No. 164, Not-for-Profit Entities: Mergers and Acquisitions? A) If the combination qualifies as a merger, it will be accounted for using the carryover method. B) Goodwill is recognized on long term assets only C) Assets and liabilities are transferred from both existing entities to the new entity at book value. D) The entity resulting from the merger is a new reporting entity, with no activity before the date of the merger.
B) Goodwill is recognized on long term assets only
44. Which of the following is true of a Statement of Cash Flows for a private sector, private not-for-profit organization? A) Four categories are used: Operating, Capital Related Financing, Non-capital Related Financing, and Investing. B) If the direct method is used, the not-for-profit must also present a reconciliation between total change in net assets and cash flows from operating activities. C) Cash flows must be presented separately for Unrestricted, Temporarily Restricted, and Permanently Restricted categories. D) None of the above; all are true.
B) If the direct method is used, the not-for-profit must also present a reconciliation between total change in net assets and cash flows from operating activities.
35. Uptown Church received a donation of marketable equity securities from a church member. In reviewing the financial press, it is determined that the securities had appreciated during the year. At what amount should Uptown report its marketable equity securities in the year-end balance sheet? A) Market value at the date of receipt. B) Market value at the balance sheet date. C) Donor's cost. D) The lower of a, b or c.
B) Market value at the balance sheet date.
51. A donor gave $ 1,000,000 to a private not-for-profit organization to be held in endowment. In addition, the governing board permanently designated $ 500,000 to the endowment. In the Statement of Financial Position, how should these amounts be classified? A) Permanently Restricted: $1,500,000; Unrestricted: $ - 0 - B) Permanently Restricted: $1,000,000; Unrestricted: $ 500,000 C) Permanently Restricted: $ 500,000; Unrestricted: $1,000,000 D) Permanently Restricted: $ - 0 ; Unrestricted: $1,500,000
B) Permanently Restricted: $1,000,000; Unrestricted: $ 500,000
72. The FASB requires that expenses of voluntary health and welfare organizations be reported according to function. Which of the following are FASB required function categories: A) Operating and Nonoperating B) Program and Supporting Services. C) Operating, Investing and Financing. D) Capital and Noncapital Related
B) Program and Supporting Services.
Contributed services are recognized as revenue for a private not-for-profit when the service: A) Is related to administration and fund raising activities. B) Requires specialized skills, is provided by someone possessing those skills, and typically would be purchased if not provided by donation. C) A and B are both required for the service to be recorded as revenue D) None of the above, contributed services are not recorded as revenue
B) Requires specialized skills, is provided by someone possessing those skills, and typically would be purchased if not provided by donation.
11. FASB Statement 124, Accounting for Certain Investments of Not-for-Profit Organizations: A) Requires that investments in equity securities be carried at book value. B) Requires that investments in debt securities be carried at fair value. C) Requires that investments accounted for under the equity method be adjusted to fair value at the end of the accounting period. D) Requires that investments in consolidated subsidiaries be reported as permanently restricted.
B) Requires that investments in debt securities be carried at fair value.
13. Which of the following organizations would be subject to the accounting and reporting requirements of FASB Statements 116 (Accounting for Contributions) and 117 (Financial Reporting for Not-for-Profit Organizations)? A) The City of Hannibal Missouri. B) St. Jude Children's Hospital. C) Both of the above. D) Neither (a) or (b) above.
B) St. Jude Children's Hospital.
19. Which of the following is true regarding the Statement of Financial Position for nongovernmental, not-for-profit organizations? A) The Statement must display assets and liabilities separated between the categories of unrestricted, temporarily restricted, and permanently restricted. B) The Statement must display totals for net assets separated between the categories of unrestricted, temporarily restricted, and permanently restricted. C) Both A & B above. D) Neither A nor B above.
B) The Statement must display totals for net assets separated between the categories of unrestricted, temporarily restricted, and permanently restricted.
29. A skilled carpenter repaired the roof of the administrative building for a private not-for-profit free of charge. The not-for-profit would have had to pay $2,000 for this service if not donated. What entry should the not-for-profit make? A) No entries are required for this event. B)Supporting Service expense $2,000 Contribution revenue $2,000 C)Capital Expenditures $2,000 Contribution revenue $2,000 D) Building $2,000 Contribution revenue $2,000
B)Supporting Service expense $2,000 Contribution revenue $2,000
49. In 2014, a major drug company agreed to give a not-for-profit private college $300,000 to perform testing of a new drug. An advance payment of $200,000 was received in 2014. The college was to receive $1,500 per individual test. In 2014, the college completed 100 tests. How much revenue should the college report for 2014? A) $ 300,000 B) $ 200,000 C) $ 150,000 D) $ 100,000
C) $ 150,000
42. Which of the following pledges of support would not be recognized in the year the pledge was made? A) An unconditional pledge restricted to a particular year in the future. B) An unconditional pledge restricted to a particular purpose. C) A pledge with no restrictions, but conditional on receiving matching pledges. D) None of the above - all would be recognized.
C) A pledge with no restrictions, but conditional on receiving matching pledges.
17. Which of the following is part of the treatment of multi-year pledges as required by FASB Statement No. 116? A) The donation is recorded as a receivable at the present value of the future collections but revenue is not recorded until the pledge is received. B) At the end of each accounting period, the difference between the balance in the receivable account and the new present value is deducted from the amount of the amount received from the donor which is recorded as income C) At the end of each accounting period, the difference between the balance in the receivable account and the new present value is recorded as contribution revenue and the receivable is increased. D) Pledge receivable is recorded for the total amount to be received and revenue is recorded each year as monies are received by the organization.
C) At the end of each accounting period, the difference between the balance in the receivable account and the new present value is recorded as contribution revenue and the receivable is increased.
38. Which of the following is a legitimate reason for a private not-for-profit organization to have a surplus (increase in net assets)? A) To establish working capital. B) To retire debt. C) Both (a) and (b) above. D) None of the above, not-for-profits should not have surpluses.
C) Both (a) and (b) above.
10. With the exception of collections, fixed assets may be recorded by a private not-for-profit as: A) Temporarily restricted B) Unrestricted C) Both A & B above. D) Neither A nor B above.
C) Both A & B above.
68. Which of the following is a legitimate reason for a private not-for-profit to generate a surplus? A) Retiring debt. B) Establishing working capital. C) Both A & B above. D) Neither A nor B above
C) Both A & B above.
Which of the following is true regarding the Statement of Cash Flows for nongovernmental, not-for-profit organizations? A) Either the direct or indirect method may be used. B) If a not-for-profit organization received a cash contribution for permanently restricted purposes, that cash contribution would be shown as a cash flow from financing activities. C) Both of the above. D) Neither of the above.
C) Both of the above.
74. The three classes of net assets reported for a private not-for-profit organization include all of the following except: A) Unrestricted net assets. B) Temporarily restricted net assets. C) Capital restricted net assets. D) Permanently restricted net assets.
C) Capital restricted net assets.
27. Which of the following organizations does not follow the AICPA's Not-for-Profit Guide? A) Political parties. B) Voluntary health and welfare organizations. C) City libraries. D) Private foundations.
C) City libraries.
52. The FASB has the authority to set accounting standards for all of the following organizations except: A) Political parties.. B) For profit hospitals. C) City owned hospital D) Trade associations.
C) City owned hospital
23. A donor gave artwork to a nongovernmental, not-for-profit museum. The artwork qualified as a "collection," under FASB rules. The not-for-profit could: A) Record the artwork at its fair market value at the time of receipt as an increase in permanently restricted net assets. B) Not record the artwork, but provide information about the artwork in the notes. C) Do either of the above, depending upon the policy of the not-for-profit. D) Record the artwork as both a contribution and an expense.
C) Do either of the above, depending upon the policy of the not-for-profit.
3. Identify the standard setting body for private not-for-profit organizations and the basis of accounting that should be used. A) GASB & Accrual. B) GASB & Modified Accrual. C) FASB & Accrual. D) FASB & Modified Accrual.
C) FASB & Accrual.
73. Investments by private not-for-profit organizations in equity securities should be carried at A) Historical cost. B) Lower of cost or Market. C) Fair Market Value. D) None of the above.
C) Fair Market Value.
6. Which of the following are the net asset classes required by the FASB for private not-for-profit organizations? A) Reserved and Unreserved. B) Invested in Capital Assets, Net of Related Debt, Restricted, and Unrestricted. C) Permanently Restricted, Temporarily Restricted, Unrestricted. D) None of the above.
C) Permanently Restricted, Temporarily Restricted, Unrestricted.
39. What financial ratio is most commonly used to evaluate charitable organizations? A) Current assets / current liabilities. B) Increase in net assets / total assets. C) Program expenses / total expenses. D) Total expenses / total revenues.
C) Program expenses / total expenses.
70. The institution's governing board decided to create an endowment from contributed funds, this is called a(n) ________ and the funds are unrestricted. A) Endowment. B) Term endowment. C) Quasi-endowment. D) None of the above.
C) Quasi-endowment.
48. A donor made a cash contribution of $90,000 to a private not-for-profit organization for the purpose of acquiring a building. The not-for-profit organization properly recorded the gift of cash as temporarily restricted revenue. When the building is acquired, the organization should: A) Record the building as permanently restricted. B) Record the building as temporarily restricted. C) Record the building as either unrestricted or temporarily restricted, as long as a consistent policy is followed. D) Show an expense equivalent to the amount paid for the building in unrestricted net assets and reclassify the same amount from temporarily restricted to unrestricted net assets.
C) Record the building as either unrestricted or temporarily restricted, as long as a consistent policy is followed.
50. A donor made a pledge in 2013 of $ 50,000 to a private not-for-profit organization with the intent to pay the cash in 2014 for unrestricted use in 2014. The organization should: A) Record the pledge receivable and deferred revenue in 2013. B) Record the pledge as unrestricted revenue in 2013. C) Record the pledge as temporarily restricted revenue in 2013 and reclassify it to unrestricted in 2014. D) Record the pledge as temporarily restricted revenue in 2013 and reclassify it to unrestricted in 2014, but only in an amount equivalent to the amount that is spent in 2014.
C) Record the pledge as temporarily restricted revenue in 2013 and reclassify it to unrestricted in 2014.
71. Which of the following financial statements are required for voluntary health and welfare organizations? A) Income Statement. B) Statement of Net Assets. C) Statement of Cash Flows. D) Budgetary Comparison Schedule.
C) Statement of Cash Flows.
45. Which of the following is not true of a Statement of Activities prepared for a private not-for-profit organization? A) Expenses are shown only as decreases in unrestricted net assets. B) Reclassifications for expiration of time restrictions are shown in the revenues and support section. C) Unrealized gains (losses) on investments are shown only as increases (decreases) in unrestricted net assets. D) Expenses are classified by function within the categories of Program Services and Supporting Services either in the Statement or the notes.
C) Unrealized gains (losses) on investments are shown only as increases (decreases) in unrestricted net assets.
61. A Statement of Functional Expenses is required for A) State governments. B) Tax agencies. C) Voluntary health and welfare organizations. D) Colleges and universities.
C) Voluntary health and welfare organizations.
30. Henry Highbrow promises to donate $50,000 to his church toward the purchase of a new pipe organ if the church is able to raise matching funds of $50,000 from other contributors. At what point should the church record revenue? A) When Henry makes his pledge, so long are collection is reasonably assured. B) When the organ is purchased. C) When the matching funds are raised. D) When Henry pays the $50,000 to the church.
C) When the matching funds are raised.
64. When should unconditional pledges be recorded as revenue? A) Never. B) When money is received. C) When the pledge is made. D) When full collection is assured.
C) When the pledge is made.
56. Which of the following is not an example of a voluntary health and welfare organization? A. Meals on Wheels. B. Big Brothers/Big Sisters. C. Performing arts organizations. D. Girl and Boy Scouts.
C. Performing arts organizations.
55. Which of the following is not a characteristic that distinguishes a private not-for-profit organization from a business? A. Contributions are from resource providers who expect nothing in return. B. Financial statements are intended primarily for use by donors. C. The organization's revenues exceed expenses. D. Absence of ownership interests.
C. The organization's revenues exceed expenses.
67. Which of the following is not an example of a donor imposed restriction? A) Funds are not to be used until the following year. B) Funds must be used on certain programs. C) Funds are to be endowed. D) All of the above are examples of donor imposed restrictions.
D) All of the above are examples of donor imposed restrictions.
54. Under which of the following conditions is it appropriate for a private not-for-profit to allocate the cost of mass mailings from fund raising to a program related activity, such as Public Education? A) The purpose of the mailing includes accomplishing program functions. B) The audience is selected based on characteristics other than ability to make contributions. C) The mailing calls for specific action by the recipient that is consistent with the goals of the not-for-profit's mission. D) All of the above.
D) All of the above.
62. Supporting activities as classified in the Statement of Activities, normally include A) Management and general. B) Fund-raising. C) Membership development. D) All of the above.
D) All of the above.
31. Lisa informed her church that she had named the church in her will and later provided a written copy of the will to the church. At what point should the church record the contribution? A) At the time when the church was informed of her will. B) At the time the church receives a written copy of the will. C) At Lisa's death. D) At the date the probate court declares the will valid following her death.
D) At the date the probate court declares the will valid following her death.
15. Which of the following is not true regarding the treatment of multiyear pledges, according to FASB Statement 116? A) They are recorded at the present value of future collections. B) They should be reported net of an allowance for estimated uncollectibles. C) They should be recorded as temporarily restricted. D) At the end of each accounting period, the difference between the new and previously recorded present value is recorded as interest revenue.
D) At the end of each accounting period, the difference between the new and previously recorded present value is recorded as interest revenue.
34. Care Foundation is a voluntary health and welfare organization funded by contributions from the general public. In its Statement of Activities, the annual provision for depreciation should: A) Not be included. B) Be included as an element of support. C) Be included as an element of changes in fund balances. D) Be included as an element of expense.
D) Be included as an element of expense.
18. A civic ballet company sells 100 "Benefactor" status memberships for $1,000 each. The Benefactors each receive a season ticket valued at $400, and a listing in the company's program. How would the ballet company record the sale of these 100 memberships? A) Cash $100,000 Deferred Revenue $100,000 B) Cash - Restricted $ 60,000 Cash - Unrestricted 40,000 Contributions - Restricted $ 60,000 Revenue 40,000 C) Cash $100,000 Revenue $ 40,000 Contributions - Restricted 60,000 D) Cash $100,000 Deferred Revenue$ 40,000 Contributions - Unrestricted 60,000
D) Cash $100,000 Deferred Revenue$ 40,000 Contributions - Unrestricted 60,000
40. A donor gave equipment valued at $50,000 at the beginning of 2014 to a private not-for-profit organization. The equipment had a 10-year life and depreciation of $5,000 was charged during 2014. At the end of the year, the net assets to be reported in unrestricted net assets related to this equipment would be: A) $50,000. B) $45,000. C) $ 0. D) Either $45,000 or $0, depending upon the policy of the organization
D) Either $45,000 or $0, depending upon the policy of the organization
81. Which of the following is not correct with respect to acquisitions under the rules established by FASB Statement No. 164, Not-for-Profit Entities: Mergers and Acquisitions? A) If the combination qualifies as an acquisition, the not-for-profit may acquire control of a business enterprise or other not-for-profit organization and will be accounted for using the acquisition method. B) Combinations not meeting the definition of a merger are reported as acquisitions. C) Assets and liabilities of the acquired entity are recorded at fair value on the books of the not-for-profit D) Entities that derive their revenues from business-like activities are required to expense the goodwill at the date of acquisition.
D) Entities that derive their revenues from business-like activities are required to expense the goodwill at the date of acquisition.
43. Under FASB Statement 117, reclassifications of net assets are not made: A) For satisfaction of time restrictions. B) For satisfaction of program restrictions. C) For satisfaction of fixed asset acquisition. D) For permanently restricted net assets.
D) For permanently restricted net assets.
28. In which of the following categories may Investment Income be reported by Not-for-Profit organizations: I. Unrestricted net asset II. Temporarily restricted net asset III. Permanently restricted net asset A) Only I. B) Only I & II. C) Only 1 & III. D) I, II & III.
D) I, II & III.
77. If a person names a private not-for-profit organization in his or her will, this is considered a(n) ________ and is __________. A) Conditional promise to give; not recorded. B) Unconditional promise to give; recorded. C) Intention to give; recorded. D) Intention to give; not recorded.
D) Intention to give; not recorded.
46. The Statement of Functional Expenses: A) Is no longer a required financial statement of any organization. B) Is required of all private not-for-profit organizations. C) Is required of all private colleges but not public colleges. D) Is required of voluntary health and welfare organizations.
D) Is required of voluntary health and welfare organizations.
22. Which of the following would be a contribution increasing permanently restricted net assets? A) A contribution by a donor in the amount of $1,000,000, set aside by the governing board as funds not to be expended. B) A contribution by a donor in the amount of $1,000,000 to be used to acquire land. C) Both A & B above. D) Neither A nor B above
D) Neither A nor B above
24. Which of the following contributed services would probably not be recognized as contribution revenue? A) An attorney donates her services to defend the Girl Scouts in a lawsuit. B) A nurse donates her time to collect blood at an American Red Cross blood drive C) An electrician donates his services to upgrade the electrical service at a mental health clinic. D) State CPA society members hand out informational booklets at a shopping mall.
D) State CPA society members hand out informational booklets at a shopping mall.
5. What are the financial statements required for all nongovernmental, not-for-profit organizations? A) Statement of Financial Position, Statement of Activities, Statement of Cash Flows, Statement of Functional Expenses. B) Statement of Financial Position, Statement of Activities, Statement of Functional Expenses. C) Statement of Financial Position, Statement of Net Assets, Statement of Functional Expenses. D) Statement of Financial Position, Statement of Activities, Statement of Cash Flows.
D) Statement of Financial Position, Statement of Activities, Statement of Cash Flows.
65. A membership pass to the YMCA (a private not-for-profit organization) includes unlimited rights to all facilities and a health magazine subscription. Non-members do not possess these rights. How must the YMCA account for membership dues? A) The dues are a non-exchange transaction, so it should report all dues in the year received. B) The dues are a non-exchange transaction, so it should report dues on a pro-rata basis determined by the length of the individual memberships. C) The dues are an exchange transaction, so it should report all dues in the year received. D) The dues are an exchange transaction, so it should report dues on a pro-rata basis determined by the length of the individual memberships.
D) The dues are an exchange transaction, so it should report dues on a pro-rata basis determined by the length of the individual memberships.
78. The following treatment is correct with regards to payments that are partially exchange transactions and partially contributions: A) Reported only as a exchange transaction. B) Reported only as a contributions. C) Reported as either an exchange transaction or contribution, depending on management's judgment. D) The two parts should be separately accounted for.
D) The two parts should be separately accounted for.
4. Which of the following is not a distinguishing characteristic of a private not-for-profit organization according to FASB Statement No. 116? A) Operating purposes other than to provide goods or services at a profit. B) Absence of ownership interests like those of business enterprises. C) Contributions of significant amounts of resources from resources providers who do not expect commensurate or proportionate pecuniary return. D) Upon dissolution of the organization, remaining assets are to be distributed to the original contributors.
D) Upon dissolution of the organization, remaining assets are to be distributed to the original contributors.
37. A donor made a gift of cash to a private not-for-profit organization in 2014 with an expressed purpose restriction. All the funds were expended in 2014. The organization must: A) Record the gift as a temporarily restricted revenue, reclassify the funds to unrestricted, and then report the expense as unrestricted. B) Record the gift and expense as unrestricted. C) Record the gift and expense as temporarily restricted. D) Use either of the methods described in (a) or (b).
D) Use either of the methods described in (a) or (b).
57. Reclassifications from permanently restricted net assets to temporarily restricted net assets would occur only under which of the following circumstances? A) Time restrictions placed on the permanently restricted net assets have been met. B). Purpose restriction placed on the permanently restricted net assets have been met. C). Either of the above criteria (A and B) have been met. D). Permanently restricted net assets would not be reclassified to temporarily restricted net assets.
D). Permanently restricted net assets would not be reclassified to temporarily restricted net assets.
