Chapter 10

49. In 2017, a major drug company agreed to give a not-for-profit private college $420,000 to perform testing of a new drug. An advance payment of $335,000 was received in 2017. The college was to receive $1,500 per individual test. In 2017, the college completed 130 tests. How much revenue should the college report for 2017? A) $ 195,000 B) $ 200,000 C) $ 335,000 D) $ 420,000

A) $ 195,000

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 senior citizen center. D) A food bank.

A) A state community college.

75. 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.

18. A civic ballet company sells 100 "Benefactor" status memberships for $1,000 each. The Benefactors each receive a season ticket valued at $350, and a listing in the company's program. How would the ballet company record the sale of these 100 memberships at the beginning of the season? A) Cash $100,000 Deferred Revenue $ 35,000 Contributions - Unrestricted 65,000 B) Cash $100,000 Deferred Revenue $100,000 B) Cash - Restricted $ 65,000 Cash - Unrestricted 35,000 Contributions - Restricted $ 65,000 Revenue 35,000 C) Cash $100,000 Revenue $ 35,000 Contributions - Restricted 65,000

A) Cash $100,000 Deferred Revenue $ 35,000 Contributions -

26. Which of the following organizations does not follow the AICPA's Not-for-Profit Guide? A) City libraries. B) Political parties. C) Voluntary health and welfare organizations. D) Private foundations.

A) City libraries.

7. Which of the following is not 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 of Activities or in the notes. C) Net assets are classified according to donor-imposed restrictions. D) All of the above are true.

A) Expenses are classified as unrestricted or temporarily restricted.

1. Which organization has standard setting authority over governmentally related not-for-profit organizations, such as hospitals colleges and universities? A) GASB. B) AICPA. C) FASB D) SEC.

A) GASB.

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 balance sheet date. B) Donor's cost. C) Market value at the date of receipt. D) The lower of cost or market.

A) Market value at the balance sheet date.

32. The Robbins Foundation is a voluntary health and welfare organization funded by contributions from the general public. Care sold equipment for $35,000 which cost $140,000 and had a book value of $45,000 at the time of sale. In recording the sale, the foundation should: A) Record a loss of $10,000. B) Record a gain of $10,000. C) Record a loss of $5,000. D) Record a gain of $5,000.

A) Record a loss of $10,000.

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, because the money is going directly to the intended recipient.

A) Record the $60,000 cash and credit a liability.

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 $640,000 with purpose restrictions in 2014. In 2017 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.

89. Which of the following is NOT a reason for which a not-for-profit organization would need to generate a surplus? A) To pay bonuses at year end. B) Expand or replace physical facilities. C) Retire debt. D) Continue a program beyond the period that initial funding is provided.

A) To pay bonuses at year end.

68. The residual equity section of Statement of Financial Position for private not-for-profits includes which accounts? A) Unrestricted, Temporarily Restricted, Permanently Restricted Net Assets. B) Net investment in capital assets, 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.

61. A Statement of Functional Expenses is required for A) Voluntary health and welfare organizations. B) Tax agencies. C) State governments. D) Colleges and universities.

A) Voluntary health and welfare organizations.

29. A benefactor promises to donate $25,000 to his church toward the purchase of a new piano if the church is able to raise matching funds of $25,000 from other contributors. At what point should the church record revenue? A) When the matching funds are raised. B) When the benefactor makes his pledge, as long as collection is reasonably assured. B) When the piano is purchased. D) When the benefactor pays the $25,000 to the church.

A) When the matching funds are raised.

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) A pledge with no restrictions, but conditional on receiving matching pledges. C) An unconditional pledge restricted to a particular purpose. D) None of the above - all would be recognized.

B) A pledge with no restrictions, but conditional on receiving matching pledges.

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.

28. A skilled carpenter installed a roof on a new administrative building for a private not-for-profit free of charge. The not-for-profit would have had to pay $1,800 for this service if not donated. What entry should the not-for-profit make? A) Supporting Service expense $1,800 Contribution revenue $1,800 B) Capital Expenditures $1,800 Contribution revenue $1,800 C) Building $1,800 Contribution revenue $1,800 D) No entry is required for this event. are never recorded.

B) Capital Expenditures $1,800 Contribution revenue $1,800

52. The FASB has the authority to set accounting standards for all of the following organizations except: A) Political parties. B) City owned hospital. C) For profit hospitals. D) Trade associations.

B) City owned hospital.

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 the pledge is made. 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.

71. 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.

20. Which of the following is not 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. B) Expenses are reported as unrestricted, temporarily restricted or permanently restricted. C) Expenses are reported as decreases in unrestricted net assets. D) Organization-wide totals must be provided.

B) Expenses are reported as unrestricted, temporarily restricted or permanently restricted.

2. Private not-for-profits must follow all applicable ____ standards in recording transactions. A) GASB. B) FASB. C) AICPA. D) SEC.

B) FASB.

72. Investments by private not-for-profit organizations in equity securities should be carried at A) Historical cost. B) Fair Market Value. C) Lower of cost or Market. D) None of the above.

B) Fair Market Value.

88. With respect to a not-for-profit that holds contributions for others, which of the following is true? A) If the not-for-profit organization and beneficiary are financially interrelated, the transfer is recorded as an inter-entity transfer. B) Generally, if the not-for-profit organization agrees to transfer the assets to a specified beneficiary, the organization is deemed to be an agent and a liability is recorded. C) If the not-for-profit organization has the ability to redirect the assets to ¬another beneficiary, the transfer is recorded as a contribution. D) The not-for-profit records an asset restricted as to purpose.

B) Generally, if the not-for-profit organization agrees to transfer the assets to a specified beneficiary, the organization is deemed to be an agent and a liability is recorded.

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.

63. In 2017, 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) When the Museum receives the contribution. B) Only after Susan dies and the will is declared valid. C) Ratably over a five year period beginning in 2017. D) All in 2017.

B) 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) Return on Investment. B) Program Expense Ratio. C) Change in Net Assets. D) Ending Unrestricted Net Assets.

B) Program Expense Ratio.

39. What financial ratio is most commonly used to evaluate charitable organizations? A) Current assets / current liabilities. B) Program expenses / total expenses. C) Increase in net assets / total assets. D) Total expenses / total revenues.

B) Program expenses / total expenses.

50. A donor made an unconditional pledge in 2016 of $ 50,000 to a private not-for-profit organization with the intent to pay the cash in 2017 for unrestricted use in 2017. The organization should: A) Record the pledge receivable and deferred revenue in 2016. B) Record the pledge as temporarily restricted revenue in 2016 and reclassify it to unrestricted in 2017. C) Record the pledge as unrestricted revenue in 2016. D) Record the pledge as temporarily restricted revenue in 2016 and reclassify it to unrestricted in 2017, but only in an amount equivalent to the amount that is spent in 2017.

B) Record the pledge as temporarily restricted revenue in 2016 and reclassify it to unrestricted in 2017.

12. 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.

87. Which of the following statements is NOT accurate with respect to the recording of expenses for a not-for-profit? A) Expenses are measured on the accrual basis. B) The FASB requires expenses to be reported by function or program in the Statement of Activities. C) The FASB requires expenses to be classified as program or supporting. D) Expenses are reported in the unrestricted net asset class.

B) The FASB requires expenses to be reported by function or program in the Statement of Activities.

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.

83. Which of the following is not one of the specific disclosure requirements for private not-for-profits? A) The amount of conditional promises (i.e., pledges) receivable due in less than one year, one to five years, and more than five years from the balance sheet date B) The amount of recourses received from the federal government. C) The total of conditional amounts pledged. D) The amount of the allowance for uncollectible pledges receivable;

B) The amount of recourses received from the federal government.

77. The following treatment is correct with regards to payments that are partially exchange transactions and partially contributions: A) Reported only as an exchange transaction. B) The two parts should be separately accounted for. C) Reported as either an exchange transaction or contribution, depending on management's judgment. D) Reported only as a contributions.

B) The two parts should be separately accounted for.

6. Which of the following are the net asset classes required by the FASB for private not-for-profit organizations? A) Assigned, Committed, and Unrestricted. B) Unrestricted, temporarily restricted and Permanently restricted. C) Net investment in capital assets, Restricted, and Unrestricted. D) Partially Restricted, Temporarily Restricted, Unrestricted.

B) Unrestricted, temporarily restricted and Permanently restricted.

56. Which of the following is not an example of a voluntary health and welfare organization? A. Meals on Wheels. B. Trade Associations. C. Big Brothers/Big Sisters. D. Girl and Boy Scouts.

B. Trade Associations.

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 fixed assets. C) A contribution of $1,000,000 to fund an endowment. D) None of the above.

C) A contribution of $1,000,000 to fund an endowment.

78. 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 gift restricted to purchase equipment. C) A health clinic is paid to perform clinical trials of a new medicine. D) Dues paid in excess of the fair value of benefits received.

C) A health clinic is paid to perform clinical trials of a new medicine.

30. 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 the date the probate court declares the will valid following her death. D) At Lisa's death.

C) At the date the probate court declares the will valid following her death.

73. 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.

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) Interest income. B) Program revenue. C) Contribution revenue. D) Other comprehensive income/loss.

C) Contribution revenue.

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 (A) or (B) above, depending upon the policy of the not-for-profit. D) Record the artwork as both a contribution and an expense.

C) Do either (A) or (B) above, depending upon the policy of the not-for-profit.

84. Generally speaking, not-for-profit organizations record and measure transactions and events in the same manner as commercial enterprises. They do, however, differ from commercial enterprises in two important ways. Which of the following is one of those differences? A) Not-for-profit organizations receive considerable amounts of resources from the government. B) Not-for-profit organizations do not record revenues until money is actually received. C) Donors frequently impose restrictions on the use of donated resources. D) Commercial enterprises use accrual accounting and not-for-profits use modified accrual accounting.

C) Donors frequently impose restrictions on the use of donated resources.

9. Which of the following is not correct with respect to the reporting of expenses for a private not-for-profit? A) The FASB describes functions as either program or supporting. B) Major program classifications should be shown in the Statement of Activities or in the notes. C) Expenses can be reported in the unrestricted net asset class or restricted net asset class, as appropriate. D) Expenses are reported by function in the Statement of Activities or in the notes.

C) Expenses can be reported in the unrestricted net asset class or restricted net asset class, as appropriate.

51. A donor gave $ 1,200,000 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: $ -0- ; Unrestricted: $1,900,000 B) Permanently Restricted: $ 700,000; Unrestricted: $ 500,000 C) Permanently Restricted: $1,200,000; Unrestricted: $ 500,000 D) Permanently Restricted: $1,900,000; Unrestricted: $ -0-

C) Permanently Restricted: $1,200,000; Unrestricted: $ 500,000

69. 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.

70. Which of the following financial statements is required for private not-for-profit organizations? A) Income Statement. B) Statement of Net Assets. C) Statement of Cash Flows. D) Budgetary Comparison Schedule.

C) Statement of Cash Flows.

58. FASB statement 116 requires contributions to be recorded as revenue when A) The contributed asset is actually received. B) The contribution is likely to be received. C) The contribution is unconditionally promised. D) The contribution is probable and measurable.

C) The contribution is unconditionally promised.

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.

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 without an expectation of receiving equivalent value 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.

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) Expand or replace physical facilities. 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.

85. Which of the following statements is not correct with respect to conditional and unconditional pledges A) FASB requires contributions, including unconditional pledges to be recorded as revenues when the promise is made. B) Conditional pledges to give are not recognized as revenues until the conditions are satisfied. C) If a conditional pledge is made and the money is received by the not-for-profit, but if the condition is not met, the potential donor is not bound by the promise and may require the money be returned. D) Conditional pledges are recorded as unearned revenue.

D) Conditional pledges are recorded as unearned revenue.

86. Which of the following statements is correct with respect to contributions restrictions? A) The restriction is created by the not-for-profit when the contribution is made. B) The donor can indicate that the contributions are to be expended for a particular purpose but not time. C) The donor can indicate that the contributions are to be expended for a particular purpose or time, but not for plant acquisition. D) Contributions may be restricted as to purpose, time, or for plant acquisition.

D) Contributions may be restricted as to purpose, time, or for plant acquisition.

40. A donor gave equipment valued at $60,000 at the beginning of 2017 to a private not-for-profit organization. The equipment had a 10-year life and depreciation of $6,000 was charged during 2017. At the end of the year, the net assets to be reported in unrestricted net assets related to this equipment would be: A) $60,000. B) $54,000. C) $ 0. D) Either $54,000 or $0, depending upon the policy of the organization

D) Either $54,000 or $0, depending upon the policy of the organization

10. With the exception of collections, fixed assets may be recorded by a private not-for-profit as: A) Temporarily restricted B) Unrestricted C) Permanently restricted D) Either A or B.

D) Either A or B.

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 & Modified Accrual. D) FASB & Accrual.

D) FASB & Accrual.

21. Which of the following is not 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 restricted cash contribution for long-term purposes, that cash contribution would be reported as a cash flow from financing activities. C) Restricted contributions used for long-term purposes are reported as financing activities. D) Four categories of cash flows are used.

D) Four categories of cash flows are used.

27. 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.

46. The Statement of Functional Expenses: A) Is required of all private colleges but not public colleges. B) Is no longer a required financial statement of any organization. C) Is required of all private not-for-profit organizations. D) Is required of voluntary health and welfare organizations.

D) Is required of voluntary health and welfare organizations.

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) Commonly financed through voluntary contributions. D) Operate for the direct benefit of members.

D) Operate for the direct benefit of members.

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 restrictions 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.

31. 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 loss of $10,000. B) Record a gain of $10,000. C) Record a loss of $5,000. D) Record a gain of $5,000.

D) Record a gain of $5,000.

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 the donated cash as a contribution. B) Record a revenue and when the award is used by the recipient, an expenditure for the same amount is recorded. C) Record the scholarship awarded as a reduction of revenue. D) Record a liability, as it is merely acting as an agent for the donation.

D) Record a liability, as it is merely acting as an agent for the donation.

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.

81. Which of the following statements is not accurate with respect to private not-for-profits? A) Private not-for-profits report both current and long-term assets and liabilities and measure revenues and expenses using the accrual basis of accounting. B) The financial statements of private not-profits do not report by fund. C) The excess of assets over liabilities is termed net assets. D) The FASB has identified two classes of net assets for not-for-profits: unrestricted and restricted

D) The FASB has identified two classes of net assets for not-for-profits: unrestricted and restricted

47. Which of the following is not a condition for recording donated services? A) The service requires a specialized skill and the donor possesses those skills. B) The service would have been paid for if not donated. C) The service creates or enhances a non-financial asset. D) The individual providing the service provides an invoice detailing the hours contributed but waives the requirement for payment.

D) The individual providing the service provides an invoice detailing the hours contributed but waives the requirement for payment.

37. A donor made a gift of cash to a private not-for-profit organization in 2017 with an expressed purpose restriction. All the funds were expended in 2017. 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).