chapter 14
A donor-imposed condition exists if which of the following are present? 1. a right of return or release 2. a barrier that must be overcome by the NFP 3. a contribution in excess of $100,000
1, 2
In order to allocate joint costs of activities that combine a program or administrative activity with fund-raising, ______. 1. they must be allocated between the bona fide program or management and general function and fund-raising using an equitable allocation method 2. they must meet the criteria of purpose, audience, and content 3. the total costs should be reported as fund-raising costs if a bona fide program or management and general function has been conducted
1, 2
Which of the following apply to contributions with donor-imposed conditions? 1. A refundable advance liability should be recognized when assets are received before satisfying conditions. 2. They cannot be recognized as revenue until all conditions have been met. 3. They cannot include stipulations limiting the discretion a recipient has to conduct an activity. 4. They should be recognized as revenue when at least 50% of the conditions have been met.
1, 2
Identify the true statement regarding accounting for investments for NFPs. 1. Debt securities that are contributed are initially measured at fair value. 2. Equity securities that are contributed are valued at fair value. 3. Debt securities that are purchased are valued at acquisition price. 4. Equity securities that are purchased are valued at fair value.
1, 2, 3
In order for an NFP organization to be considered a governmental organization, it must have one or more of which characteristics? 1. the potential for unilateral dissolution by a government with net assets reverting to a government 2. the power to enact and enforce a tax levy 3. popular election of officers or appointment of a controlling majority by a government 4. the requirement to calculate, withhold, and pay taxes on revenue earned
1, 2, 3
The requirement to report investments at fair value does not apply to which investments? 1. securities reported under the equity method 2. consolidations 3. investments with readily determinable fair value 4. securities reported under the fair value method 5. investments with no readily determinable fair value
1, 2, 5
Stakeholders of NFPs that use not-for-profit financial statements include which of the following? 1. members 2. Internal Revenue Service 3. donors 4. grantors 5. lenders
1, 3, 4, 5
Identify the following donated services that would require a journal entry for contribution revenue and a related expense or asset. 1. an architect volunteers his services for the remodeling of a local library 2. a retired schoolteacher volunteers to read to preschoolers at the local library 3. volunteers working in a not-for-profit gift shop 4. a psychiatrist volunteers 10 hours a week at a not-for-profit counseling center to assist those battling drugs and alcohol addiction
1, 4
NFPs have long been required to support expenses by functional classifications such as which of the following major classifications? 1. program 2. endowment 3. gifts in kind 4. support
1, 4
Which of the following statements regarding the statement of cash flows are correct? 1. Acquisition of a building using restricted net assets is reported as an investing activity 2. Donor-imposed restrictions are reported separately. 3. Unrestricted gifts are included in the investing activities section. 4. Restricted net assets given for long-term purposes are included in the financing activities section.
1, 4
The FASB's objectives of financial reporting for not-for-profit organizations are to provide information useful in which of the following? 1. making resource allocation decisions 2. assessing economic resources, obligations, net resources and changes in them 3. assessing services and ability to provide services 4. assessing net profit provided by resources used
1,2,3
Donation of land, buildings, and equipment are ______. 1. reported as temporarily restricted if the donor does not indicate how the asset should be used 2. classified as contributions with or without donor restrictions 3. reported at their fair value as contributions or support on the statement of activities 4. reported at the donor's cost as contributions or support on the statement of activities
2, 3
Which of the following statements are correct? 1. Organizations that have the ability to issue debt with tax-exempt interest are always considered governmental organizations. 2. If an organization has the power to enact and enforce a tax levy, it is a governmental organization. 3. Hospitals and social service organizations may be governmental or nongovernmental.
2, 3
Examples of required disclosures for NFPs include those relating to which of the following? 1. exchange transactions 2. contingencies 3. commitments 4. warranties 5. financial instruments
2, 3, 5
Which of the following would be considered contributed services to be recognized at fair market value? 1. retired schoolteacher reads books to preschoolers at the local library 2. advertising time is donated by the local TV network 3. local CPA prepares tax returns for a museum 4. local nurse provides free nursing services at a senior center
3, 4
A category of revenues arising from contributions of resources or nonexchange transactions that include only amounts for which the donor derives no tangible benefits from the recipient agency is referred to as ______. A. support B. functional C. exchange
A
A noncash contribution given to not-for-profit organizations is called a ______. A. gift in kind B. promise to give C. pledge
A
A(n) ______ depends on the recipient overcoming a barrier and must contain a right of release from obligation if the barrier is not overcome. A. conditional promise to give B. unconditional promise to give C. unrestricted asset D. board-designated asset
A
According to FASB ASC 958-20-20, entities _______ if one of the entities has the ability to influence the operating and financial decisions of the other entity and one of the entities has an ongoing economic interest in the net assets of the other. A. are financially interrelated B. are intermediaries C. have variance power
A
An unconditional promise to give is recorded as support in the year ______. A. made B. received C. used
A
When an agent or intermediary receives an asset in a transfer between a donor and a beneficiary, which of the following should they do? A. recognize an asset and a related liability when it receives a donation on behalf of the beneficiary organization B. recognize contribution revenue when it receives a donation on behalf of the beneficiary organization C. recognize an asset and contribution revenue when it receives a donation on behalf of the beneficiary organization
A
Which of the following is responsible for governmental not-for-profit organizations? A. GASB B. AICPA C. FASB
A
Assets that are not available for current operating purposes because donors have limited their use to a long-term purpose are considered ______. A. unrestricted B. restricted
B
Assets that are restricted as to their use should be ______. A. included with current assets on the statement of financial position B. reported separately from current assets on the statement of financial position
B
For a program to qualify as bona fide, it must meet which of the following criteria? A. purpose, audience, or content B. purpose, audience, and content C. purpose, fund-raising appeal, or content D. purpose, fund-raising appeal, and content
B
Identify the correct statement regarding the notes to financial statements for NFPs. A. The nature and amounts of unrestricted, temporarily restricted and permanently restricted net assets must always must be disclosed. B. Disclosures include principles applicable to for-profit entities unless there is a specific exemption for not-for-profit organizations. C. A note reporting the detail of reclassifications, investments and promises to give is required.
B
The statement of activities ______. A. reports operating, investing and financing activities broken down into proceeds from contributions restricted and other financing activities B. presents changes in net assets without donor restrictions, net assets with donor restrictions, and total net assets for the reporting period C. presents assets restricted as to use
B
The statement of financial position is also known as a(n) ______. A. income statement B. balance sheet C. statement of cash flows
B
When the agent or intermediary has the ability to redirect the assets it receives to an entity other than the beneficiary organization, ______. A. they are financially interrelated B. variance power exists
B
Which of the following is responsible for governmental not-for-profit organizations? A. FASB B. GASB C. AICPA
B
Which of the following statements is correct? A. The FASB is responsible for both governmental and nongovernmental not-for-profit entities. B. The FASB assumed primary responsibility for providing guidance on GAAP for not-for-profit entities. C. The GASB is responsible for governmental organizations and all not-for-profit organizations.
B
Donor-imposed restrictions are ______. A. separately reported in the statement of cash flows B. not reported in the statement of cash flows C. not separately reported in the statement of cash flows
C
Increases in net assets that relate to peripheral or incidental transactions of the entity and often are beyond the control of management are referred to as ______. A. exchanges B. revenues C. gains
C
Promises to give assets to an organization are commonly called ______ and can be conditional or unconditional. A. contributions B. donations C. pledges D. gains
C
Select the accurate statement regarding unconditional pledges. A. An unconditional promise to give depends on the recipient overcoming a barrier. B. The FASB indicates that if unconditional pledges will be received in less than a year, they can be recognized at the donor's cost. C. The FASB indicates that if unconditional pledges will be received in less than a year, they can be recognized at net realizable value.
C
Select the true statement regarding donated materials. A. FASB ASC 958-605-30-11 requires that all unconditional gifts, except for material amounts of donated materials, be reported at fair value. B. FASB ASC 958-605-30-11 requires that all unconditional gifts, including material amounts of donated materials, be reported at the donor's cost. C. FASB ASC 958-605-30-11 requires that all unconditional gifts, including material amounts of donated materials, be reported at fair value.
C
Similar to an agent and a trustee, a(n) ______ serves in a fiduciary capacity by helping with the transfer of assets between a donor and a beneficiary. A. pledge B. endowment C. intermediary
C
The FASB ______ to report expenses by their functional and natural classification. A. requires only voluntary health and welfare organizations B. does not require any NFP organization C. requires all NFP organizations
C
The statement of ______ is an operating statement that presents all changes in net assets without donor restrictions, net assets with donor restrictions, and total net assets for the reporting period. A. financial position B. functional expenses C. activities
C
The statement of financial position shows which of the following? A. assets, liabilities, other financing sources and uses, and net assets B. assets, liabilities, other financing sources and uses, and changes in fund balance C. total assets, total liabilities, and net assets D. total assets, total liabilities, and changes in fund balance
C
The FASB requires NFPs to report expenses by which of the following? A. functional classification only B. natural classification only C. neither functional nor natural classification D. both functional and natural classification
D
T/F: If an NFP receives the use of a building at a reduced rate, the difference between the rent paid and the fair market rental value should be reported as a contribution that is unrestricted.
T