Question 1

Restricted contributions may be reported as unrestricted if the restriction has been met in the same period as the contribution is made.

Accepted Answer

A) True 
 B)False

Question 2

The basis of accounting used by not-for-profit organizations in their external financial reports is

Accepted Answer

A) Industry-specific basis of accounting. 
B) Cash basis of accounting. 
C) Modified accrual basis of accounting. 
D) Accrual basis of accounting. 
A) Industry-specific basis of accounting. 
B) Cash basis of accounting. 
C) Modified accrual basis of accounting. 
D) Accrual basis of accounting.

Question 3

In the statement of activities,FASB Statement No.117 requires revenues to be reported as increases in one of the three categories of net assets,depending on donor-imposed restrictions;however,all expenses should be reported as decreases in unrestricted net assets.

Accepted Answer

A) True 
 B)False

Question 4

The Friends of the Library FOL),a not-for-profit entity,received a gift restricted to the acquisition of a special piece of equipment used to restore books.Late last year FOL acquired the machine at a total cost of $19,000.The machine is estimated to have a useful life of eight years and a salvage value of $3,000.In what fund should FOL make the entry to record the depreciation for the current year?

Accepted Answer

A) Unrestricted fund. 
B) Temporarily restricted fund. 
C) Permanently restricted fund. 
D) FOL should not recognize depreciation. 
A) Unrestricted fund. 
B) Temporarily restricted fund. 
C) Permanently restricted fund. 
D) FOL should not recognize depreciation.

Question 5

Not-for-profit organizations should report contributions restricted for long-term purposes in which of the following cash flows categories?

Accepted Answer

A) Operating 
B) Financing. 
C) Capital financing. 
D) Investing. 
A) Operating 
B) Financing. 
C) Capital financing. 
D) Investing.

Question 6

How should receipt of the grant be recorded?

Accepted Answer

A) Debit Cash;Credit Revenue from contributions unrestricted fund) 
B) Debit Cash;Credit Revenue from contributions temporarily restricted fund) 
C) Debit Cash;Credit Revenue from contributions permanently restricted fund) 
D) No entry required until the grant funds are spent. 
A) Debit Cash;Credit Revenue from contributions unrestricted fund) 
B) Debit Cash;Credit Revenue from contributions temporarily restricted fund) 
C) Debit Cash;Credit Revenue from contributions permanently restricted fund) 
D) No entry required until the grant funds are spent.

Question 7

St.Mary's Extended Care Center,a not-for-profit entity,enjoys the services of a group of high-school-age people who each agree to work three afternoons a week for three hours each afternoon performing a variety of patient-related services,such as writing letters for those who are unable to do so,delivering mail to the patient rooms,and pushing wheel-chair patients across the grounds.The services rendered by these young people enhance the quality of life for the residents.They could not be provided if they were not donated because there are not enough resources to do so.The past year the young people donated 5,000 hours in total.The services would have cost $6.00 per hour if they had been purchased but they were worth $10 an hour to St.Mary's.What is the amount of contributed revenue that should be recognized by St.Mary's related to these services?

Accepted Answer

A) $50,000. 
B) $30,000 
C) $0. 
D) Cannot determine. 
A) $50,000. 
B) $30,000 
C) $0. 
D) Cannot determine.

Question 8

Traditional financial ratios,such as measures of liquidity and debt burden,are seldom useful for assessing the fiscal health of not-for-profits.

Accepted Answer

A) True 
 B)False

Question 9

The increase in temporarily restricted net assets in 2013 as a result of the fund-raising drive is

Accepted Answer

A) $1,200,000. 
B) $1,050,000. 
C) $800,000. 
D) $250,000. 
A) $1,200,000. 
B) $1,050,000. 
C) $800,000. 
D) $250,000.

Question 10

Not-for-profit organizations report their cash flows in which of the following categories?

Accepted Answer

A) Operating,noncapital financing,capital financing,investing. 
B) Operating,noncapital financing,investing. 
C) Operating,capital financing,investing. 
D) Operating,financing,investing. 
A) Operating,noncapital financing,capital financing,investing. 
B) Operating,noncapital financing,investing. 
C) Operating,capital financing,investing. 
D) Operating,financing,investing.

Question 11

Revenue from an exchange transaction may be classified as an increase in which class of net assets?

Accepted Answer

A) Unrestricted net assets. 
B) Temporarily restricted net assets. 
C) Permanently restricted net assets. 
D) Any of the above. 
A) Unrestricted net assets. 
B) Temporarily restricted net assets. 
C) Permanently restricted net assets. 
D) Any of the above.

Question 12

In the current year National Pet Charities,which uses fund-type accounting to maintain its books and records,received a $30,000 contribution to help educate people on responsible pet ownership.During the current year,the entry to record this donation is

Accepted Answer

A) UNRESTRICTED FUND.No entry. RESTRICTED FUND.Debit Cash $30,000;Credit Revenues $30,000. 
B) UNRESTRICTED FUND.No entry. RESTRICTED FUND.Debit Cash $30,000;Credit Net assets $30,000. 
C) UNRESTICTED FUND.Debit Cash $30,000;Credit Revenues $30,000. RESTRICTED FUND.No entry. 
D) UNRESTRICTED FUND.Debit Cash $30,000;Credit Net assets $30,000. 
A) UNRESTRICTED FUND.No entry. RESTRICTED FUND.Debit Cash $30,000;Credit Revenues $30,000. 
B) UNRESTRICTED FUND.No entry. RESTRICTED FUND.Debit Cash $30,000;Credit Net assets $30,000. 
C) UNRESTICTED FUND.Debit Cash $30,000;Credit Revenues $30,000. RESTRICTED FUND.No entry. 
D) UNRESTRICTED FUND.Debit Cash $30,000;Credit Net assets $30,000.

Question 13

Which of the following entities should recognize depreciation expense on its operating statement?

Accepted Answer

A) Not-for-profit university. 
B) Not-for-profit foundation. 
C) Not-for-profit hospital. 
D) All of the above. 
A) Not-for-profit university. 
B) Not-for-profit foundation. 
C) Not-for-profit hospital. 
D) All of the above.

Question 14

In the current year a not-for-profit entity received a contribution of $100,000 to use for scholarships.The entity had budgeted $400,000 for scholarships in the current year and it disbursed $350,000 for scholarships.The amount the entity can consider as 'released from restriction' in the current year is

Accepted Answer

A) $0. 
B) $100,000. 
C) $350,000. 
D) $400,000. 
A) $0. 
B) $100,000. 
C) $350,000. 
D) $400,000.

Question 15

FASB Statement No.93 makes the recognition of depreciation on plant and equipment assets optional at the discretion of the not-for-profit.

Accepted Answer

A) True 
 B)False

Question 16

In 2014,the change in temporarily restricted net assets is

Accepted Answer

A) $0 
B) $200,000 decrease. 
C) $200,000 increase. 
D) $1,000,000 decrease. 
A) $0 
B) $200,000 decrease. 
C) $200,000 increase. 
D) $1,000,000 decrease.

Question 17

Temporarily restricted funds related to plant and equipment generally account only for resources restricted to their purchase or construction,not for the plant and equipment itself,which are typically reported in the unrestricted fund.

Accepted Answer

A) True 
 B)False

Question 18

In 2014,the change in unrestricted net assets is

Accepted Answer

A) $0 
B) $200,000 increase. 
C) $200,000 decrease. 
D) $1,000,000 increase. 
A) $0 
B) $200,000 increase. 
C) $200,000 decrease. 
D) $1,000,000 increase.

Question 19

Nelson County Historical museum,a not-for-profit entity that capitalizes its collection items,received a gift of several Civil War artifacts to be used for display and research.The donor found these items while cleaning out the closet of an old house.The fair value is hard to estimate but a dealer in these types of artifacts estimates their value at $2,000.The entry to record this donation is

Accepted Answer

A) Debit Collection expense,$2,000;Credit Contributions revenue $2,000. 
B) Debit Collection items $2,000;Credit Contributions revenue $2,000. 
C) No entry is required because the cost to the donor was $0. 
D) No entry required because the value of the items is estimated. 
A) Debit Collection expense,$2,000;Credit Contributions revenue $2,000. 
B) Debit Collection items $2,000;Credit Contributions revenue $2,000. 
C) No entry is required because the cost to the donor was $0. 
D) No entry required because the value of the items is estimated.

Question 20

During the year,a not-for-profit entity received $30,000 in dividends and $24,000 in interest on its investment portfolio.The entity also accrued $6,000 in interest on the portfolio.The increase in fair value of the portfolio during the year was $8,000.How much should the entity report as investment earnings during the year?

Accepted Answer

A) $62,000. 
B) $54,000. 
C) $8,000. 
D) $0. 
A) $62,000. 
B) $54,000. 
C) $8,000. 
D) $0.

Restricted contributions may be reported as unrestricted if the restriction has been met in the same period as the contribution is made.

The basis of accounting used by not-for-profit organizations in their external financial reports is

In the statement of activities,FASB Statement No.117 requires revenues to be reported as increases in one of the three categories of net assets,depending on donor-imposed restrictions;however,all expenses should be reported as decreases in unrestricted net assets.

Not-for-profit organizations should report contributions restricted for long-term purposes in which of the following cash flows categories?

How should receipt of the grant be recorded?

Traditional financial ratios,such as measures of liquidity and debt burden,are seldom useful for assessing the fiscal health of not-for-profits.

The increase in temporarily restricted net assets in 2013 as a result of the fund-raising drive is

Not-for-profit organizations report their cash flows in which of the following categories?

Revenue from an exchange transaction may be classified as an increase in which class of net assets?

In the current year National Pet Charities,which uses fund-type accounting to maintain its books and records,received a $30,000 contribution to help educate people on responsible pet ownership.During the current year,the entry to record this donation is

Which of the following entities should recognize depreciation expense on its operating statement?

FASB Statement No.93 makes the recognition of depreciation on plant and equipment assets optional at the discretion of the not-for-profit.

In 2014,the change in temporarily restricted net assets is

Temporarily restricted funds related to plant and equipment generally account only for resources restricted to their purchase or construction,not for the plant and equipment itself,which are typically reported in the unrestricted fund.

In 2014,the change in unrestricted net assets is

The Government and Not-For-Profit Environment

Fund Accounting

Issues of Budgeting and Control

Recognizing Revenues in Governmental Funds

Recognizing Expenditures in Governmental Funds

Accounting for Capital Projects and Debt Service

Capital Assets and Investments in Marketable Securities

Long-Term Obligations

Business-Type Activities

Fiduciary Funds and Permanent Funds

Issues of Reporting, Disclosure, and Financial Analysis

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Not-For-Profit Organizations

Federal Government Accounting

Filters

Exam 12: Not-For-Profit Organizations

Restricted contributions may be reported as unrestricted if the restriction has been met in the same period as the contribution is made.

The basis of accounting used by not-for-profit organizations in their external financial reports is

In the statement of activities,FASB Statement No.117 requires revenues to be reported as increases in one of the three categories of net assets,depending on donor-imposed restrictions;however,all expenses should be reported as decreases in unrestricted net assets.

Not-for-profit organizations should report contributions restricted for long-term purposes in which of the following cash flows categories?

How should receipt of the grant be recorded?

Traditional financial ratios,such as measures of liquidity and debt burden,are seldom useful for assessing the fiscal health of not-for-profits.

The increase in temporarily restricted net assets in 2013 as a result of the fund-raising drive is

Not-for-profit organizations report their cash flows in which of the following categories?

Revenue from an exchange transaction may be classified as an increase in which class of net assets?

In the current year National Pet Charities,which uses fund-type accounting to maintain its books and records,received a $30,000 contribution to help educate people on responsible pet ownership.During the current year,the entry to record this donation is

Which of the following entities should recognize depreciation expense on its operating statement?

FASB Statement No.93 makes the recognition of depreciation on plant and equipment assets optional at the discretion of the not-for-profit.

In 2014,the change in temporarily restricted net assets is

Temporarily restricted funds related to plant and equipment generally account only for resources restricted to their purchase or construction,not for the plant and equipment itself,which are typically reported in the unrestricted fund.

In 2014,the change in unrestricted net assets is

The Government and Not-For-Profit Environment

Fund Accounting

Issues of Budgeting and Control

Recognizing Revenues in Governmental Funds

Recognizing Expenditures in Governmental Funds

Accounting for Capital Projects and Debt Service

Capital Assets and Investments in Marketable Securities

Long-Term Obligations

Business-Type Activities

Fiduciary Funds and Permanent Funds

Issues of Reporting, Disclosure, and Financial Analysis

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Not-For-Profit Organizations

Federal Government Accounting

Filters