Exam 12: Not-For-Profit Organizations

The increase in unrestricted net assets in 2016 as a result of the fund-raising drive is

The National Association for the Preservation of Wildlife received $10,000 from a benefactor to support the overall objective of the organization.This amount will be recognized as revenue

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

In a prior year, United Charities received a $125,000 gift to be used to acquire vans to provide transportation for physically challenged adults.During the current year, United acquired two vans at a cost of $75,000 each.The appropriate entry(ies)to record the acquisition is

A generous benefactor pledges $1 million to The R.J.Smith Foundation, a not-for-profit entity that promotes the arts.The gift is to be used to provide scholarships for talented musicians at a music camp operated by the Foundation.The gift was given in August 2013 to support the Summer 2014 music program.The foundation director argues that the gift is a conditional restricted gift and therefore cannot be recognized as revenue in 2013.The accountant argues that the gift is an unconditional restricted gift and must be recognized in the current year.What is the basis for the director's argument? What is the basis for the accountant's argument? In your answer provide an explanation of the terms conditional, unconditional, restricted and unrestricted.

When should a not-for-profit entity recognize pledge revenue that is contingent upon raising a matching amount?

FASB Statement No.117 directs that revenues and expenses be reported in a statement of financial position.

Simplex Games, a not-for-profit entity organized to provide athletic competition opportunities for high school students, utilizes a number of volunteers in carrying out its mission.At the 2017 Games 50 volunteers provided a total of 1,000 hours of service performing tasks such as picking up litter and delivering water to the athletes.A local CPA firm donates its services to prepare the annual tax return and other federal and state required paperwork which must be filed to maintain its status as a tax-exempt organization.During 2017 the CPA firm provided 50 hours of service.If purchased, the CPA services would have cost $60 per hour and the game workers would have cost $6 per hour.How much contributed service revenue should Simplex Games recognize in 2017?

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

Unlike governments, not-for-profits should not recognize contributions of art collections as revenue unless they capitalize them.

Per FASB standards, not-for-profits must classify their net assets into three classes.What is the basis for distinguishing the three classes? What is the rationale for this basis? How is each class defined?

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

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?

A donor pledges $100,000 to the Shakespeare Foundation to be used only to support the summer Shakespeare Theater-an event that has been held every summer for 38 years.This is an example of a

A not-for-profit would include which of the following financial statements in its basic financial statements?

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

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

The primary source of authoritative accounting and financial reporting guidance for a private college is the AICPA.

Music Lovers Foundation, a not-for-profit governed by an independent board, was founded to support the Northern State University Choir until such time as the state legislature adequately funds the choir.When the choir is adequately funded by appropriation, the Foundation may direct resources to other music projects that it deems acceptable.When Music Lovers accepts a contribution from a donor it should debit cash and/or other assets and credit

Open Air Conservatory, a not-for-profit entity, held a fund-raising drive to raise money to buy land to provide a habitat for the endangered Sleepy Eagle.A donor pledged $1 million to the project provided that Open Air Conservatory was able to raise an additional $1.5 million from other sources.What entry should Open Air Conservatory make at the time of the $1 million pledge?