Question 1

The FASB requires the balance sheets of not-for-profits to display

Accepted Answer

A) Net assets in four separate categories-unrestricted, temporarily restricted, permanently restricted, and restricted by creditors. 
B) Three separate funds-unrestricted, temporarily restricted, and permanently restricted net assets. 
C) Six totals-total assets, total liabilities, total net assets, total unrestricted net assets, total temporarily restricted net assets, and total permanently restricted net assets. 
D) Unrestricted, temporarily restricted, and permanently restricted retained earnings. 
A) Net assets in four separate categories-unrestricted, temporarily restricted, permanently restricted, and restricted by creditors. 
B) Three separate funds-unrestricted, temporarily restricted, and permanently restricted net assets. 
C) Six totals-total assets, total liabilities, total net assets, total unrestricted net assets, total temporarily restricted net assets, and total permanently restricted net assets. 
D) Unrestricted, temporarily restricted, and permanently restricted retained earnings.

Question 2

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 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

In a not-for-profit organization, wages and salaries should be recorded

Accepted Answer

A) As expenses in either a temporarily restricted or an unrestricted fund, depending on the source of the resources. 
B) As expenses in a temporarily restricted fund. 
C) As expenses in an unrestricted fund. 
D) As expenses in an unrestricted fund, with a credit to net assets released from restrictions. 
A) As expenses in either a temporarily restricted or an unrestricted fund, depending on the source of the resources. 
B) As expenses in a temporarily restricted fund. 
C) As expenses in an unrestricted fund. 
D) As expenses in an unrestricted fund, with a credit to net assets released from restrictions.

Question 5

Revenues of a not-for-profit organization should be reported as

Accepted Answer

A) Increases in one of the three categories of net assets. 
B) Increases in unrestricted net assets. 
C) Increases in temporarily restricted net assets. 
D) Increases in permanently restricted net assets. 
A) Increases in one of the three categories of net assets. 
B) Increases in unrestricted net assets. 
C) Increases in temporarily restricted net assets. 
D) Increases in permanently restricted net assets.

Question 6

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 7

A not-for-profit art museum that has elected not to capitalize its art collection receives a donation of a rare piece of Tlinket Indian art.The donor paid $8,000 for the piece several years ago.Today the piece has an estimated fair value of $50,000.What entry should the art museum make upon receipt of this donation?

Accepted Answer

A) Debit Collection items $50,000; Credit Donated revenue $50,000. 
B) Debit Collection items $8,000; Credit Donated revenue $8,000. 
C) Debit Collection items $50,000; Credit Unrestricted net assets $50,000. 
D) No entry required. 
A) Debit Collection items $50,000; Credit Donated revenue $50,000. 
B) Debit Collection items $8,000; Credit Donated revenue $8,000. 
C) Debit Collection items $50,000; Credit Unrestricted net assets $50,000. 
D) No entry required.

Question 8

Grace Church, a not-for-profit entity, operates a school in connection with the church.This year members of the church decided to construct a new wing on the school with six classrooms.The church hired an architect and a construction supervisor.The bulk of the labor for construction was donated by church members who were willing workers but not necessarily skilled carpenters.Materials for the construction cost $600,000 and the paid labor was $200,000.The fair value of the completed building is $2 million.When the building is completed what should be the balance in the asset account "Building" and the account "Contributed revenue"?

Accepted Answer

A) Building $800,000; Contributed Revenue $0. 
B) Building $800,000; Contributed Revenue $1,200,000. 
C) Building $2 million; Contributed Revenue $1,200,000. 
D) Building $2 million; Contributed Revenue $0. 
A) Building $800,000; Contributed Revenue $0. 
B) Building $800,000; Contributed Revenue $1,200,000. 
C) Building $2 million; Contributed Revenue $1,200,000. 
D) Building $2 million; Contributed Revenue $0.

Question 9

The FASB requires that all not-for-profit organizations report expenses

Accepted Answer

A) By object. 
B) By function. 
C) By natural classification. 
D) By budget code. 
A) By object. 
B) By function. 
C) By natural classification. 
D) By budget code.

Question 10

In accounting for investments, not-for-profits, like businesses, must report their investments at fair value and classify the investments as trading, or available-for-sale, or held-to-maturity.

Accepted Answer

A) True 
 B)False

Question 11

Native Art Museum, a not-for-profit entity that elects not to capitalize its collection items, purchased for $10,000 a wonderful totem pole for display near the door of the museum.As a result of this transaction, which of the following entries should be made?

Accepted Answer

A) Debit Collection items $10,000; Credit Cash $10,000. 
B) Debit Collection expense $10,000; Credit Cash $10,000. 
C) Debit Unrestricted net assets $10,000; Credit Cash $10,000. 
D) No entry is required. 
A) Debit Collection items $10,000; Credit Cash $10,000. 
B) Debit Collection expense $10,000; Credit Cash $10,000. 
C) Debit Unrestricted net assets $10,000; Credit Cash $10,000. 
D) No entry is required.

Question 12

Expenses incurred by not-for-profit organizations should be reported as

Accepted Answer

A) Decreases in one of the three categories of net assets. 
B) Decreases in unrestricted net assets. 
C) Decreases in temporarily restricted net assets. 
D) Decreases in permanently restricted net assets. 
A) Decreases in one of the three categories of net assets. 
B) Decreases in unrestricted net assets. 
C) Decreases in temporarily restricted net assets. 
D) Decreases in permanently restricted net assets.

Question 13

United Charities accepted a contribution from a donor and agreed to transfer the assets to Aid for Friends, a not-for-profit that provides temporary shelter to the homeless.United Charities should debit cash or other assets and credit

Accepted Answer

A) Unrestricted revenue. 
B) Temporarily restricted revenue. 
C) Liability to Aid for Friends. 
D) United Charities should not make an entry. 
A) Unrestricted revenue. 
B) Temporarily restricted revenue. 
C) Liability to Aid for Friends. 
D) United Charities should not make an entry.

Question 14

In 2017, 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 15

Whether a not-for-profit's resources are classified as restricted or unrestricted depends on the presence or absence of donor stipulations.

Accepted Answer

A) True 
 B)False

Question 16

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 17

Expenses should be classified as unrestricted or temporarily restricted, consistent with the classification of the resources used to finance them.

Accepted Answer

A) True 
 B)False

Question 18

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 19

The increase in temporarily restricted net assets in 2016 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 20

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. RESTRICTED FUND.No entry. 
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. RESTRICTED FUND.No entry.

The FASB requires the balance sheets of not-for-profits to display

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

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.

In a not-for-profit organization, wages and salaries should be recorded

Revenues of a not-for-profit organization should be reported as

The FASB requires that all not-for-profit organizations report expenses

In accounting for investments, not-for-profits, like businesses, must report their investments at fair value and classify the investments as trading, or available-for-sale, or held-to-maturity.

Native Art Museum, a not-for-profit entity that elects not to capitalize its collection items, purchased for $10,000 a wonderful totem pole for display near the door of the museum.As a result of this transaction, which of the following entries should be made?

Expenses incurred by not-for-profit organizations should be reported as

United Charities accepted a contribution from a donor and agreed to transfer the assets to Aid for Friends, a not-for-profit that provides temporary shelter to the homeless.United Charities should debit cash or other assets and credit

In 2017, the change in unrestricted net assets is

Whether a not-for-profit's resources are classified as restricted or unrestricted depends on the presence or absence of donor stipulations.

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

Expenses should be classified as unrestricted or temporarily restricted, consistent with the classification of the resources used to finance them.

How should receipt of the grant be recorded?

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

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

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

Pensions and Other Fiduciary Activities

Issues of Reporting, Disclosure, and Financial Analysis

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Notforprofit Organizations

Federal Government Accounting

Filters

Exam 12: Not-For-Profit Organizations

The FASB requires the balance sheets of not-for-profits to display

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

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.

In a not-for-profit organization, wages and salaries should be recorded

Revenues of a not-for-profit organization should be reported as

The FASB requires that all not-for-profit organizations report expenses

In accounting for investments, not-for-profits, like businesses, must report their investments at fair value and classify the investments as trading, or available-for-sale, or held-to-maturity.

Native Art Museum, a not-for-profit entity that elects not to capitalize its collection items, purchased for $10,000 a wonderful totem pole for display near the door of the museum.As a result of this transaction, which of the following entries should be made?

Expenses incurred by not-for-profit organizations should be reported as

United Charities accepted a contribution from a donor and agreed to transfer the assets to Aid for Friends, a not-for-profit that provides temporary shelter to the homeless.United Charities should debit cash or other assets and credit

In 2017, the change in unrestricted net assets is

Whether a not-for-profit's resources are classified as restricted or unrestricted depends on the presence or absence of donor stipulations.

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

Expenses should be classified as unrestricted or temporarily restricted, consistent with the classification of the resources used to finance them.

How should receipt of the grant be recorded?

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

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

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

Pensions and Other Fiduciary Activities

Issues of Reporting, Disclosure, and Financial Analysis

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Notforprofit Organizations

Federal Government Accounting

Filters