Exam 12: Not-For-Profit Organizations

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

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

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

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

What is a charitable remainder trust? How should it be accounted for?

Not-for-profits generally should not recognize as revenues contributions that they have agreed to pass along to other specific beneficiaries.

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.

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

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

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

The focus on donor-mandated restrictions imposes special responsibilities on management to utilize the funds as the donor requested.

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

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

For each of the cases below, state whether the contributed services would be recognized and, if so, how much would be recognized and how it would be recognized. Explain your answer in terms of the existing standards. Also explain why, in your opinion, the standards permit or prohibit recognition of this particular type of contribution. a. A church votes to construct a new educational wing on its existing facility. The church will hire an architect to design the new wing and a construction supervisor to oversee the construction. Church members will provide most of the labor for the construction. Labor donated by members who have construction experience or who are considered professional craftsmen at the prevailing wage for their trade or craft is $500,000. Labor donated by persons possessing non-building specialized skills (doctors, teachers, lawyers, etc.) at their prevailing wage rates is $700,000. Labor donated by non-professionals measured at the minimum wage is $300,000. The appraised value of the building when completed is $3 million. The architect was paid $700,000, the construction supervisor was paid $50,000 and the materials purchased for use in the building cost $1 million. b. An investment advisor, a member of the board of No Fleas Please, a not-for-profit animal care organization, provides pro bono investment advice to NFP. NFP does not have a particularly large investment portfolio and, without the advice of the board member, NFP probably would invest its idle cash in certificates of deposit at an insured commercial bank to protect itself against loss of principal. If the investment advisor had provided similar services to his customers he would have charged $2,000. c. Members of a religious order provide professional nursing services for a healthcare facility that is run by their order. The members are not compensated but their order provides lodging, food, and other necessities, the cost of which is paid by the healthcare entity and classified as nursing services expense. At the end of the year the balance in the nursing services expense account is $3 million. The value of the nursing services provided, measured at the prevailing wage for nurses, is $5 million.

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

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?

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

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

In 2017, the change in unrestricted net assets is