Exam 14: Accounting for Not-for-Profit Organizations

Which of the following terms is used to indicate that a donor provided a gift with explicit instructions that the gift is to be used for a specific purpose by the not-for-profit but the entire amount may be spent right away?

The FASB requires that support from special events, if related to the central ongoing and major activities of the organization, and related direct costs, be reported at their gross amounts in the statement of activities.

The mission of the not-for-profit organization, Save Our Butterflies Foundation, is to provide research and education concerning the conservation of butterflies. Which of the following expenses would be reported as a support expense by the Foundation?

Museums and religious organizations reporting in accordance with FASB must capitalize and report assets such as works of art, historical treasures, and similar collectible items if they are held for public inspection.

Contributions received in a prior period and restricted by the donor for construction of a building were reported as increases to net assets with donor restrictions in the period received. When the building is constructed in a subsequent period a not-for-profit would report contributions for the amount released from restrictions.

Organizations that have the power to enact and enforce a tax levy are nongovernmental not-for-profits.

According to the FASB, a not-for-profit arts organization would report the account Provision for Uncollectible Pledges as which of the following?

Which of the following would be considered "contribution revenue or support" of a not-for-profit organization under FASB standards?

Goodwill created because a not-for-profit organization obtains control of another organization is always recorded as an asset.

The FASB requires not-for-profit organizations to report expenses by nature and function in the notes to the financial statements.

Responsibility for establishing generally accepted accounting principles (GAAP) for nongovernmental, not-for-profit organizations rests with the FASB and was most clearly established:

When a nongovernmental not-for-profit organization spends money for the purpose for which an external donor intended, the expense is reported as a:

The FASB requires investments in equity securities that have a readily determinable market value of a not-for-profit organization be reported at:

In accordance with FASB standards, securities donated to a not-for-profit organization should be recorded at the:

For financial reasons, two not-for-profit hospice organizations (hospices A and B) decided to combine. As a result of the combination, the assets and liabilities of the combined hospice were reported at the amounts that had been previously reported by A and B on their financial statements. Under the FASB, the combining of hospices A and B would be classified as which of the following?

Not-for-profits are required to report expense amounts by natural classification and functional classification.

A not-for-profit (NFP) organization acting as a financial intermediary receives a contribution. Under the FASB Codification the NFP would be most likely to recognize the contribution as a liability under which of the following situations?

Under current accounting and reporting standards, nongovernmental not-for-profit organizations must utilize the fund accounting structure set forth in the AICPA Audit and Accounting Guide Not-for-Profit Entities.

Similarity in the characteristics of nongovernmental not-for-profit (NFP) organizations and governmental NFP organizations can make it difficult to determine whether the NFP is nongovernmental or governmental in nature.

Cash received by a nongovernmental not-for-profit organization in year 1 that the donor stipulates is to cover operating expenses of the following year should be recognized as an increase in net assets with donor restrictions in year 1 and as net assets released from restrictions in year 2.