Chat with AIExam 13: Accounting for Not-For-Profit Organizations
Expense amounts by natural classification can be determined from the statement of functional expenses,as can the expense amounts for program services and supporting services categories.
(79) 
VerifiedTrue
Under current accounting and reporting standards nongovernmental,not-for-profit organizations (NFPs)must utilize the fund accounting structure set forth in the AICPA Audit and Accounting Guide Not-for-Profit Entities.
(80) VerifiedFalse
Explain the accounting for contributions received by a financial intermediary.
(75) 
Answered by Examlex AI CopilotWhen a financial intermediary receives contributions, it must account for them in accordance with accounting standards and regulations. The accounting treatment for contributions received by a financial intermediary depends on the nature of the contributions and the purpose for which they are received.
If the contributions are received as donations or grants, they are typically recognized as income in the financial statements of the financial intermediary when the contributions are received or when the conditions attached to the contributions are met. The contributions are usually recorded as revenue and may be subject to specific reporting requirements, such as disclosures about the nature and purpose of the contributions.
On the other hand, if the contributions are received as investments or deposits, they are typically recorded as liabilities on the financial intermediary's balance sheet. The financial intermediary has an obligation to repay or return the contributions to the contributors, and as such, they are treated as liabilities until they are utilized for their intended purpose or returned to the contributors.
In some cases, contributions received by a financial intermediary may be earmarked for specific purposes, such as funding a particular project or program. In such instances, the financial intermediary may need to establish separate accounting records or funds to track the use of the contributions and ensure that they are used in accordance with the donors' intentions.
Overall, the accounting for contributions received by a financial intermediary involves careful consideration of the nature of the contributions, the conditions attached to them, and the purpose for which they are received, in order to accurately reflect the financial position and performance of the financial intermediary in its financial statements. It is important for the financial intermediary to adhere to accounting standards and regulations to ensure transparency and accountability in the reporting of contributions received.
Describe the difference between fund accounting and the accounting methods required by FASB.
(77) For each of the following unrelated transactions,record the journal entry that would be made by a nongovernmental,not-for-profit organization involved in medical research.If no journal entry is recorded,explain why there is no journal entry.
a.The entity received $1,500 in cash contributions.Of that amount,$1,000 is to be used for medical research.
b.The entity received pledges of $700,000 for its endowment fund.All pledges will be collected next year.
c.The entity received donated services of $1,200 from medical researchers who helped with the entity's on-going drug development research.It also received $300 in donated services from students,who helped clean the research facilities.
d.The entity paid medical research operating expenses of $5,000 that were related to restricted net assets it had received in prior years.
(95) The statement of financial position prepared by a nongovernmental NFP presents net assets in these categories: unrestricted,temporarily restricted,net investment in capital assets,and permanently restricted.
(92) Under FASB standards,which of the following contributions would not have to be reported as an asset on the statement of financial position of a not-for-profit organization?
(84) Donor-imposed restrictions must be clearly reflected in financial statements of not-for-profit organizations.
(78) Hospitals,colleges and universities,voluntary health and welfare organizations,and other not-for-profit organizations all follow the same standards for recognition of revenues and expenses.
(70) A statement of functional expenses is not required of all voluntary health and welfare organizations.
(79) GAAP for nongovernmental,not-for-profit organizations is set by the FASB and the AICPA.
(87) Which of the following would be considered "contribution revenue or support" of a not-for-profit organization?
(89) Under FASB standards the statement of activities for a not-for-profit organization is required to be separated into operating and nonoperating activity.
(75) Temporarily restricted net assets are released from restrictions
(81) If the program services expenses category includes both directly related costs and indirect costs allocated to it,why is it necessary to have a separate category of "supporting services expenses"?
Which of the following is a condition that must be met for contributed services to a not-for-profit organization (NFP)to be recorded as both a contribution and as an expense?
(87) Investments in equity securities that have a readily determinable market value and all debt securities of a not-for-profit organization are reported at
(71) Under FASB standards how would a not-for-profit organization recognize a conditional pledge?
(83) Which of the following is not one of the criteria specified in the FASB Codification for determining whether joint costs with a fund-raising appeal can be reported with program expenses rather than as fund- raising expenses?
(77) 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?
(87) 
Filters
- Essay(0)
- Multiple Choice(0)
- Short Answer(0)
- True False(0)
- Matching(0)