Question 1

How is the receipt of an unconditional pledge to contribute to a private not-for-profit organization recorded?

Accepted Answer

A)  Not recorded until received. 
B)  As revenue when pledged. 
C)  As unearned revenue when pledged. 
D)  None of the above. 
A)  Not recorded until received. 
B)  As revenue when pledged. 
C)  As unearned revenue when pledged. 
D)  None of the above. B

Question 2

Contributions to a private not-for-profit are recorded at fair market value at the date of receipt.

Accepted Answer

A) True 
 B)False  True

Question 3

Contributions to a private not-for-profit may not be restricted as to time,purpose or for plant acquisition.

Accepted Answer

A) True 
 B)False  False

Question 4

A Statement of Functional Expenses presents a matrix of expenses classified by function and by object or natural classification.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following would not be recognized as contribution revenue by a private not-for-profit organization?

Accepted Answer

A)  A pledge to support an educational program for the next 3 years. 
B)  A gift restricted to purchase equipment. 
C)  A health clinic is paid to perform clinical trials of a new medicine. 
D)  Dues paid in excess of the fair value of benefits received. 
A)  A pledge to support an educational program for the next 3 years. 
B)  A gift restricted to purchase equipment. 
C)  A health clinic is paid to perform clinical trials of a new medicine. 
D)  Dues paid in excess of the fair value of benefits received.

Question 6

Which of the following is a legitimate reason for a private not-for-profit organization to have a surplus (increase in net assets)?

Accepted Answer

A)  To establish working capital. 
B)  To retire debt. 
C)  Expand or replace physical facilities. 
D)  All of the above. 
A)  To establish working capital. 
B)  To retire debt. 
C)  Expand or replace physical facilities. 
D)  All of the above.

Question 7

The FASB has the authority to set accounting standards for all of the following organizations except:

Accepted Answer

A)  Political parties. 
B)  City owned hospital. 
C)  For profit hospitals. 
D)  Trade associations. 
A)  Political parties. 
B)  City owned hospital. 
C)  For profit hospitals. 
D)  Trade associations.

Question 8

Private not-for-profit organizations are required to present a Statement of Functional Expenses instead of a Statement of Cash Flows,as required of businesses.

Accepted Answer

A) True 
 B)False

Question 9

The FASB requires that expenses of voluntary health and welfare organizations be reported according to function.Which of the following are FASB required function categories:

Accepted Answer

A)  Operating and Nonoperating 
B)  Program and Supporting Services. 
C)  Operating, Investing and Financing. 
D)  Capital and Noncapital Related 
A)  Operating and Nonoperating 
B)  Program and Supporting Services. 
C)  Operating, Investing and Financing. 
D)  Capital and Noncapital Related

Question 10

Which of the following would be a contribution increasing permanently restricted net assets?

Accepted Answer

A)  A contribution by a donor in the amount of $1,000,000, set aside by the governing board as funds not to be expended. 
B)  A contribution by a donor in the amount of $1,000,000 to be used to acquire fixed assets. 
C)  A contribution of $1,000,000 to fund an endowment. 
D)  None of the above. 
A)  A contribution by a donor in the amount of $1,000,000, set aside by the governing board as funds not to be expended. 
B)  A contribution by a donor in the amount of $1,000,000 to be used to acquire fixed assets. 
C)  A contribution of $1,000,000 to fund an endowment. 
D)  None of the above.

Question 11

A donor gave $60,000 to a nongovernmental,not-for-profit charity with instructions that the funds be transferred to Sam Smith,an individual who lost his home in a fire.The not-for-profit would:

Accepted Answer

A)  Record the $60,000 cash and credit a liability. 
B)  Record the $60,000 cash and credit temporarily restricted revenue. 
C)  Do either (a) or (b), depending upon the policy of the not-for-profit. 
D)  Not record the transaction, because the money is going directly to the intended recipient. 
A)  Record the $60,000 cash and credit a liability. 
B)  Record the $60,000 cash and credit temporarily restricted revenue. 
C)  Do either (a) or (b), depending upon the policy of the not-for-profit. 
D)  Not record the transaction, because the money is going directly to the intended recipient.

Question 12

While many private not-for-profit organizations use funds for internal purposes,the financial statements do not report separate funds.

Accepted Answer

A) True 
 B)False

Question 13

Care Foundation is a voluntary health and welfare organization funded by contributions from the general public.In its Statement of Activities,the annual provision for depreciation should:

Accepted Answer

A)  Not be included. 
B)  Be included as an element of support. 
C)  Be included as an element of changes in fund balances. 
D)  Be included as an element of expense. 
A)  Not be included. 
B)  Be included as an element of support. 
C)  Be included as an element of changes in fund balances. 
D)  Be included as an element of expense.

Question 14

Cash flows must be presented separately in the Statement of Cash Flows for the three classes (unrestricted,temporarily restricted,and permanently restricted).

Accepted Answer

A) True 
 B)False

Question 15

FASB Statement 124,Accounting for Certain Investments of Not-for-Profit Organizations,requires investments by a not-for-profit in debt securities and equity securities to be carried at fair value.

Accepted Answer

A) True 
 B)False

Question 16

An intention to give (such as being named in a will)is the same as an unconditional promise to give and can be recorded as revenue when the intention is made known.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not a characteristic that distinguishes a private not-for-profit organization from a business?

Accepted Answer

A) Contributions are from resource providers who expect nothing in return. 
B) Financial statements are intended primarily for use by donors. 
C) The organization's revenues exceed expenses. 
D) Absence of ownership interests. 
A) Contributions are from resource providers who expect nothing in return. 
B) Financial statements are intended primarily for use by donors. 
C) The organization's revenues exceed expenses. 
D) Absence of ownership interests.

Question 18

Accounting practices of private sector not-for-profit organizations are influenced by two AICPA audit and accounting guides:
 Not-for-Profit Organizations and Health Care Organizations.

Accepted Answer

A) True 
 B)False

Question 19

What financial ratio is most commonly used to evaluate charitable organizations?

Accepted Answer

A)  Current assets / current liabilities. 
B)  Program expenses / total expenses. 
C)  Increase in net assets / total assets. 
D)  Total expenses / total revenues. 
A)  Current assets / current liabilities. 
B)  Program expenses / total expenses. 
C)  Increase in net assets / total assets. 
D)  Total expenses / total revenues.

Question 20

Private not-for-profits use the modified accrual basis and do not record fixed assets or long-term debt.

Accepted Answer

A) True 
 B)False

How is the receipt of an unconditional pledge to contribute to a private not-for-profit organization recorded?

Contributions to a private not-for-profit are recorded at fair market value at the date of receipt.

Contributions to a private not-for-profit may not be restricted as to time,purpose or for plant acquisition.

A Statement of Functional Expenses presents a matrix of expenses classified by function and by object or natural classification.

Which of the following would not be recognized as contribution revenue by a private not-for-profit organization?

Which of the following is a legitimate reason for a private not-for-profit organization to have a surplus (increase in net assets)?

The FASB has the authority to set accounting standards for all of the following organizations except:

Private not-for-profit organizations are required to present a Statement of Functional Expenses instead of a Statement of Cash Flows,as required of businesses.

The FASB requires that expenses of voluntary health and welfare organizations be reported according to function.Which of the following are FASB required function categories:

Which of the following would be a contribution increasing permanently restricted net assets?

A donor gave $60,000 to a nongovernmental,not-for-profit charity with instructions that the funds be transferred to Sam Smith,an individual who lost his home in a fire.The not-for-profit would:

While many private not-for-profit organizations use funds for internal purposes,the financial statements do not report separate funds.

Care Foundation is a voluntary health and welfare organization funded by contributions from the general public.In its Statement of Activities,the annual provision for depreciation should:

Cash flows must be presented separately in the Statement of Cash Flows for the three classes (unrestricted,temporarily restricted,and permanently restricted).

FASB Statement 124,Accounting for Certain Investments of Not-for-Profit Organizations,requires investments by a not-for-profit in debt securities and equity securities to be carried at fair value.

An intention to give (such as being named in a will)is the same as an unconditional promise to give and can be recorded as revenue when the intention is made known.

Which of the following is not a characteristic that distinguishes a private not-for-profit organization from a business?

Accounting practices of private sector not-for-profit organizations are influenced by two AICPA audit and accounting guides: Not-for-Profit Organizations and Health Care Organizations.

What financial ratio is most commonly used to evaluate charitable organizations?

Private not-for-profits use the modified accrual basis and do not record fixed assets or long-term debt.

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Proprietary Funds

Fiduciary Funds, Inter-fund Transactions

Government-Wide Statements: Capital Assets; Long-Term Debt

Accounting for Special-Purpose Entities Including Public Colleges and Universities

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Auditing, Tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

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Exam 10: Accounting for Private Not-For-Profit Organizations

How is the receipt of an unconditional pledge to contribute to a private not-for-profit organization recorded?

Contributions to a private not-for-profit are recorded at fair market value at the date of receipt.

Contributions to a private not-for-profit may not be restricted as to time,purpose or for plant acquisition.

A Statement of Functional Expenses presents a matrix of expenses classified by function and by object or natural classification.

Which of the following would not be recognized as contribution revenue by a private not-for-profit organization?

Which of the following is a legitimate reason for a private not-for-profit organization to have a surplus (increase in net assets)?

The FASB has the authority to set accounting standards for all of the following organizations except:

Private not-for-profit organizations are required to present a Statement of Functional Expenses instead of a Statement of Cash Flows,as required of businesses.

The FASB requires that expenses of voluntary health and welfare organizations be reported according to function.Which of the following are FASB required function categories:

Which of the following would be a contribution increasing permanently restricted net assets?

A donor gave $60,000 to a nongovernmental,not-for-profit charity with instructions that the funds be transferred to Sam Smith,an individual who lost his home in a fire.The not-for-profit would:

While many private not-for-profit organizations use funds for internal purposes,the financial statements do not report separate funds.

Care Foundation is a voluntary health and welfare organization funded by contributions from the general public.In its Statement of Activities,the annual provision for depreciation should:

Cash flows must be presented separately in the Statement of Cash Flows for the three classes (unrestricted,temporarily restricted,and permanently restricted).

FASB Statement 124,Accounting for Certain Investments of Not-for-Profit Organizations,requires investments by a not-for-profit in debt securities and equity securities to be carried at fair value.

An intention to give (such as being named in a will)is the same as an unconditional promise to give and can be recorded as revenue when the intention is made known.

Which of the following is not a characteristic that distinguishes a private not-for-profit organization from a business?

Accounting practices of private sector not-for-profit organizations are influenced by two AICPA audit and accounting guides: Not-for-Profit Organizations and Health Care Organizations.

What financial ratio is most commonly used to evaluate charitable organizations?

Private not-for-profits use the modified accrual basis and do not record fixed assets or long-term debt.

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Proprietary Funds

Fiduciary Funds, Inter-fund Transactions

Government-Wide Statements: Capital Assets; Long-Term Debt

Accounting for Special-Purpose Entities Including Public Colleges and Universities

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Auditing, Tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters