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

A donor made a gift of cash to a private not-for-profit organization in 2015 with an expressed purpose restriction. All the funds were expended in 2015. The organization must:

Which of the following is not a condition for recording donated services?

Which of the following is not correct with respect to acquisitions under the rules established by FASB Statement No.164,Not-for-Profit Entities: Mergers and Acquisitions?

Which organization has standard setting authority over governmentally related not-for-profit organizations,such as hospitals colleges and universities?

All donated services are recognized as revenue.

FASB statement 116 requires conditional promises to give to be recorded as revenue when the condition is met.

Donated services should be considered revenue if the service creates or enhances a nonfinancial asset and requires a specialized skill which would have had to be purchased if not donated.

Identify three types of restrictions placed on temporarily restricted net assets and outline the accounting requirements for each type.

The AICPA Not-for-Profit Guide applies only to nongovernmental not-for-profit organizations.

In which of the following categories may Investment Income be reported by Not-for-Profit organizations: I. Unrestricted net asset II. Temporarily restricted net asset III.Permanently restricted net asset

With the exception of collections,fixed assets may be recorded by a private not-for-profit as:

Private not-for-profits use record encumbrances to maintain budgetary control.

Which of the following is true regarding the Statement of Financial Position for nongovernmental,not-for-profit organizations?

Henry Highbrow promises to donate $25,000 to his church toward the purchase of a new piano if the church is able to raise matching funds of $25,000 from other contributors. At what point should the church record revenue?

A donor made a cash contribution of $90,000 to a private not-for-profit organization for the purpose of acquiring a building. The not-for-profit organization properly recorded the gift of cash as temporarily restricted revenue. When the building is acquired,the organization should:

A membership pass to the YMCA (a private not-for-profit organization)includes unlimited rights to all facilities and a health magazine subscription. Non-members do not possess these rights. How must the YMCA account for membership dues?

Assume that The Sandy Creek Nature Center,a private not-for-profit organization,started the fiscal year ending December 31,2015 with $59,380 in temporarily restricted net assets. The amounts are restricted for the following: •restricted for educational programs relating to preservation of wetlands $16,000. •restricted for future equipment purchases $18,000 (Fixed assets are recorded as unrestricted when acquired)and •a promise to provide $5,000 each of the next six years for general support.Assume the pledge was made on December 31,2014 and the present value of six (January 1)payments discounted at 5 percent is $25,378. During the fiscal year ended December 31,2015,the following transactions occur: (a)The first $5,000 installment on the pledge receivable was received. (b)Expenses related to educational programs on conservation of wetlands were incurred and paid in the amount of $19,900 (c)The $18,000 received in a prior year for equipment,together with an additional $25,500 was used to acquire equipment. (d)Interest of 5% is recorded on the remaining balance of the pledge receivable. Required: Prepare the journal entries necessary for the above transactions:

Distinguish between an exchange transaction and a contribution. How is the accounting different for these two events?

Contributions to be paid in future periods should be recorded at present value.

FASB requires multiyear pledges to be recorded at the present value of the future collections.