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

The FASB requires private not-for-profit organizations to report revenues separated by unrestricted,temporarily restricted and permanently restricted.

An unconditional pledge of support is properly recorded as Temporarily Restricted Revenue at the time of the pledge. Changes in the present value of the receivable resulting from the passage of time is reported as:

Present and potential donors are the primary users of private not-for-profit financial statements.

A private not-for-profit organization received a gift of $640,000 with purpose restrictions in 2014. In 2015 funds were expended for the purpose outlined in the gift,however,it was not possible to determine whether the restricted funds or unrestricted funds were used. The presumption should be:

Uptown Church received a donation of marketable equity securities from a church member.In reviewing the financial press,it is determined that the securities had appreciated during the year.At what amount should Uptown report its marketable equity securities in the year-end balance sheet?

Private not-for-profit organizations record depreciation expense.

The Statement of Functional expenses presents a matrix of expenses classified by function (various programs,fund-raising,etc.)and by object or natural classification (salaries,supplies,travel,etc.).

Expenditures,encumbrances,and budgetary accounts are used by private not-for-profit organizations.

Assume Towne Center Art Museum received the following contributions in 2015. Prepare journal entries to record these events and any year-end adjusting journal entries resulting from the events. (a)Unrestricted pledges of support were received in the amount of $280,000. All of these are due within the year and it is estimated that 6% will ultimately prove to be uncollectible. (b)600 Memberships were sold to the public in the amount of $40 each. Membership provides the individual with a monthly magazine and other benefits. The estimated fair value of member benefits is $15. The member year runs from July 1 to June 30. (c)A local carpenter donated supplies and labor with values of $25,000 and $20,000 (respectively)to construct a new exhibition area. Fixed assets are classified as unrestricted net assets. (d)On March 1,2015 a local businessman made a pledge payable in a future period. The pledge is restricted in purpose and has a present value of $105,000 (effective interest rate of 6%).

The Statement of Cash Flows for a private not-for-profit organization has three different classifications of cash flows.

Donors to private not-for-profit entities are primarily concerned with which of the following performance measures?

If a person names a private not-for-profit organization in his or her will,this is considered a(n)________ and is __________.

Supporting activities as classified in the Statement of Activities,normally include

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

Which of the following pledges of support would not be recognized in the year the pledge was made?

The entry to record the expiration of program restrictions includes which of the following?

Country clubs and labor unions are not included in the category "other not-for-profit" organizations because they provide benefit to their members only and not to the general public.

In 2015,Susan tells The Art Museum,a private not-for-profit organization,that she has named the museum in her will.When should the organization recognize the contribution revenue?

If a private not-for-profit fails to comply with donor restriction on contributions received,the organization must accrue and disclose a contingent liability.

A private not-for-profit's expenses are reported by function,program or supporting,in the Statement of Activities or in the notes.