Exam 12: Accounting for Not-For-Profit Organizations

For not-for-profit entities,external financial reporting focuses on:

A not-for-profit entity conducts a special fund-raising campaign at the end of fiscal year 2012,intended to raise funds for general operations that take place during fiscal year 2013.It receives pledges totaling $200,000.Based on past experience,the entity expects to receive $150,000 in cash.How should the entity report these events?

Under which of the following circumstances would a not-for-profit organization's net assets be classified as temporarily restricted?

A not-for-profit organization receives a pledge from a donor in fiscal 2013.The terms of the pledge are such that the organization will receive a large contribution in fiscal 2015.At what value should the pledge be reported in the organization's 2013 statement of financial position?

The Bob Buckham Senior Center,a not-for-profit entity,serves a hot meal to senior citizens every Friday evening.All the food is donated by a local supermarket.All the food preparation and serving is done by local volunteers.If the Center had to pay for the food,it would need to spend $10,000 a year.If it had to pay for the food preparation and service,it would need to spend $12,000 a year.How should it report these contributions in its financial statements? Food $\quad$ Food preparation and service a. $\quad$$\quad$ Disclose in the notes Disclose in the notes b. $\quad$$\quad$ Disclose in the notesReport $\$ 12,000$ revenue and expense c. $\quad$$\quad$ Report $\$ 10,000$ rev enue and expenseDisclose in the notes d. $\quad$$\quad$ Report $\$ 10,000$ rev enue and expenseReport $\$ 12,000$ rev enue and expense

In which classification of net assets are expenses reported?

Which of the following is true regarding the Financial Accounting Standards Board requirements for a not-for-profit entity's accounting and financial reporting?

The Turtle Island Singers receive three gifts during the year 2012: (a)$3,000,which may be used for any purpose at any time; (b)$5,000,which must be used for a special concert in a nursing home;and (c)$1,000,which may be used for any purpose,but only in the year 2013.When it receives the gifts,how should the entity classify them:

Which of the following characteristics of a brochure prepared by an NFPO is not relevant to whether the cost of the brochure can be allocated between program and fund-raising functions?

A not-for-profit university uses fund accounting.It maintains a Loan Fund to account for its extensive program of financial assistance to students.The Loan Funds are derived from many sources,including both donations and amounts set aside by the university's governing board.When it prepares its statement of financial position,how should the university classify the net assets of the Loan Fund?

Say No To Meth,a not-for-profit entity devoted to informing the public about the hazards of methamphetamine,sends out brochures to a large number of doctors,urging that the brochures be placed in the doctors' waiting rooms.The four-page brochure contains a description of the addictive and destructive nature of the drug,but half of the last page contains an appeal for funds,in relatively large type.How should the entity report the $30,000 expense of preparing,printing,and mailing the brochure in its statement of activities?

A group of citizens donate their time to construct a building to provide shelter for the homeless,to be run by a not-for-profit entity.In this situation,what is the applicable accounting rule for recognizing the fair value of the services on the face of the financial statements?

When a not-for-profit entity's funds are classified as restricted,who has imposed the restrictions?

In response to a fund-raising campaign,an electric utility provides free electricity to a not-for-profit entity.How should the not-for-profit entity report this gift in its statement of activities?

The FASB requires not-for-profits to report net assets and resource inflows and outflows in which categories?

Socialite Lisa King establishes a $4 million irrevocable charitable remainder trust providing a beneficial interest to the Clinton Metropolitan Opera.A percentage of the fair value of the trust's assets go to her husband during his lifetime.The Opera will receive the remaining assets at her husband's death.Mrs.King also specifies that the only the revenue from investing the assets may be used to support the Opera's programs.The Opera estimates that the present value of the estimated future benefits it will receive from the trust is $1.5 million.How should the Opera report this arrangement when it learns of the trust?

Ruth Richter gives a not-for-profit entity $25,000 in cash.She tells the entity that it may use the gift for particular research project but only after it receives at least $20,000 cash from other donors to help complete the project.If the entity fails to raise the additional $20,000,it must return Ruth's gift.What account should the entity credit when it receives Ruth's gift?

A not-for-profit entity that conducts numerous programs receives investments as a donation.The donor,in a letter accompanying the donation,states that the principal of the donation must be maintained intact permanently,and that the income from the investment must be used to finance research in kidney disease.If the entity receives income of $8,000 from these investments,how should be income be reported?

A not-for-profit entity receives equipment having a fair value of $50,000 as a gift.How should the gift be reported in the entity's financial statements?

A not-for-profit university uses fund accounting.The university's governing board decides to set aside $500,000 in a separate fund called the Student Performance Quasi-Endowment Fund,the income of which will be used to finance a long-term study on the career paths of the university's graduates.In which net asset classification of the university's statement of financial position should this fund be reported?