Exam 18: Accounting for Not-For-Profit Organizations

Which statement below is not correct?

A gift to a not-for-profit school that is not restricted by the donor is credited to:

Which account would be credited in recording a gift of medicine to a nursing home from an outside party?

For a not-for-profit organization, when is recognition of contributions of artworks and historical treasures not required?

How does a voluntary health and welfare organization account for donated goods and cash contributed for operating purposes? What types of revenues are recognized by voluntary health and welfare organizations?

How are investments in equity securities with readily determinable market values and their related unrealized gains and losses reported by a not-for-profit organization?

For the month of December 2011, patient charges at Northfield Hospital (a not-for-profit hospital) were $2,720,000. Third-party payors were billed $1,800,000. The hospital estimated that contractual adjustments would reduce the amount collected from third-party payors to $1,710,000. Required: Prepare the necessary journal entry to record the contractual adjustments.

Dura Foundation, a voluntary health and welfare organization dedicated to finding medical cures and supported by contributions from the general public, included the following costs in its Statement of Functional Expenses for the year ended December 31, 2011: What should Dura Foundation report as program service expenses?

For the month of December 2011, patient charges at Northfield Hospital (a not-for-profit hospital) were $2,720,000. Third-party payors were billed $1,800,000. In this month, there were several patients that had no health insurance and due to their low income level, the hospital decided that $85,000 of receivables would not be collectible. Required: Prepare the necessary journal entry to reflect the decision to consider the $85,000 as charity care.

What are the objectives of accounting for a not-for-profit organization?

For a voluntary health and welfare organization, what are supporting services expenses?

Which of the following is not true about a merger of two not-for-profit organizations?

On a statement of functional expenses for a voluntary health and welfare organization, how are expenses classified?

Which of the following is not a question individuals ask of not-for-profit organizations in considering whether to make a contribution?

The Yelton Center is a voluntary health and welfare organization. During 2010, unrestricted pledges of $780,000 were received by the center, sixty percent of which were payable in 2010, with the remainder payable in 2011 (for use in 2011). Officials estimated that fifteen percent of these pledges will be uncollectible. Required: How much should the Yelton Center report as revenue for 2010?

Which entry would be the correct entry to record that a not-for-profit organization collected $80,000 of the amounts pledged and wrote off $3,000 of the amounts pledged as amounts uncollectible?

Wakefield Home is a private not-for-profit healthcare organization offering services for a fee. In the first quarter of 2011, Wakefield Home rendered services of $300,000 to patients. Of this amount 75% will be paid by patients, and $25,000 will be adjusted based on estimated insurance agreements. The remaining amount is to be paid by third party insurance providers. A local business donated medical supplies to Wakefield with a value of $40,000. Prepare the journal entry for the receipt of these supplies.

Which entry would be the correct entry on the not-for-profit organization's books to record a donor's gift when the money is simply passing through the not-for-profit organization and creates no direct benefit, and when control of the assets has been relinquished by the donor?

Wakefield Home is a private not-for-profit healthcare organization offering services for a fee. In the first quarter of 2011, Wakefield Home rendered services of $300,000 to patients. Of this amount 75% will be paid by patients, and $25,000 will be adjusted based on estimated insurance agreements. The remaining amount is to be paid by third party insurance providers. The Home incurred the following liabilities: $110,000 salaries, $30,000 medical equipment, $10,000 utilities expense. Prepare the journal entries for these transactions.

What criteria must be met before a voluntary health and welfare organization can recognize donated services as a means of support?