Question 1

Which of the following statements is false with respect to private not-for-profit organizations?

Accepted Answer

A)  Exchange transactions should be recorded on the accrual basis of accounting where the revenues are recognized when earned. 
B)  An intention to give should be recorded as revenue when the intention is communicated to the not-for-profit. 
C)  In certain situations, contributed services should be recognized as revenue. 
D)  FASB statement 124 requires that investments in equity securities with readily determinable values be reported at fair market value. 
A)  Exchange transactions should be recorded on the accrual basis of accounting where the revenues are recognized when earned. 
B)  An intention to give should be recorded as revenue when the intention is communicated to the not-for-profit. 
C)  In certain situations, contributed services should be recognized as revenue. 
D)  FASB statement 124 requires that investments in equity securities with readily determinable values be reported at fair market value.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A)  If the combination qualifies as a merger, it will be accounted for using the carryover method. 
B)  Goodwill is recognized on long term assets only 
C)  Assets and liabilities are transferred from both existing entities to the new entity at book value. 
D)  The entity resulting from the merger is a new reporting entity, with no activity before the date of the merger. 
A)  If the combination qualifies as a merger, it will be accounted for using the carryover method. 
B)  Goodwill is recognized on long term assets only 
C)  Assets and liabilities are transferred from both existing entities to the new entity at book value. 
D)  The entity resulting from the merger is a new reporting entity, with no activity before the date of the merger.

Question 4

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 5

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

Question 6

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

Accepted Answer

It is sometimes difficult to determine w

Question 7

If a person discloses to a private not-for-profit organization that it will be a beneficiary in his or her will, this is considered an ________ and is __________.

Accepted Answer

A)  Conditional promise to give; not recorded. 
B)  Unconditional promise to give; recorded. 
C)  Intention to give; recorded. 
D)  Intention to give; not recorded. 
A)  Conditional promise to give; not recorded. 
B)  Unconditional promise to give; recorded. 
C)  Intention to give; recorded. 
D)  Intention to give; not recorded.

Question 8

The GASB has the authority to establish accounting and financial reporting standards for both government-owned and private not-for-profit organizations.

Accepted Answer

A) True 
 B)False

Question 9

A private not-for-profit organization received a gift of $640,000 with purpose restrictions in 2014. In 2017 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:

Accepted Answer

A)  The restricted funds would have been used first. 
B)  The unrestricted funds would have been used first. 
C)  The restricted funds and unrestricted funds would have been used equally. 
D)  The restricted funds and unrestricted funds would have been used, based on a weighted average of the amounts. 
A)  The restricted funds would have been used first. 
B)  The unrestricted funds would have been used first. 
C)  The restricted funds and unrestricted funds would have been used equally. 
D)  The restricted funds and unrestricted funds would have been used, based on a weighted average of the amounts.

Question 10

Which of the following organizations would not be subject to the accounting and reporting requirements of FASB Statements 116 Accounting for Contributions and 117 Financial Reporting for Not-for-Profit Organizations?

Accepted Answer

A)  The City of Hannibal, Missouri. 
B)  St. Jude Children's Hospital. 
C)  Live Arts Theater. 
D)  Girl Scouts. 
A)  The City of Hannibal, Missouri. 
B)  St. Jude Children's Hospital. 
C)  Live Arts Theater. 
D)  Girl Scouts.

Question 11

A Statement of Functional Expenses is required for government-owned hospitals.

Accepted Answer

A) True 
 B)False

Question 12

The program expense ratio is a measure of the efficiency of a not-for-profit in utilizing resources to fulfill its mission, rather than for fund-raising and administration.

Accepted Answer

A) True 
 B)False

Question 13

What is the treatment of multi-year pledges as required by FASB Statement No. 116?

Accepted Answer

The donation is recorded as a receivable

Question 14

Which of the following is not true of a Statement of Activities prepared for a private not-for-profit organization?

Accepted Answer

A)  Expenses are shown only as decreases in unrestricted net assets. 
B)  Reclassifications for expiration of time restrictions are shown in the revenues and support section. 
C)  Unrealized gains losses) on investments are shown only as increases decreases) in unrestricted net assets. 
D)  Expenses are classified by function within the categories of Program Services and Supporting Services either in the Statement or the notes. 
A)  Expenses are shown only as decreases in unrestricted net assets. 
B)  Reclassifications for expiration of time restrictions are shown in the revenues and support section. 
C)  Unrealized gains losses) on investments are shown only as increases decreases) in unrestricted net assets. 
D)  Expenses are classified by function within the categories of Program Services and Supporting Services either in the Statement or the notes.

Question 15

A not-for-profit organization receiving donated fixed assets must record those assets as temporarily restricted.

Accepted Answer

A) True 
 B)False

Question 16

According to FASB standards, how are not-for-profit organizations distinguished from a business?

Accepted Answer

An organization that possess the followi

Question 17

Assets that are restricted by an organization's board can be reported as either temporarily restricted or permanently restricted, according to the board's intentions.

Accepted Answer

A) True 
 B)False

Question 18

A donor made an unconditional pledge in 2016 of $ 50,000 to a private not-for-profit organization with the intent to pay the cash in 2017 for unrestricted use in 2017. The organization should:

Accepted Answer

A)  Record the pledge receivable and deferred revenue in 2016. 
B)  Record the pledge as temporarily restricted revenue in 2016 and reclassify it to unrestricted in 2017. 
C)  Record the pledge as unrestricted revenue in 2016. 
D)  Record the pledge as temporarily restricted revenue in 2016 and reclassify it to unrestricted in 2017, but only in an amount equivalent to the amount that is spent in 2017. 
A)  Record the pledge receivable and deferred revenue in 2016. 
B)  Record the pledge as temporarily restricted revenue in 2016 and reclassify it to unrestricted in 2017. 
C)  Record the pledge as unrestricted revenue in 2016. 
D)  Record the pledge as temporarily restricted revenue in 2016 and reclassify it to unrestricted in 2017, but only in an amount equivalent to the amount that is spent in 2017.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A)  Temporarily restricted 
B)  Unrestricted 
C)  Permanently restricted 
D)  Either A or B. 
A)  Temporarily restricted 
B)  Unrestricted 
C)  Permanently restricted 
D)  Either A or B.

Which of the following statements is false with respect to private not-for-profit organizations?

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

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

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

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

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

If a person discloses to a private not-for-profit organization that it will be a beneficiary in his or her will, this is considered an and is __.

The GASB has the authority to establish accounting and financial reporting standards for both government-owned and private not-for-profit organizations.

A private not-for-profit organization received a gift of $640,000 with purpose restrictions in 2014. In 2017 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:

Which of the following organizations would not be subject to the accounting and reporting requirements of FASB Statements 116 Accounting for Contributions and 117 Financial Reporting for Not-for-Profit Organizations?

A Statement of Functional Expenses is required for government-owned hospitals.

The program expense ratio is a measure of the efficiency of a not-for-profit in utilizing resources to fulfill its mission, rather than for fund-raising and administration.

What is the treatment of multi-year pledges as required by FASB Statement No. 116?

Which of the following is not true of a Statement of Activities prepared for a private not-for-profit organization?

A not-for-profit organization receiving donated fixed assets must record those assets as temporarily restricted.

According to FASB standards, how are not-for-profit organizations distinguished from a business?

Assets that are restricted by an organization's board can be reported as either temporarily restricted or permanently restricted, according to the board's intentions.

A donor made an unconditional pledge in 2016 of $ 50,000 to a private not-for-profit organization with the intent to pay the cash in 2017 for unrestricted use in 2017. The organization should:

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

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

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, Interfund Transactions

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

Advanced Topics for State and Local Governments

College and University Accounting

Accounting for Hospitals and Other Health Care Providers

Auditing, Tax-exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters

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

Which of the following statements is false with respect to private not-for-profit organizations?

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

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

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

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

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

If a person discloses to a private not-for-profit organization that it will be a beneficiary in his or her will, this is considered an ________ and is __________.

The GASB has the authority to establish accounting and financial reporting standards for both government-owned and private not-for-profit organizations.

A private not-for-profit organization received a gift of $640,000 with purpose restrictions in 2014. In 2017 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:

Which of the following organizations would not be subject to the accounting and reporting requirements of FASB Statements 116 Accounting for Contributions and 117 Financial Reporting for Not-for-Profit Organizations?

A Statement of Functional Expenses is required for government-owned hospitals.

The program expense ratio is a measure of the efficiency of a not-for-profit in utilizing resources to fulfill its mission, rather than for fund-raising and administration.

What is the treatment of multi-year pledges as required by FASB Statement No. 116?

Which of the following is not true of a Statement of Activities prepared for a private not-for-profit organization?

A not-for-profit organization receiving donated fixed assets must record those assets as temporarily restricted.

According to FASB standards, how are not-for-profit organizations distinguished from a business?

Assets that are restricted by an organization's board can be reported as either temporarily restricted or permanently restricted, according to the board's intentions.

A donor made an unconditional pledge in 2016 of $ 50,000 to a private not-for-profit organization with the intent to pay the cash in 2017 for unrestricted use in 2017. The organization should:

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

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

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, Interfund Transactions

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

Advanced Topics for State and Local Governments

College and University Accounting

Accounting for Hospitals and Other Health Care Providers

Auditing, Tax-exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters

If a person discloses to a private not-for-profit organization that it will be a beneficiary in his or her will, this is considered an and is __.