Question 1

Historically, what pattern of reporting was used by private not-for-profit entities?The same as used with respect to for-profit entities.Reporting that utilizes a fund accounting approach.A pattern of reporting that does not consider the entire entity.

Accepted Answer

A)  1 only. 
B)  2 only. 
C)  1 and 2 only. 
D)  1, 2 and 3. 
E)  2 and 3 only.

Question 2

Which of the following is not a benefit of Internal Revenue Code Section 501(c)(3) status?

Accepted Answer

A)  Exemption from paying federal taxes on most income. 
B)  Likely exemption from paying state taxes on most income. 
C)  Charitable donations to 501(c)(3) entities can reduce the donor's taxable income. 
D)  Can engage in political election campaign activity. 
E)  Can participate in lobbying.
ESSAY. Write your answer in the space provided or on a separate sheet of paper.
42) Give several examples, by name, of specific not-for-profit entities that are voluntary health and welfare entities.

Question 3

Unconditional promises to transfer cash or other resources to an entity in a voluntary nonreciprocal transaction is the GAAP definition of:

Accepted Answer

A)  Miscellaneous revenues. 
B)  Contributions. 
C)  Unconditional promises to give. 
D)  Exchange transactions. 
E)  Pledges.

Question 4

Assume that the donor retains the right to revoke or redirect the gift.Prepare the journal entries for Charity A and Charity B. The entries should be for the gift when received by Charity A, and when the gift is distributed for Charity B.

Accepted Answer

The answer of Assume that the donor retains the right...

Question 5

Record the journal entries that reflect all of this information.

Accepted Answer

The answer of Record the journal entries that reflect all...

Question 6

For November 2021, Harleytown Hospital's charges for patient services were $716,000, of which 85% was billed to third-party payors.Required:Prepare the journal entry to accrue patient charges for the month.

Accepted Answer

The answer of For November 2021, Harleytown Hospital's charges for...

Question 7

The hospital estimated that contractual adjustments would reduce the amount collected from third-party payors to $1,790,000.Required:Prepare the necessary journal entry to record the contractual adjustments.

Accepted Answer

The answer of The hospital estimated that contractual adjustments would...

Question 8

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

Accepted Answer

A)  Option A. 
B)  Option B. 
C)  Option C. 
D)  Option D. 
E)  Option E.

Question 9

For not-for-profit entities, what is the difference in identification of "control" between a merger and an acquisition?

Accepted Answer

The answer of For not-for-profit entities, what is the difference...

Question 10

Assume there are no donor rights to revoke or redirect the gift.Prepare the journal entries for Charity A when the gift is received, and for Charity A and Charity B when the gift is distributed.

Accepted Answer

The answer of Assume there are no donor rights to...

Question 11

Prepare the necessary journal entry to record the revenue and receivables.

Accepted Answer

The answer of Prepare the necessary journal entry to record...

Question 12

Rainbow Childcare Agency is a private not-for-profit entity providing child care for a fee. The agency has a permanent endowment and the income may be used to sponsor families that are unable to pay for services but the principal must be preserved. In addition, various fundraising activities take place during the year.When the agency held its annual holiday fundraiser in 2020, pledges of $75,000 were received. The administration expected 6% of the pledges to be uncollectible.In addition, income of $12,500 was received from the permanent endowment to sponsor children to be placed with foster families.Prepare the journal entries for these transactions.

Accepted Answer

The answer of Rainbow Childcare Agency is a private not-for-profit...

Question 13

A not-for-profit entity receives a computer as a donation (valued at $3,000). Prepare the journal entry for the transaction.

Accepted Answer

The answer of A not-for-profit entity receives a computer as...

Question 14

A not-for-profit entity provides the following information for the year 2020:  Required:Prepare the journal entries for these transactions for the year 2020.

Accepted Answer

The answer of A not-for-profit entity provides the following information...

Exam 18: Accounting and Reporting for Private Not-For-Profit Organizations