Question 1

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.).

Accepted Answer

A) True 
 B)False

Question 2

In which of the following categories may Investment Income be reported by Not-for-Profit organizations: I Unrestricted net asset II Temporarily restricted net asset III Permanently restricted net asset

Accepted Answer

A)  Only I. 
B)  Only I & II. 
C)  Only 1 & III. 
D)  I, II & III.

Question 3

The following treatment is correct with regards to payments that are partially exchange transactions and partially contributions:

Accepted Answer

A)  Reported only as a exchange transaction 
B)  Reported only as a contributions 
C)  Reported as either an exchange transaction or contribution, depending on management's judgment 
D)  The two parts should be separately accounted for

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Unconditional promises to give are recognized when the promise is made net of estimated uncollectible receivables.

Accepted Answer

A) True 
 B)False

Question 6

In 2009, a major drug company agreed to give a not-for-profit private college $200,000 to perform testing of a new drug. An advance payment of $150,000 was received in 2009. The college was to receive $1,000 per individual test. In 2009, the college completed 100 tests. How much revenue should the college report for 2009?

Accepted Answer

A)  $ 0 
B)  $ 100,000 
C)  $ 150,000 
D)  $ 200,000

Question 7

FASB statement 124 requires that investments in equity securities with readily determinable values be reported at fair market value.

Accepted Answer

A) True 
 B)False

Question 8

When might it be appropriate for a not-for-profit organization to report a surplus (increase in net assets)?

Accepted Answer

The answer of When might it be appropriate for a...

Question 9

Which of the following is NOT a characteristic that distinguishes a not-for-profit organization from a business?

Accepted Answer

A)  Contributions from resource providers who expect nothing in return 
B)  Financial statements intended primarily for use by creditors 
C)  Operating purposes other than to provide goods or services at a profit 
D)  Absence of ownership interests

Question 10

Which organization has standard setting authority over state and local governments, including governmentally related not-for-profit organizations such as hospitals colleges and universities

Accepted Answer

A)  GASB 
B)  FASB 
C)  AICPA 
D)  SEC

Question 11

Not-for-profit organizations should have little to no profit.

Accepted Answer

A) True 
 B)False

Question 12

Donated fixed assets that have not yet been depreciated may be recorded as either unrestricted or temporarily restricted.

Accepted Answer

A) True 
 B)False

Question 13

Lisa informed her church that she had named the church in her will and later provided a written copy of the will to the church. At what point should the church record the contribution?

Accepted Answer

A)  At the time when the church was informed of her will 
B)  At the time the church receives a written copy of the will 
C)  At Lisa's death 
D)  At the date the probate court declares the will valid following her death

Question 14

A Statement of Functional Expenses is required for Voluntary health and welfare organizations.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

A Statement of Functional Expenses is required for voluntary health and welfare organizations.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not an example of a donor imposed restriction?

Accepted Answer

A)  Funds are not to be used until the following year 
B)  Funds must be used on certain programs 
C)  Funds are to be endowed 
D)  All of the above are examples of donor imposed restrictions

Question 18

The three classes of net assets reported for a private not-for-profit organization include all of the following except:

Accepted Answer

A)  Unrestricted net assets 
B)  Temporarily restricted net assets 
C)  Capital restricted net assets 
D)  Permanently restricted net assets

Question 19

In 2010, 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?

Accepted Answer

A)  When Susan dies and the will is declared valid 
B)  Ratably over a five year period beginning in 2011 
C)  All in 2010 
D)  When the Museum receives the contribution

Question 20

Who is the standard setting body for private not-for-profit organizations and what type of accounting method do they use?

Accepted Answer

A)  GASB & Accrual 
B)  GASB & Modified Accrual 
C)  FASB & Accrual 
D)  FASB & Modified Accrual

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

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.).

In which of the following categories may Investment Income be reported by Not-for-Profit organizations: I Unrestricted net asset II Temporarily restricted net asset III Permanently restricted net asset

The following treatment is correct with regards to payments that are partially exchange transactions and partially contributions:

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

Unconditional promises to give are recognized when the promise is made net of estimated uncollectible receivables.

FASB statement 124 requires that investments in equity securities with readily determinable values be reported at fair market value.

When might it be appropriate for a not-for-profit organization to report a surplus (increase in net assets)?

Which of the following is NOT a characteristic that distinguishes a not-for-profit organization from a business?

Which organization has standard setting authority over state and local governments, including governmentally related not-for-profit organizations such as hospitals colleges and universities

Not-for-profit organizations should have little to no profit.

Donated fixed assets that have not yet been depreciated may be recorded as either unrestricted or temporarily restricted.

Lisa informed her church that she had named the church in her will and later provided a written copy of the will to the church. At what point should the church record the contribution?

A Statement of Functional Expenses is required for Voluntary health and welfare organizations.

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

A Statement of Functional Expenses is required for voluntary health and welfare organizations.

Which of the following is not an example of a donor imposed restriction?

The three classes of net assets reported for a private not-for-profit organization include all of the following except:

In 2010, 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?

Who is the standard setting body for private not-for-profit organizations and what type of accounting method do they use?