Question 1

While many private not-for-profit organizations use funds for internal purposes,the financial statements do not report separate funds.

Accepted Answer

A) True 
 B)False

Question 2

The primary users of the financial statements of private not-for-profit organizations are:

Accepted Answer

A)  Owners of the organization. 
B)  Present and potential donors. 
C)  Investors. 
D)  Government agencies.

Question 3

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 4

The institution's governing board decided to create an endowment from contributed funds,this is called a(n)________ and the funds are unrestricted.

Accepted Answer

A)  Endowment. 
B)  Term endowment. 
C)  Quasi-endowment. 
D)  None of the above.

Question 5

FASB statement 116 requires contributions to be recorded as revenue when the contribution is likely to be received.

Accepted Answer

A) True 
 B)False

Question 6

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 is the same as an unconditional promise to give and thus should be recorded as revenue in the same manner. 
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 7

Which of the following is not an example of a voluntary health and welfare organization?

Accepted Answer

A)  Meals on Wheels. 
B)  Big Brothers/Big Sisters. 
C)  Performing arts organizations. 
D)  Girl and Boy Scouts.

Question 8

With respect to the Statement of Cash Flows for a private not-for-profit organization,donor restricted cash that must be used for long term purposes is classified as cash flows from financing activities.

Accepted Answer

A) True 
 B)False

Question 9

The AICPA Not-for-Profit Guide applies to both governmental and nongovernmental not-for-profit organizations.

Accepted Answer

A) True 
 B)False

Question 10

If fixed assets are recorded as temporarily restricted assets,then a reclassification is made each accounting period to unrestricted resources in the amount equal to the depreciation or an allocation based on the time the asset is restricted,whichever is shorter.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true regarding the Statement of Financial Position for nongovernmental,not-for-profit organizations?

Accepted Answer

A)  The Statement must display assets and liabilities separated between the categories of unrestricted, temporarily restricted, and permanently restricted. 
B)  The Statement must display totals for net assets separated between the categories of unrestricted, temporarily restricted, and permanently restricted. 
C)  Both of the above. 
D)  Neither of the above.

Question 12

FASB Statement 124,Accounting for Certain Investments of Not-for-Profit Organizations:

Accepted Answer

A)  Requires that investments in equity securities be carried at fair value. 
B)  Requires that investments in debt securities be carried at book value. 
C)  Requires that investments accounted for under the equity method be adjusted to fair value at the end of the accounting period. 
D)  Requires that investments in consolidated subsidiaries be carried at book value.

Question 13

Reclassifications from permanently restricted net assets to temporarily restricted net assets would occur only under which of the following circumstances?

Accepted Answer

A)  Time restrictions placed on the permanently restricted net assets have been met. 
B)  Purpose restriction placed on the permanently restricted net assets have been met. 
C)  Either of the above criteria have been met. 
D)  Permanently restricted net assets would not be reclassified to temporarily restricted net assets.

Question 14

Under FASB standards,donated services are:

Accepted Answer

A)  Recorded whenever a service is provided. 
B)  Recorded if the service requires a specialized skill and the donor possesses those skills. 
C)  Recorded if the service would have been paid for if not donated. 
D)  Recorded if (b) and (c) have been met.

Question 15

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 16

Identify the standard setting body for private not-for-profit organizations and the basis of accounting that should be used.

Accepted Answer

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

Question 17

Which of the following is not a reason for a private not-for-profit to generate a surplus?

Accepted Answer

A)  Retiring debt. 
B)  Establishing working capital. 
C)  Expanding facilities. 
D)  All of the above are legitimate reasons.

Question 18

FASB Statement 136 Transfer of Assets to a Not-for-Profit Organization or Charitable Trust that Raises or Holds Contributions for Others provides guidance on how intermediary recipient organizations should record receipt of resources held for others.Briefly describe the issue and how such transfers should be recorded.

Accepted Answer

The answer of FASB Statement 136 Transfer of Assets to...

Question 19

Care Foundation is a voluntary health and welfare organization funded by contributions from the general public.In its Statement of Activities,depreciation expense should:

Accepted Answer

A)  Not be included. 
B)  Be included as an element of support. 
C)  Be included as an element of changes in fund balances. 
D)  Be included as an element of expense.

Question 20

Country clubs and labor unions are not included in the category "other not-for-profit" organizations because they provide benefit to their members only and not to the general public.

Accepted Answer

A) True 
 B)False

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

While many private not-for-profit organizations use funds for internal purposes,the financial statements do not report separate funds.

The primary users of the financial statements of private not-for-profit organizations are:

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

The institution's governing board decided to create an endowment from contributed funds,this is called a(n) ________ and the funds are unrestricted.

FASB statement 116 requires contributions to be recorded as revenue when the contribution is likely to be received.

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

Which of the following is not an example of a voluntary health and welfare organization?

With respect to the Statement of Cash Flows for a private not-for-profit organization,donor restricted cash that must be used for long term purposes is classified as cash flows from financing activities.

The AICPA Not-for-Profit Guide applies to both governmental and nongovernmental not-for-profit organizations.

If fixed assets are recorded as temporarily restricted assets,then a reclassification is made each accounting period to unrestricted resources in the amount equal to the depreciation or an allocation based on the time the asset is restricted,whichever is shorter.

Which of the following is true regarding the Statement of Financial Position for nongovernmental,not-for-profit organizations?

FASB Statement 124,Accounting for Certain Investments of Not-for-Profit Organizations:

Reclassifications from permanently restricted net assets to temporarily restricted net assets would occur only under which of the following circumstances?

Under FASB standards,donated services are:

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

Identify the standard setting body for private not-for-profit organizations and the basis of accounting that should be used.

Which of the following is not a reason for a private not-for-profit to generate a surplus?

Care Foundation is a voluntary health and welfare organization funded by contributions from the general public.In its Statement of Activities,depreciation expense should:

Country clubs and labor unions are not included in the category "other not-for-profit" organizations because they provide benefit to their members only and not to the general public.