Question 1

The following statement is true of private not-for-profits

Accepted Answer

A)  Financial statements are standardized across industries. 
B)  Different types of not-for-profit organizations follow very different accountings practices. 
C)  The AICPA is only the governing body for not-for-profits. 
D)  All of the above are false.

Question 2

Which of the following organizations would 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 International Brotherhood of Electrical Workers. 
B)  St. Jude Children's Hospital. 
C)  Both of the above. 
D)  Neither (a) or (b) above.

Question 3

Which of the following is not true regarding the treatment of multiyear pledges,according to FASB Statement 116?

Accepted Answer

A)  They are recorded at the present value of future collections. 
B)  They should be reported net of an allowance for estimated uncollectibles. 
C)  They should be recorded as temporarily restricted. 
D)  At the end of each accounting period, the difference between the new and previously recorded present value is recorded as interest revenue.

Question 4

Which of the following are the net asset classes required by the FASB for private not-for-profit organizations?

Accepted Answer

A)  Reserved and Unreserved. 
B)  Invested in Capital Assets, Net of Related Debt, Restricted, and Unrestricted. 
C)  Permanently Restricted, Temporarily Restricted, Unrestricted. 
D)  None of the above.

Question 5

The-GASB has standards-setting authority over state and local governments,including governmentally related not-for-profit organizations such as hospitals colleges and universities.Private not-for-profits must follow all applicable ____ standards in recording transactions.

Accepted Answer

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

Question 6

According to FASB Statement 124,Accounting for Certain Investments of Not-for-Profit Organizations,requires investments in equity but not debt securities by a not-for-profit to be carried at fair value.

Accepted Answer

A) True 
 B)False

Question 7

A donor made a cash contribution of $90,000 to a private not-for-profit organization for the purpose of acquiring a building.The not-for-profit organization properly recorded the gift of cash as temporarily restricted revenue.When the building is acquired,the organization should:

Accepted Answer

A)  Record the building as permanently restricted. 
B)  Record the building as temporarily restricted. 
C)  Record the plant as either unrestricted or temporarily restricted, as long as a consistent policy is followed. 
D)  Show an expense equivalent to the amount paid for the building in unrestricted net assets and reclassify the same amount from temporarily restricted to unrestricted net assets.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

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, set aside by the donor as funds not to be expended. 
C)  Both of the above. 
D)  Neither of the above.

Question 10

What financial ratio is most commonly used to evaluate charitable organizations?

Accepted Answer

A)  Current assets / current liabilities. 
B)  Increase in net assets / total assets. 
C)  Total expenses / total revenues. 
D)  Program expenses / total expenses.

Question 11

Supporting activities as classified in the Statement of Activities,normally include

Accepted Answer

A)  Management and general. 
B)  Fund-raising. 
C)  Membership development. 
D)  All of the above.

Question 12

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 13

If a private not-for-profit fails to comply with donor restriction on contributions received,the organization must accrue and disclose a contingent liability following FASB Statement No.5.

Accepted Answer

A) True 
 B)False

Question 14

A membership pass to the YMCA (a private not-for-profit organization)includes unlimited rights to all facilities and a health magazine subscription.Non-members do not possess these rights.How must the YMCA account for membership dues?

Accepted Answer

A)  The dues are a non-exchange transaction, so it should report all dues in the year received. 
B)  The dues are a non-exchange transaction, so it should report dues on a pro-rata basis determined by the length of the individual memberships. 
C)  The dues are an exchange transaction, so it should report all dues in the year received. 
D)  The dues are an exchange transaction, so it should report dues on a pro-rata basis determined by the length of the individual memberships.

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

The following statement is true of private not-for-profits

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

Which of the following is not true regarding the treatment of multiyear pledges,according to FASB Statement 116?

Which of the following are the net asset classes required by the FASB for private not-for-profit organizations?

The-GASB has standards-setting authority over state and local governments,including governmentally related not-for-profit organizations such as hospitals colleges and universities.Private not-for-profits must follow all applicable ____ standards in recording transactions.

According to FASB Statement 124,Accounting for Certain Investments of Not-for-Profit Organizations,requires investments in equity but not debt securities by a not-for-profit to be carried at fair value.

A donor made a cash contribution of $90,000 to a private not-for-profit organization for the purpose of acquiring a building.The not-for-profit organization properly recorded the gift of cash as temporarily restricted revenue.When the building is acquired,the organization should:

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

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

What financial ratio is most commonly used to evaluate charitable organizations?

Supporting activities as classified in the Statement of Activities,normally include

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?

If a private not-for-profit fails to comply with donor restriction on contributions received,the organization must accrue and disclose a contingent liability following FASB Statement No.5.

A membership pass to the YMCA (a private not-for-profit organization) includes unlimited rights to all facilities and a health magazine subscription.Non-members do not possess these rights.How must the YMCA account for membership dues?