Question 1

Which of the following terms is used to indicate that a donor provided a gift with explicit instructions that the gift is to be used for a specific purpose by the NPO but the entire amount may be spent right away?

Accepted Answer

A) Board-designated net assets. 
B) Permanently restricted net assets. 
C) Endowment assets. 
D) Temporarily restricted net assets.

Question 2

Museums and religious organizations must capitalize and report in their balance sheets assets such as works of art,historical treasures,historical archives,and similar collectible items if they are held for public inspection.

Accepted Answer

A) True 
 B)False

Question 3

Distinguish not-for-profit organizations from entities in the governmental and commercial sectors of the U.S.economy.

Accepted Answer

The answer of Distinguish not-for-profit organizations from entities in the...

Question 4

Responsibility for establishing generally accepted accounting principles (GAAP)for nongovernmental,not-for-profit organizations rests with the FASB and was most clearly established

Accepted Answer

A) In the 1930s. 
B) When the FASB was created in 1974. 
C) When the GASB was created in 1984. 
D) In the AICPA's Statement of Auditing Standards No.69 (hierarchy of GAAP)in 1992.

Question 5

Which of the following is not one of the criteria specified in AICPA Statement of Position 98-2 that provides guidance on when joint costs with a fund-raising appeal can be reported with program expenses rather than as fund-raising expenses?

Accepted Answer

A) Purpose. 
B) Audience. 
C) Time period. 
D) Content.

Question 6

Depreciation expense in a not-for-profit organization should be

Accepted Answer

A) Assigned to or allocated to the functions to which it relates. 
B) Reported under the management and general caption. 
C) Disclosed in the notes to the financial statements. 
D) Allocated to program but not support functions.

Question 7

Temporarily restricted net assets are released from restrictions

Accepted Answer

A) At the end of each fiscal year. 
B) As assets are spent for the purposes intended by the donor. 
C) When funds are returned to the donor. 
D) When they are converted to permanently restricted net assets.

Question 8

Explain when donated materials should be recognized as a contribution and as an expense by a not-for-profit organization.

Accepted Answer

The answer of Explain when donated materials should be recognized...

Question 9

Hospitals,colleges and universities,voluntary health and welfare organizations,and other not-for-profit organizations all follow the same standards for recognition of revenues and expenses.

Accepted Answer

A) True 
 B)False

Question 10

Not-for-profit organizations should be conservative and record pledges as support (contributions)only when received in cash.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is true regarding fund accounting for not-for-profit organizations (NPOs)?

Accepted Answer

A) Fund accounting may provide a good mechanism for facilitating reporting to donors for restricted grants. 
B) Fund accounting may be used by NPOs for external purposes,but not internal purposes. 
C) Fund accounting is not allowed. 
D) SFAS Nos.116 and 117 method of reporting three classes of net assets (unrestricted,temporarily restricted,and permanently restricted)replaces fund accounting for both internal and external reporting purposes.

Question 12

A not-for-profit organization that follows GAAP must display the changes in all classes of net assets on the

Accepted Answer

A) Statement of activities. 
B) Statement of financial position. 
C) Statement of cash flows. 
D) Statement of functional expenses.

Question 13

Which of the following statements is not a true statement about reporting of financially related not-for-profit entities?

Accepted Answer

A) If an NPO has a controlling interest in a for-profit entity,it should consolidate that entity's financial information with its own. 
B) If an NPO has a joint agreement with another NPO to provide transportation for clients of the other organization,it should consolidate that entity's financial information with its own. 
C) If an NPO has an economic interest in another entity but not control,it should disclose that in the notes to the financial statements. 
D) If an NPO has significant influence over a for-profit entity,it should use the equity method to report that investment on its financial statement.

Question 14

Expense amounts by natural classification can be determined from the statement of functional expenses,as can the expense amounts for program services and supporting services categories.

Accepted Answer

A) True 
 B)False

Question 15

SFAS No.117 requires that support from special events,if related to the central ongoing and major activities of the organization,and related direct costs,be reported at their gross amounts in the statement of activities rather than reporting the special events support net of direct costs.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following would be considered "contribution revenue or support" of an NPO?

Accepted Answer

A) Gain on disposal of capital assets. 
B) Contributions received from a fund-raising campaign. 
C) Rent earned from rental of surplus office space. 
D) Investment earnings.

Exam 14: Not-For-Profit Organizations Regulatory, taxation, and Performance Issues

Which of the following terms is used to indicate that a donor provided a gift with explicit instructions that the gift is to be used for a specific purpose by the NPO but the entire amount may be spent right away?

Museums and religious organizations must capitalize and report in their balance sheets assets such as works of art,historical treasures,historical archives,and similar collectible items if they are held for public inspection.

Distinguish not-for-profit organizations from entities in the governmental and commercial sectors of the U.S.economy.

Responsibility for establishing generally accepted accounting principles (GAAP) for nongovernmental,not-for-profit organizations rests with the FASB and was most clearly established

Which of the following is not one of the criteria specified in AICPA Statement of Position 98-2 that provides guidance on when joint costs with a fund-raising appeal can be reported with program expenses rather than as fund-raising expenses?

Depreciation expense in a not-for-profit organization should be

Temporarily restricted net assets are released from restrictions

Explain when donated materials should be recognized as a contribution and as an expense by a not-for-profit organization.

Hospitals,colleges and universities,voluntary health and welfare organizations,and other not-for-profit organizations all follow the same standards for recognition of revenues and expenses.

Not-for-profit organizations should be conservative and record pledges as support (contributions)only when received in cash.

Which of the following statements is true regarding fund accounting for not-for-profit organizations (NPOs) ?

A not-for-profit organization that follows GAAP must display the changes in all classes of net assets on the

Which of the following statements is not a true statement about reporting of financially related not-for-profit entities?

Expense amounts by natural classification can be determined from the statement of functional expenses,as can the expense amounts for program services and supporting services categories.

SFAS No.117 requires that support from special events,if related to the central ongoing and major activities of the organization,and related direct costs,be reported at their gross amounts in the statement of activities rather than reporting the special events support net of direct costs.

Which of the following would be considered "contribution revenue or support" of an NPO?