Question 1

Which entry would be the correct entry to record pledges of $100,000 to a public television fundraiser? The public television organization estimates that 5% of the funds will be uncollectible.

Accepted Answer

A) debit Pledges Receivable $100,000,credit unrestricted net assets-contributions $100,000. 
B) debit Cash $100,000,credit unrestricted net assets-contributions $100,000. 
C) debit Pledges Receivable $100,000,credit unrestricted net assets-contributions $95,000,credit allowance for uncollectible pledges $5,000. 
D) debit Pledges Receivable $95,000,debit allowance for uncollectible pledges $5,000,credit unrestricted net assets-contributions $100,000. 
E) debit cash $95,000,debit allowance for uncollectible pledges $5,000,credit unrestricted net assets-contributions $100,000.

Question 2

Which of the following types of health care organizations recognize depreciation expense?

Accepted Answer

A) Entry A. 
B) Entry B. 
C) Entry C. 
D) Entry D. 
E) Entry E.

Question 3

Which entry would be the correct entry to record that a not-for-profit organization collected $80,000 of amounts pledged and wrote off $3,000 of amounts pledged as amounts uncollectible?

Accepted Answer

A) debit Pledges Receivable $80,000,credit Cash $80,000. 
B) debit Cash $80,000,credit Pledges Receivable $80,000. 
C) debit Pledges Receivable $80,000,credit allowance for uncollectible pledges 3,000,credit Cash $83,000. 
D) debit cash $80,000,debit allowance for uncollectible pledges $3,000,credit Pledges Receivable $83,000. 
E) debit cash $80,000,debit allowance for uncollectible pledges $3,000,credit unrestricted net assets-contributions $83,000.

Question 4

Give several examples of voluntary health and welfare organizations.

Accepted Answer

The answer of Give several examples of voluntary health and...

Question 5

On a statement of functional expenses for a voluntary health and welfare organization,how are expenses classified?

Accepted Answer

A) health services expenses and operating expenses. 
B) program services expenses and administrative services expenses. 
C) program services expenses and supporting services expenses. 
D) operating expenses and supporting services expenses. 
E) operating expenses and administrative expenses.

Question 6

For a voluntary health and welfare organization,what are supporting services expenses?

Accepted Answer

The answer of For a voluntary health and welfare organization,what...

Question 7

What is the basis used in reporting the Statement of Activities and Changes in Net Assets?

Accepted Answer

A) Cash basis. 
B) Modified accrual basis. 
C) Accrual basis. 
D) Either cash basis or accrual basis,depending on the type of revenue. 
E) Either modified accrual basis or accrual basis,depending on the type of revenue.

Question 8

During 2008,the Garfield Humane Society,a voluntary health and welfare organization,received cash donations of $892,000 and membership dues of $62,000.A member of the Humane Society donated services valued at $8,000 that would otherwise have been performed by a paid staff member.A pet food manufacturer donated dog food valued at $16,400.The Humane Society received a gift of $140,000,to be used in building a new animal shelter.Also during 2008,investments held by the Humane Society earned interest of $2,000.
Required:
Prepare a schedule showing the amount that the Garfield Humane Society should have recorded for public support for 2008.

Accepted Answer

The answer of During 2008,the Garfield Humane Society,a voluntary health...

Question 9

The Home incurred the following liabilities: $110,000 salaries,$30,000 medical equipment,$10,000 utilities expense.
Prepare the journal entries for these transactions.

Accepted Answer

The answer of The Home incurred the following liabilities: $110,000...

Question 10

How does a not-for-profit organization record the receipt of a gift that will be transferred to another charitable organization without restrictions? What if the donor retains the right to revoke or redirect the gift?

Accepted Answer

The answer of How does a not-for-profit organization record the...

Question 11

REFERENCE: Ref.18_04
A not-for-profit organization (Charity A)raises money for other charitable organizations.Charity A receives $10,000 to distribute to Charity B.
-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 REFERENCE: Ref.18_04
A not-for-profit organization (Charity A)raises money...

Question 12

What criteria must be met before a voluntary health and welfare organization can recognize donated services as a means of support?

Accepted Answer

The answer of What criteria must be met before a...

Question 13

REFERENCE: Ref.18_03
Dura Foundation,a voluntary health and welfare organization dedicated to finding medical cures and supported by contributions from the general public,included the following costs in its Statement of Functional Expenses for the year ended December 31,2008:
 
-What should Dura Foundation report as program service expenses?

Accepted Answer

The answer of REFERENCE: Ref.18_03
Dura Foundation,a voluntary health and welfare...

Question 14

According to FASB Statement 117,how are not-for-profits to utilize separate funds?

Accepted Answer

The answer of According to FASB Statement 117,how are not-for-profits...

Question 15

A local business donated medical supplies to Wakefield with a value of $40,000.
Prepare the journal entry for the receipt of these supplies.

Accepted Answer

The answer of A local business donated medical supplies to...

Question 16

A local social worker,earning $12 per hour working for the state government,contributed 600 hours of time at no charge to the Yelton Center,a voluntary health and welfare organization.Except for these donated services,an additional staff person would have been hired by the organization.
Required:
How should the Yelton Center record the contributed services?

Accepted Answer

The answer of A local social worker,earning $12 per hour...

Question 17

What term is used by voluntary health and welfare organizations for contributions?

Accepted Answer

The answer of What term is used by voluntary health...

Question 18

What is the appropriate account to credit when estimating a portion of receivables that will prove to be uncollectible?

Accepted Answer

A) Bad Debt Expense. 
B) Allowance for Uncollectible Accounts. 
C) Patient Service Revenues. 
D) Accounts Receivable. 
E) Contractual Adjustments.

Question 19

Unconditional transfers of cash or other resources to an entity in a voluntary nonreciprocal transaction is the SFAS 116 definition for

Accepted Answer

A) miscellaneous revenues. 
B) contributions. 
C) unconditional promises to give. 
D) exchange transactions. 
E) pledges.

Question 20

REFERENCE: 18_01
The following gifts are received in Year One by a not-for-profit organization:
I.$2,000 specified by the donor to be used to pay salaries.
II.$10,000 for new conference room furniture.
III.$5,000 to be held for one year before being expended.
The salaries are paid in Year Two and the conference room furniture is purchased in Year One.
-How much should be reclassified on the Statement of Activities in Year Two from the Temporarily Restricted column to the Unrestricted column?

Accepted Answer

A) $2,000. 
B) $5,000. 
C) $7,000. 
D) $10,000. 
E) $12,000.

Exam 18: Accounting for Not-For-Profit Organizations