Which organization has standard setting authority over governmentally related not-for-profit organizations, such as hospitals colleges and universities.
A) GASB.
B) FASB.
C) AICPA.
D) SEC.
A) GASB
Private not-for-profits must follow all applicable ____ standards in recording transactions.
A) AICPA.
B) FASB.
C) GASB.
D) SEC.
B) FASB.
60. Identify the standard setting body for private not-for-profit organizations and the basis of accounting that should be used.
A) GASB & Accrual.
B) GASB & Modified Accrual.
C) FASB & Accrual.
D) FASB & Modified Accrual.
C) FASB & Accrual.
Which of the following is not a distinguishing characteristic of a private not-for-profit organization according to FASB Statement No. 116?
A) Operating purposes other than to provide goods or services at a profit.
B) Absence of ownership interests like t
D) Upon dissolution of the organization, remaining assets are to be distributed to the original contributors.
What are the financial statements required for all nongovernmental, not-for-profit organizations?
A) Statement of Financial Position, Statement of Activities, Statement of Cash Flows, Statement of Functional Expenses.
B) Statement of Financial Position, S
D) Statement of Financial Position, Statement of Activities, Statement of Cash Flows.
Which of the following are the net asset classes required by the FASB for private not-for-profit organizations?
A) Reserved and Unreserved.
B) Invested in Capital Assets, Net of Related Debt, Restricted, and Unrestricted.
C) Permanently Restricted, Tempor
C) Permanently Restricted, Temporarily Restricted, Unrestricted.
Which of the following is true regarding accounting and financial reporting for nongovernmental, not-for-profit organizations?
A) Expenses are classified as unrestricted or temporarily restricted.
B) Expenses must be reported by function, either in the st
B) Expenses must be reported by function, either in the statements or in the notes.
Which of the following statements is not correct with respect to contributions to a private not-for-profit?
A) Contributions to a not-for-profit are recorded at fair market value at the date of receipt.
B) Contributions of assets other than cash to a not-
B) Contributions of assets other than cash to a not-for-profit are recorded at the donor's basis.
Which of the following is not correct with respect to the reporting of expenses for a private not-for-profit?
A) Expenses can be reported in the unrestricted net asset class or restricted net asset class, as appropriate.
B) Expenses are reported by functi
A) Expenses can be reported in the unrestricted net asset class or restricted net asset class, as appropriate.
With the exception of collections, fixed assets may be recorded by a private not-for-profit as:
A) Temporarily restricted
B) Unrestricted
C) Both A & B above.
D) Neither A nor B above.
C) Both A & B above.
FASB Statement 124, Accounting for Certain Investments of Not-for-Profit Organizations:
A) Requires that investments in equity securities be carried at book value.
B) Requires that investments in debt securities be carried at fair value.
C) Requires that
B) Requires that investments in debt securities be carried at fair value.
Contributed services are recognized as revenue for a private not-for-profit when the service:
A) Is related to administration and fund raising activities.
B) Requires specialized skills, is provided by someone possessing those skills, and typically would
B) Requires specialized skills, is provided by someone possessing those skills, and typically would be purchased if not provided by donation.
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)?
A) The City of Hannibal Missouri.
B) S
B) St. Jude Children's Hospital.
Which of the following organizations would be subject to the (level b) accounting and reporting requirements of the AICPA's Audit and Accounting Guide: Not-for-Profit Organizations?
A) The International Brotherhood of Electrical Workers.
B) St. Jude Child
A) The International Brotherhood of Electrical Workers.
Which of the following is not true regarding the treatment of multiyear pledges, according to FASB Statement 116?
A) They are recorded at the present value of future collections.
B) They should be reported net of an allowance for estimated uncollectibles.
D) At the end of each accounting period, the difference between the new and previously recorded present value is recorded as interest revenue.
If a donor selects a scholarship recipient, and then donates cash to a ballet school to fund that scholarship, the ballet school would:
A) Record a liability, as it is merely acting as an agent for the donation.
B) Record the donated cash as a contributio
A) Record a liability, as it is merely acting as an agent for the donation.
Which of the following is part of the treatment of multi-year pledges as required by FASB Statement No. 116?
A) The donation is recorded as a receivable at the present value of the future collections but revenue is not recorded until the pledge is receive
C) At the end of each accounting period, the difference between the balance in the receivable account and the new present value is recorded as contribution revenue and the receivable is increased.
A civic ballet company sells 100 "Benefactor" status memberships for $1,000 each. The Benefactors each receive a season ticket valued at $400, and a listing in the company's program. How would the ballet company record the sale of these 100 memberships?
A
D) Cash $100,000
Deferred Revenue $ 40,000
Contributions - Unrestricted 60,000
Which of the following is true regarding the Statement of Financial Position for nongovernmental, not-for-profit organizations?
A) The Statement must display assets and liabilities separated between the categories of unrestricted, temporarily restricted,
B) The Statement must display totals for net assets separated between the categories of unrestricted, temporarily restricted, and permanently restricted.
Which of the following is true regarding the Statement of Activities for nongovernmental, not-for-profit organizations?
A) FASB requires that the change in net assets be reported for each of the net asset classes and in total.
B) Expenses are reported as
A) FASB requires that the change in net assets be reported for each of the net asset classes and in total.
Which of the following is true regarding the Statement of Cash Flows for nongovernmental, not-for-profit organizations?
A) Either the direct or indirect method may be used.
B) If a not-for-profit organization received a cash contribution for permanently r
C) Both of the above.
Which of the following would be a contribution increasing permanently restricted net assets?
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
D) Neither A nor B above
A donor gave artwork to a nongovernmental, not-for-profit museum. The artwork qualified as a "collection," under FASB rules. The not-for-profit could:
A) Record the artwork at its fair market value at the time of receipt as an increase in permanently rest
C) Do either of the above, depending upon the policy of the not-for-profit.
Which of the following contributed services would probably not be recognized as contribution revenue?
A) An attorney donates her services to defend the Girl Scouts in a lawsuit.
B) A nurse donates her time to collect blood at an American Red Cross blood d
D) State CPA society members hand out informational booklets at a shopping mall.
A donor gave $60,000 to a nongovernmental, not-for-profit charity with instructions that the funds be transferred to Sam Smith, an individual who lost his home in a fire. The not-for-profit would:
A) Record the $60,000 cash and credit a liability.
B) Reco
A) Record the $60,000 cash and credit a liability.
A donor gave $100,000 to a foundation, which is financially related to a nongovernmental, not-for-profit organization. The foundation, which is also a nongovernmental, not-for-profit organization, would record the $100,000 as:
A) A Revenue.
B) A Liability
A) A Revenue.
Which of the following organizations does not follow the AICPA's Not-for-Profit Guide?
A) Political parties.
B) Voluntary health and welfare organizations.
C) City libraries.
D) Private foundations.
C) City libraries.
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
A) Only I.
B) Only I & II.
C) Only 1 & III.
D) I,
D) I, II & III.
A skilled carpenter repaired the roof of the administrative building for a private not-for-profit free of charge. The not-for-profit would have had to pay $2,000 for this service if not donated. What entry should the not-for-profit make?
A) No entries are
B) Supporting Service expense $2,000
Contribution revenue $2,000
Henry Highbrow promises to donate $50,000 to his church toward the purchase of a new pipe organ if the church is able to raise matching funds of $50,000 from other contributors. At what point should the church record revenue?
A) When Henry makes his pledg
C) When the matching funds are raised.
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) At the time when the church was informed of her will.
B) At the tim
D) At the date the probate court declares the will valid following her death.
Care Foundation is a voluntary health and welfare organization funded by contributions from the general public. Care sold equipment for $30,000 which cost $40,000 and had a book value of $25,000 at the time of sale. In recording the sale, Care should:
A)
A) Record a gain of $ 5,000.
An unconditional pledge of support is properly recorded as Temporarily Restricted Revenue at the time of the pledge. Changes in the present value of the receivable resulting from the passage of time is reported as:
A) Contribution revenue.
B) Interest inc
A) Contribution revenue.
Care Foundation is a voluntary health and welfare organization funded by contributions from the general public. In its Statement of Activities, the annual provision for depreciation should:
A) Not be included.
B) Be included as an element of support.
C) B
D) Be included as an element of expense.
Uptown Church received a donation of marketable equity securities from a church member. In reviewing the financial press, it is determined that the securities had appreciated during the year. At what amount should Uptown report its marketable equity secur
B) Market value at the balance sheet date.
Which of the following factors, if present, would indicate that a transaction is not a contribution?
A) The resource provider received value in exchange.
B) The resource provider entered into the transaction voluntarily.
C) The transfer of assets was unco
A) The resource provider received value in exchange.
A donor made a gift of cash to a private not-for-profit organization in 2014 with an expressed purpose restriction. All the funds were expended in 2014. The organization must:
A) Record the gift as a temporarily restricted revenue, reclassify the funds to
D) Use either of the methods described in (a) or (b).
Which of the following is a legitimate reason for a private not-for-profit organization to have a surplus (increase in net assets)?
A) To establish working capital.
B) To retire debt.
C) Both (a) and (b) above.
D) None of the above, not-for-profits should
C) Both (a) and (b) above.
What financial ratio is most commonly used to evaluate charitable organizations?
A) Current assets / current liabilities.
B) Increase in net assets / total assets.
C) Program expenses / total expenses.
D) Total expenses / total revenues.
C) Program expenses / total expenses.
A donor gave equipment valued at $50,000 at the beginning of 2014 to a private not-for-profit organization. The equipment had a 10-year life and depreciation of $5,000 was charged during 2014. At the end of the year, the net assets to be reported in unres
D) Either $45,000 or $0, depending upon the policy of the organization
A private not-for-profit organization received a gift of $460,000 with purpose restrictions in 2013. In 2014 funds were expended for the purpose outlined in the gift, however, it was not possible to determine whether the restricted funds or unrestricted f
A) The restricted funds would have been used first.
Which of the following pledges of support would not be recognized in the year the pledge was made?
A) An unconditional pledge restricted to a particular year in the future.
B) An unconditional pledge restricted to a particular purpose.
C) A pledge with no
C) A pledge with no restrictions, but conditional on receiving matching pledges.
Under FASB Statement 117, reclassifications of net assets are not made:
A) For satisfaction of time restrictions.
B) For satisfaction of program restrictions.
C) For satisfaction of fixed asset acquisition.
D) For permanently restricted net assets.
D) For permanently restricted net assets.
Which of the following is true of a Statement of Cash Flows for a private sector, private not-for-profit organization?
A) Four categories are used: Operating, Capital Related Financing, Non-capital Related Financing, and Investing.
B) If the direct method
B) If the direct method is used, the not-for-profit must also present a reconciliation between total change in net assets and cash flows from operating activities.
Which of the following is not true of a Statement of Activities prepared for a private not-for-profit organization?
A) Expenses are shown only as decreases in unrestricted net assets.
B) Reclassifications for expiration of time restrictions are shown in t
C) Unrealized gains (losses) on investments are shown only as increases (decreases) in unrestricted net assets.
The Statement of Functional Expenses:
A) Is no longer a required financial statement of any organization.
B) Is required of all private not-for-profit organizations.
C) Is required of all private colleges but not public colleges.
D) Is required of volunta
D) Is required of voluntary health and welfare organizations.
Which of the following is not a condition for recording donated services?
A) The individual providing the service provides an invoice detailing the hours contributed but waives the requirement for payment.
B) The service requires a specialized skill and t
A) The individual providing the service provides an invoice detailing the hours contributed but waives the requirement for payment.
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 acquir
C) Record the building as either unrestricted or temporarily restricted, as long as a consistent policy is followed.
In 2014, a major drug company agreed to give a not-for-profit private college $300,000 to perform testing of a new drug. An advance payment of $200,000 was received in 2014. The college was to receive $1,500 per individual test. In 2014, the college compl
C) $ 150,000
A donor made a pledge in 2013 of $ 50,000 to a private not-for-profit organization with the intent to pay the cash in 2014 for unrestricted use in 2014. The organization should:
A) Record the pledge receivable and deferred revenue in 2013.
B) Record the p
C) Record the pledge as temporarily restricted revenue in 2013 and reclassify it to unrestricted in 2014.
A donor gave $ 1,000,000 to a private not-for-profit organization to be held in endowment. In addition, the governing board permanently designated $ 500,000 to the endowment. In the Statement of Financial Position, how should these amounts be classified?
B) Permanently Restricted: $1,000,000; Unrestricted: $ 500,000
The FASB has the authority to set accounting standards for all of the following organizations except:
A) Political parties..
B) For profit hospitals.
C) City owned hospital
D) Trade associations.
C) City owned hospital
Which of the following would not be an example of a voluntary health and welfare organization?
A) A state community college.
B) A private mental health facility.
C) A family planning agency.
D) A food bank.
A) A state community college.
Under which of the following conditions is it appropriate for a private not-for-profit to allocate the cost of mass mailings from fund raising to a program related activity, such as Public Education?
A) The purpose of the mailing includes accomplishing pr
D) All of the above.
Which of the following is not a characteristic that distinguishes a private not-for-profit organization from a business?
A. Contributions are from resource providers who expect nothing in return.
B. Financial statements are intended primarily for use by d
C. The organization's revenues exceed expenses.
Which of the following is not an example of a voluntary health and welfare organization?
A. Meals on Wheels.
B. Big Brothers/Big Sisters.
C. Performing arts organizations.
D. Girl and Boy Scouts.
C. Performing arts organizations.
Reclassifications from permanently restricted net assets to temporarily restricted net assets would occur only under which of the following circumstances?
A) Time restrictions placed on the permanently restricted net assets have been
met.
B). Purpose rest
D). Permanently restricted net assets would not be reclassified to temporarily restricted net assets.
FASB statement 116 requires contributions to be recorded as revenue when
A) The contribution is promised.
B) The contributed asset is actually received.
C) The contribution is likely to be received.
D) The contribution is probable and measurable.
A) The contribution is promised.
Which of the following statements is false with respect to private not-for-profit organizations?
A) Exchange transactions should be recorded on the accrual basis of accounting where the revenues are recognized when earned.
B) An intention to give should b
B) An intention to give should be recorded as revenue when the intention is communicated to the not-for-profit.
Donors to private not-for-profit entities are primarily concerned with which of the following performance measures?
A) Program Expense Ratio.
B) Return on Investment.
C) Change in Net Assets.
D) Ending Unrestricted Net Assets.
A) Program Expense Ratio.
A Statement of Functional Expenses is required for
A) State governments.
B) Tax agencies.
C) Voluntary health and welfare organizations.
D) Colleges and universities.
C) Voluntary health and welfare organizations.
Supporting activities as classified in the Statement of Activities, normally include
A) Management and general.
B) Fund-raising.
C) Membership development.
D) All of the above.
D) All of the above.
In 2014, 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?
A) Only after Susan dies and the will is declared valid.
B) Ratably ove
A) Only after Susan dies and the will is declared valid.
When should unconditional pledges be recorded as revenue?
A) Never.
B) When money is received.
C) When the pledge is made.
D) When full collection is assured.
C) When the pledge is made.
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?
A) The dues are a
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.
The entry to record the expiration of program restrictions includes which of the following?
A) Debit Reclassification from Temporarily Restricted Net Assets.
B) Credit Performance Expense.
C) Debit Reclassification to Unrestricted Net Assets.
D) Credit Re
A) Debit Reclassification from Temporarily Restricted Net Assets.
Which of the following is not an example of a donor imposed restriction?
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 restric
D) All of the above are examples of donor imposed restrictions.
Which of the following is a legitimate reason for a private not-for-profit to generate a surplus?
A) Retiring debt.
B) Establishing working capital.
C) Both A & B above. D) Neither A nor B above
C) Both A & B above.
The equity section of Statement of Financial Position for private not-for-profits includes which accounts?
A) Unrestricted, Temporarily Restricted, Permanently Restricted Net Assets.
B) Invested in Capital Assets net of related debt, Restricted and Unrest
A) Unrestricted, Temporarily Restricted, Permanently Restricted Net Assets.
The institution's governing board decided to create an endowment from contributed funds, this is called a(n) ________ and the funds are unrestricted.
A) Endowment.
B) Term endowment.
C) Quasi-endowment.
D) None of the above.
C) Quasi-endowment.
Which of the following financial statements are required for voluntary health and welfare organizations?
A) Income Statement.
B) Statement of Net Assets.
C) Statement of Cash Flows.
D) Budgetary Comparison Schedule.
C) Statement of Cash Flows.
The FASB requires that expenses of voluntary health and welfare organizations be reported according to function. Which of the following are FASB required function categories:
A) Operating and Nonoperating
B) Program and Supporting Services.
C) Operating,
B) Program and Supporting Services.
Investments by private not-for-profit organizations in equity securities should be carried at
A) Historical cost.
B) Lower of cost or Market.
C) Fair Market Value.
D) None of the above.
C) Fair Market Value.
The three classes of net assets reported for a private not-for-profit organization include all of the following except:
A) Unrestricted net assets.
B) Temporarily restricted net assets.
C) Capital restricted net assets.
D) Permanently restricted net asset
C) Capital restricted net assets.
How is the receipt of an unconditional pledge to contribute to a private not-for-profit organization recorded?
A) As revenue when pledged.
B) Not recorded until received.
C) As unearned revenue when pledged.
D) None of the above.
A) As revenue when pledged.
How does a for-profit organization record contributions made to a private not-for-profit organization?
A) As an expense when originally pledged.
B) As a reduction in revenue when pledged.
C) As an expense when contributed.
D) As a reduction in revenue whe
A) As an expense when originally pledged.
If a person names a private not-for-profit organization in his or her will, this is considered a(n) ________ and is __________.
A) Conditional promise to give; not recorded.
B) Unconditional promise to give; recorded.
C) Intention to give; recorded.
D) In
D) Intention to give; not recorded.
The following treatment is correct with regards to payments that are partially exchange transactions and partially contributions:
A) Reported only as a exchange transaction.
B) Reported only as a contributions.
C) Reported as either an exchange transactio
D) The two parts should be separately accounted for.
Which of the following would not be recognized as contribution revenue by a private not-for-profit organization?
A) A pledge to support an educational program for the next 3 years.
B) A health clinic is paid to perform clinical trials of a new medicine.
C
B) A health clinic is paid to perform clinical trials of a new medicine.
Which of the following is not correct with respect to mergers under the rules established by FASB Statement No. 164, Not-for-Profit Entities: Mergers and Acquisitions?
A) If the combination qualifies as a merger, it will be accounted for using the carryov
B) Goodwill is recognized on long term assets only
Which of the following is not correct with respect to acquisitions under the rules established by FASB Statement No. 164, Not-for-Profit Entities: Mergers and Acquisitions?
A) If the combination qualifies as an acquisition, the not-for-profit may acquire
D) Entities that derive their revenues from business-like activities are required to expense the goodwill at the date of acquisition.