Exam 9: Reporting for Not-For-Profit Organizations

Aliberry Research Foundation is a large non-profit organization that funds research into a variety of financial instruments. Annual revenues are in excess of $15 million. It has an endowment fund, a general fund and a capital fund. You have just been appointed treasurer of its Board and the accountant has come to you with a variety of questions. Aliberry received a large endowment of $3 million on January 31, 2013. During the year ended 2013, there was interest earned of $120,000. Required: Prepare the journal entries required to record the receipt of the endowment and the interest earned assuming the entity uses the restricted fund method.

Regarding capital assets, large not-for-profit organizations are required to ________.

Which of the following statements regarding specific not-for-profit transactions is FALSE?

A local antique shop pledged 10% of its sales on July 1 to Fresh Start, a not-for-profit organization. How should Fresh Start treat this pledge?

Contributions are considered revenue to the not-for-profit entity.

When budgetary control accounts are first set up, ________.

Which of the following would result in higher income under the restricted fund basis as compared to the deferral method for a not-for-profit organization in its first year of operations?

Not-for profit organizations require additional disclosure with respect to strategic investments, related party transactions, and allocated expenses.

What are contributions?

The Helping Hand Society, a not-for-profit organization, owns 25% of the shares of Dawson's Diner, a for-profit organization. Three of the ten-person board of directors of Dawson's Diner are also directors of the Helping Hand Society. How should the Helping Hand Society account for its investment in Dawson's Diner?

The primary objective of using an encumbrance system is to keep track of an organization's ________.

The Salvation Society, a not-for-profit organization, owns 5% of the shares of the Mobile Meals Inc., a for-profit organization. The two organizations operate independently and have no board members in common. How should the Salvation Society account for its investment in Mobile Meals Inc.?

During the year, a not-for-profit art gallery acquired a number of pieces for its collection. Which of the following choices for reporting the acquisitions is NOT in accordance with the CICA Handbook?

Ronwell Gates donated $200,000 to Conway University and specified that the principal amount not be spent but be maintained permanently. Interest on the invested funds can be used to award scholarships to those who excel in theoretical physics. How should the $200,000 contribution be presented on Conway University's financial statements?

Discuss the recognition and measurement of tangible capital assets and intangibles in non-for-profit organization.

Under fund accounting:________.

Kayla made a $150,000 contribution to the Gilliam Society, a not-for-profit organization. Kayla stipulated that his contribution is to be used for the organization's special events program in the next year. How should Gilliam record the contribution at the time of contribution?

The reader of the financial statements of a not-for-profit organization needs to be able to Review section if:

Which of the following statements regarding fund accounting is FALSE?

When is it NOT appropriate to use an encumbrance system?