Question 1

For a permanent endowment created by a cash donation, endowment investment dividends that can be spent in any manner-but are unspent at year-end-are reported as increases in TR net assets.

Accepted Answer

A) True 
 B)False

Question 2

Endowment investment gains and losses on specific donated assets that must be held in perpetuity are reported as changes to TR net assets.

Accepted Answer

A) True 
 B)False

Question 3

_____ Status State University (SSU) has volunteers who (a) regularly provide teaching services to SSU and (b) are paid only nominal amounts to reimburse them for their commuting costs. During 2006, SSU paid $33,000 to these volunteers (retired scientists who teach science courses on a part-time basis). The gross value of services performed by these volunteers amounted to $400,000. What amount should SSU report for contributions revenues in 2006 for these volunteers' services?

Accepted Answer

A)  $-0- 
B)  $33,000 
C)  $367,000 
D)  $400,000 
E)  $433,000

Question 4

Under FAS 116, an implied time restriction on contributed capital assets is assumed to exist in the absence of donor-imposed restrictions.

Accepted Answer

A) True 
 B)False

Question 5

Under FAS 116, contributions that create term endowments are classified as increasing temporarily restricted net assets.

Accepted Answer

A) True 
 B)False

Question 6

Contributed works of art, historical treasures, and similar assets are called __________________________________.

Accepted Answer

The answer of Contributed works of art, historical treasures, and...

Question 7

Contributed services are recognized if they (a) create or enhance __________________________________________ or (b) require _____________________________________.

Accepted Answer

The answer of Contributed services are recognized if they (a)...

Question 8

Under FAS 116, contributed services are valued using the minimum wage.

Accepted Answer

A) True 
 B)False

Question 9

A transfer in which value is not received or given in exchange is a(n) ______________________________transfer.

Accepted Answer

The answer of A transfer in which value is not...

Question 10

For public C&Us engaged only in business-type activities, the restricted net assets section of the statement of net assets is broken down as to __________________________ and _____________________________.

Accepted Answer

The answer of For public C&Us engaged only in business-type...

Question 11

_____	Sable Private University (SPU) has volunteers who (a) regularly provide teaching services to SPU and (b) are paid only nominal amounts to reimburse them for their commuting costs. During 2006, SPU paid $33,000 to these volunteers (retired scientists who teach science courses on a part-time basis). The gross value of services performed by these volunteers amounted to $400,000. What amount should SPU report for expenses for volunteers' services?

Accepted Answer

A)  $-0- 
B)  $33,000 
C)  $367,000 
D)  $400,000 
E)  $433,000

Question 12

_____	On 5/5/05, a donor contributed an equity security having a $500,000 fair value. The donor stipulated that (a) the NPO may sell the equity security at any time and make other suitable investments, (b) the $500,000 endowment must remain intact in perpetuity, and (c) the income and gains may be spent only on diabetes research (no mention is made regarding the treatment of losses). (No dividends were received in any year.) In early 2006, a portion of the equity security was sold for $30,000 cash. The NPO spent $22,000 cash on diabetes research in 2006. The equity security had a fair value of $530,000 at 12/31/05, $480,000 at 12/31/06, and $555,000 at 12/31/07. What is the change in the various categories of net assets for 2007 as a result of the increase in the equity security's market value in 2007?

Accepted Answer

A)  Increase UR net assets by $20,000 and TR net assets by $55,000. 
B)  Increase TR net assets by $75,000. 
C)  Increase PR net assets by $12,000 and TR net assets by $63,000. 
D)  Increase PR net assets by $20,000 and TR net assets by $55,000. 
E)  Increase UR net assets by $12,000 and TR net assets by $63,000.

Question 13

Endowment investment gains on specific donated assets that were received this year and must be held for 50 years are reported as increases to UR net assets-if investment income can be spent in any manner.

Accepted Answer

A) True 
 B)False

Question 14

For public C&Us engaged only in business-type activities, its operating statement consists of the following four categories: (1) _____________________________, (2) ___________________________, (3) _____________________________. and (4) ___________________________.

Accepted Answer

The answer of For public C&Us engaged only in business-type...

Question 15

Restrictions on long-lived assets classified as temporarily restricted net assets ________________ over the life of the assets.

Accepted Answer

The answer of Restrictions on long-lived assets classified as temporarily...

Question 16

Under FAS 117, the statement of financial position must show total amounts for each classification of net assets.

Accepted Answer

A) True 
 B)False

Question 17

_____	Volunteers constructed an addition to an existing building owned by a nonprofit organization. The cost of materials was $60,000 (donated by local firms). The value of the labor hours (based on prevailing hourly rates for carpenters and electricians) was $40,000. An outside contractor offered to do the work for $115,000. At the completion of the job, the county property tax assessor assigned a value of $120,000 to the addition. Under FAS 116, how much should be reported in the financial statements for donated services?

Accepted Answer

A)  $100,000 
B)  $115,000 
C)  $120,000 
D)  $100,000 or $120,000 at the option of the nonprofit organization. 
E)  $115,000 or $120,000 at the option of the nonprofit organization.

Question 18

The statement of cash flows may be prepared using the ________________ method (the preferred method) or the ______________ method.

Accepted Answer

The answer of The statement of cash flows may be...

Question 19

Under FAS 116, collection items need not be capitalized under certain circumstances.

Accepted Answer

A) True 
 B)False

Question 20

Contributions that create ______________ are permanently restricted contributions.

Accepted Answer

The answer of Contributions that create ______________ are permanently restricted...

Exam 26: Not-For-Profit Organizations: Introduction and Private Npos

For a permanent endowment created by a cash donation, endowment investment dividends that can be spent in any manner-but are unspent at year-end-are reported as increases in TR net assets.

Endowment investment gains and losses on specific donated assets that must be held in perpetuity are reported as changes to TR net assets.

Under FAS 116, an implied time restriction on contributed capital assets is assumed to exist in the absence of donor-imposed restrictions.

Under FAS 116, contributions that create term endowments are classified as increasing temporarily restricted net assets.

Contributed works of art, historical treasures, and similar assets are called __________________________________.

Contributed services are recognized if they (a) create or enhance ______ or (b) require _.

Under FAS 116, contributed services are valued using the minimum wage.

A transfer in which value is not received or given in exchange is a(n) ______________________________transfer.

For public C&Us engaged only in business-type activities, the restricted net assets section of the statement of net assets is broken down as to and ___.

Endowment investment gains on specific donated assets that were received this year and must be held for 50 years are reported as increases to UR net assets-if investment income can be spent in any manner.

For public C&Us engaged only in business-type activities, its operating statement consists of the following four categories: (1) _______________, (2) _, (3) _. and (4) ___________.

Restrictions on long-lived assets classified as temporarily restricted net assets ________________ over the life of the assets.

Under FAS 117, the statement of financial position must show total amounts for each classification of net assets.

The statement of cash flows may be prepared using the __ method (the preferred method) or the method.

Under FAS 116, collection items need not be capitalized under certain circumstances.

Contributions that create ______________ are permanently restricted contributions.