Question 1

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:

Accepted Answer

A)  Record the pledge receivable and deferred revenue in 2013. 
B)  Record the pledge as unrestricted revenue in 2013. 
C)  Record the pledge as temporarily restricted revenue in 2013 and reclassify it to unrestricted in 2014. 
D)  Record the pledge as temporarily restricted revenue in 2013 and reclassify it to unrestricted in 2014, but only in an amount equivalent to the amount that is spent in 2014.

Question 2

Below are the complete set of published financial statements taken from the annual report of the Jamestown Museum.The statements do not comply with generally accepted accounting principles for private not-for-profits in a number of ways.Review these statements and describe instances in which the statements fail to comply with accepted accounting standards.You must be able to justify your assertions - for example you cannot say they failed to capitalize leases if there is no evidence they have a qualifying lease.
Example:
 (1)The financial statements contain no note disclosures.The notes are an integral part of the financial statements and many individual disclosures are required under FASB standards.

Accepted Answer

The answer of Below are the complete set of published...

Question 3

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:

Accepted Answer

A)  Record a gain of $ 5,000. 
B)  Record "temporarily restricted revenue" of $ 30,000. 
C)  Both (a) and (b) above. 
D)  Neither (a) nor (b) above.

Question 4

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?

Accepted Answer

A)  The purpose of the mailing includes accomplishing program functions. 
B)  The audience is selected based on characteristics other than ability to make contributions. 
C)  The mailing calls for specific action by the recipient that is consistent with the goals of the not-for-profit's mission. 
D)  All of the above.

Question 5

According to FASB Statement No.116,Appendix D,how are not-for-profit organizations distinguished from a business?

Accepted Answer

The answer of According to FASB Statement No.116,Appendix D,how are...

Question 6

Which of the following would be a contribution increasing permanently restricted net assets?

Accepted Answer

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 of $1,000,000 to be used to acquire land. 
C)  Both A & B above. 
D)  Neither A nor B above

Question 7

Conditional pledges should not be recognized as revenue until the conditions have been met.

Accepted Answer

A) True 
 B)False

Question 8

Contributions to a private not-for-profit may be restricted as to time,purpose or for plant acquisition.

Accepted Answer

A) True 
 B)False

Question 9

The FASB requires private not-for-profit organizations to report net assets (the excess of assets over liabilities)separated by unrestricted,temporarily restricted and permanently restricted.

Accepted Answer

A) True 
 B)False

Question 10

Supporting activities as classified in the Statement of Activities,normally include

Accepted Answer

A)  Management and general. 
B)  Fund-raising. 
C)  Membership development. 
D)  All of the above.

Question 11

Which of the following statements is false with respect to private not-for-profit organizations?

Accepted Answer

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 be recorded as revenue when the intention is communicated to the not-for-profit. 
C)  In certain situations contributed services should be recognized as revenue. 
D)  FASB statement 124 requires that investments in equity securities with readily determinable values be reported at fair market value.

Question 12

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?

Accepted Answer

A)  No entries are required for this event. 
B)  Supporting Service expense $2,000 Contribution revenue $2,000 
C)  Capital Expenditures $2,000 Contribution revenue $2,000 
D)  Building $2,000 Contribution revenue $2,000

Question 13

Which of the following is true regarding the Statement of Cash Flows for nongovernmental,not-for-profit organizations?

Accepted Answer

A)  Either the direct or indirect method may be used. 
B)  If a not-for-profit organization received a cash contribution for permanently restricted purposes, that cash contribution would be shown as a cash flow from financing activities. 
C)  Both of the above. 
D)  Neither of the above.

Question 14

Investments by private not-for-profit organizations in equity securities should be carried at

Accepted Answer

A)  Historical cost. 
B)  Lower of cost or Market. 
C)  Fair Market Value. 
D)  None of the above.

Question 15

Private not-for-profit organizations record depreciation expense.

Accepted Answer

A) True 
 B)False

Question 16

Net Assets must be presented separately in the Statement of Financial Position for the three classes (unrestricted,temporarily restricted,and permanently restricted).

Accepted Answer

A) True 
 B)False

Question 17

Examples of voluntary health and welfare organizations would include the Girl Scouts and the American Heart Association.

Accepted Answer

A) True 
 B)False

Question 18

The institution's governing board decided to create an endowment from contributed funds,this is called a(n)________ and the funds are unrestricted.

Accepted Answer

A)  Endowment. 
B)  Term endowment. 
C)  Quasi-endowment. 
D)  None of the above.

Question 19

Which of the following financial statements are required for voluntary health and welfare organizations?

Accepted Answer

A)  Income Statement. 
B)  Statement of Net Assets. 
C)  Statement of Cash Flows. 
D)  Budgetary Comparison Schedule.

Question 20

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 unrestricted net assets related to this equipment would be:

Accepted Answer

A)  $50,000. 
B)  $45,000. 
C)  $ 0. 
D)  Either $45,000 or $0, depending upon the policy of the organization

Exam 10: Accounting for Private Not-For-Profit Organizations

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:

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:

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?

According to FASB Statement No.116,Appendix D,how are not-for-profit organizations distinguished from a business?

Which of the following would be a contribution increasing permanently restricted net assets?

Conditional pledges should not be recognized as revenue until the conditions have been met.

Contributions to a private not-for-profit may be restricted as to time,purpose or for plant acquisition.

The FASB requires private not-for-profit organizations to report net assets (the excess of assets over liabilities)separated by unrestricted,temporarily restricted and permanently restricted.

Supporting activities as classified in the Statement of Activities,normally include

Which of the following statements is false with respect to private not-for-profit organizations?

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?

Which of the following is true regarding the Statement of Cash Flows for nongovernmental,not-for-profit organizations?

Investments by private not-for-profit organizations in equity securities should be carried at

Private not-for-profit organizations record depreciation expense.

Net Assets must be presented separately in the Statement of Financial Position for the three classes (unrestricted,temporarily restricted,and permanently restricted).

Examples of voluntary health and welfare organizations would include the Girl Scouts and the American Heart Association.

The institution's governing board decided to create an endowment from contributed funds,this is called a(n) ________ and the funds are unrestricted.

Which of the following financial statements are required for voluntary health and welfare organizations?