Select the best answer for each of the following items:

1. Cura Foundation, a voluntary health and welfare organization, supported by contributions from the general public, included the following costs in its statement of functional expenses for the year ended December 31, 2021.

Fund raising .......................    $500,000

Administrative ....................    300,000

Research ..............................    100,000

Cura’s functional expenses for 2021 program services included

(a) $900,000.

(b) $500,000.

(c) $300,000.

(d) $100,000.

2. Community Service Center is a voluntary welfare organization funded by contributions from the general public. During 2020, unrestricted pledges of $900,000 were received, half of which were payable in 2020 with the other half payable in 2021 for use in 2021. It was estimated that 10% of these pledges would be uncollectible. How much should Community report as net contribution revenue for 2020 with respect to the pledges?

(a) $0.

(b) $405,000.

(c) $810,000.

(d) $900,000.

3. Theresa Plato is a social worker on the staff of Community Service Center, a voluntary welfare organization. She earns $30,000 annually for a normal workload of 2,000 hours. During 2020, she contributed an additional 800 hours of her time to Community at no extra charge. How much should Community record in 2020 as contributed service expense?

(a) $12,000.

(b) $6,000.

(c) $1,200.

(d) $0.

4. The basis of accounting used by nonprofit organizations is the

(a) Cash basis.

(b) Modified accrual basis.

(c) Accrual basis.

(d) Modified cash basis.

(AICPA adapted)