1. According to the FASB, net assets with donor restrictions are released from restrictions:

A. At the end of each fiscal year.

B. As assets are spent for the purposes intended by the donor.

C. When funds are returned to the donor.

D. When they are reclassified to permanently restricted net assets.

2. An increase in net assets for a not-for-profit organization that would be labeled exchange revenue rather than support is:

A. A donation.

B. Special events.

C. A pledge.

D. Investment income.

3. Dogs-are-Us, an animal shelter for dogs, contacted a donor, Marie Pedigree, who today promised to donate $10,000 to be used to pay for a dog trainer; she, however prefers to pay in $2,000 installments over the next five years. The first installment will be received at the end of year 1. After applying a discounting factor, the net realizable value of the full donation is $8,750. The journal entry for the pledge would include a:

A. Credit to Contributionswithout donor restrictions, $8,750.

B. Credit to Discount on Contributions Receivable, $1,250.

C. Debit to Cash, $10,000.

D. Debit to Contributions Receivable, $8,750.

4. Centre College, a private liberal arts college in Central Kentucky, charged (billed) tuition and fees of $50,000 based on the registration of students; Centre provided scholarships of $12,000 to the registered students. The entry to bill the tuition and fees and scholarships would include a:

A. Debit to Tuition and Fees, $50,000.

B. Debit to Tuition Discounts and Allowances, $12,000.

C. Credit to Tuition and Fees, $38,000.

D. Credit to Tuition Discounts and Allowances, $14,000.

For 5 and 6: Faith Hospital has over 1,000 beds and performs major surgeries. Faith Hospital billed an insurance provider for a major medical procedure for $30,000.

5. The entry for the billing to the insurance provider would include a:

A. Debit to Contractual Adjustment, $30,000.

B. Debit to Provision for Uncollectible Accounts, $30,000.

C. Credit to Patient Revenue, $30,000.

D. Credit to Contractual Adjustment, $30,000.

6. The insurance provider paid only $24,000, which was the final settlement. The journal entry to record the entry for the contractual adjustment would include a:

A. Debit to Cash, $24,000.

B. Credit to Contractual Adjustment, $6,000.

C. Debit to Contractual Adjustment, $24,000.

D. Credit to Accounts Receivable, $6,000.