1. Expenses incurred by not-for-profit organizations should be reported as A. Decreases in one of the three categories of net assets. B. Decreases in net assets with donor restrictions. C. Decreases in net assets without donor restrictions. D. Decreases in net assets with partial restrictions. 2. Restricted gifts to not-for-profit organizations A. Must always be shown as an increase in net assets with donor restrictions. B. Must always be shown as an increase in net assets without donor restrictions. C. May be shown as an increase in unrestricted net assets if the restriction is met in the same period. D. May be shown as an increase in unrestricted net assets at the discretion of management. 3. The characteristic that most clearly distinguishes a contribution from an exchange transaction is which of the following? A. Cash is always received. B. An exchange transaction is a nonreciprocal transfer of assets. C. An exchange transaction is a reciprocal transfer of resources. D. There are always restrictions attached to use of the assets received as a result of a contribution 4. During the annual fundraising drive, the Cancer Society raised $900,000 in pledges of financial support for their general operations. By the fiscal year-end, the Society had collected $600,000 of the pledges. The Society estimates that 10% of the remaining pledges will be uncollectible. The NET amount of revenue the Society should recognize during the current year from this pledge drive is A. $900,000. B. $870,000. C. $810,000 D. $600,000 Use the following information to answer Questions 5 and 6: United Charities' annual fund raising drive in 2018 raised pledges of $1,200,000 of which $800,000 were collected in 2018 and $200,000 were collected in 2019. United Charities estimates $150,000 of the remaining pledges will never be collected. 5. The increase in net assets without donor restrictions in 2018 as a result of the fund raising drive is A. $1,200,000 B. $1,050,000. C. $800,000. D. $250,000 6. In 2019, the dollar change in temporarily restricted net assets is A. $0 B. $200,000 increase. C. $200,000 decrease. D. $1,000,000 decrease. 7. During the current year a not-for-profit entity received a contribution of $100,000 to use for scholarships. In the current year the entity had already budgeted $400,000 for scholarships. During the current year, the entity disbursed $350,000 for scholarships. The amount the entity can consider as 'released from restriction in the current year is A. $0. B. $100,000 C. $350,000 D. $400,000 8. Our Lady of Sorrows Church, a not-for-profit entity, operates a school in connection with the Church. This year members of the Church decided to construct a new wing on the school with six classrooms. The Church hired an architect and a construction supervisor. The bulk of the labor for construction was donated by Church members who were willing workers but not necessarily skilled carpenters. Materials for the construction cost $600,000 and the paid labor was $200,000. The fair value of the completed building is $2 million. When the building is completed what should be the balance in the asset account "Building" and the account "Contribution Revenue"? A. Building $800,000; Contribution Revenue $0. B. Building $800,000; Contribution Revenue $1,200,000. C. Building $2 million: Contribution Revenue $1,200,000. D. Building $2 million; Contribution Revenue SO. 9. The Nature Conservatory, a not-for-profit entity, engaged in a fundraising drive to raise money to buy land to provide a habitat for endangered species. A donor pledged $1 million to the project provided that the Nature Conservatory was able to raise an additional $1.5 million from other sources. What entry should the Nature Conservatory make at the time of the $1 million pledge? A. Debit contributions receivable $1 million; Credit contributions-no donor restrictions $1 million. B. Debit contributions receivable $1 million; Credit contributions $1 million. C. Debit contributions receivable $1 million; Credit contributions-without donor restrictions S1 million. D. No entry is made at the time of the pledge. 10. A donor pledges $100,000 to the Shakespeare Foundation to be used only to support the summer Shakespeare Theater an event that has been held every summer for 38 years. This is an example of a A. Conditional Contribution. B. Contributions with donor restrictions. C. Contributions with no donor restrictions. D. A decrease in net assets