Question
1) Students and faculty volunteer their time to the activities of Beta Alpha Psi. The fair value of their services is $25,000. How is this
1) Students and faculty volunteer their time to the activities of Beta Alpha Psi. The fair value of their services is $25,000.
How is this information reported Beta Alpha Psi's statement of activities?
A.$25,000 increase in net assets with donor restrictions.
B.$25,000 increase in net assets without donor restrictions.
C.Increase in expenses and increase in contributions of $25,000; no net effect on net assets.
D.Not reported in the statement of activities.
2) The line labeled "net assets released from use restrictions," reported on a private NFP organization's operating statement, represents
A.Resources used to pay the principal of loans.
B.Donor-restricted resources used to finance the organization's programs during the year, but not used for administrative expenses.
C.Donor-restricted resources used to acquire capital assets, but not for program or administrative expenses.
D.Donor-restricted resources used according to the donor's wishes during the year.
3) Which one of the following isleast likelyto be an objective of NFP reporting?
A.Information should be useful in assessing whether the organization is in compliance with relevant laws.
B.Information should be useful for making resource allocation decisions.
C.Information should useful in evaluating services provided.
D.Information should be useful in assessing management performance.
4) At the beginning of 2020, a donor makes a documented promise to contribute $100,000 to a private NFP organization at the end of 2021. The donor says the contribution may be used for any purpose and follows through on his promise at the end of 2021. The appropriate interest rate is 4%. The promise is considered fully collectible.
Now assume the donor requires that the contribution be used for a specific program. The $100,000 collected at the end of 2021 is used for program activities in 2022.
How does this change the reporting for this contribution in 2020 and 2021?
A.The contribution is now a use restriction, and contribution revenue at the beginning of 2020 therefore is reported at its gross amount instead of at present value, as an increase in net assets with donor restrictions. Collection of the promise in 2021 reduces the receivable already on the books, but net assets are not released until 2022.
B.The reporting is the same; time and use restrictions are reported the same way.
C.No difference in 2020, but an entry to record net assets released from restrictions is not made when the donation is made at the end of 2021.
D.Promises of contributions that are donor-restricted to specific uses are not recorded until the contribution is received. The entry at the end of 2021 increases net assets with donor restrictions.
5) An increase in the present value of reported promises of contributions:
A.Increases net assets with donor restrictions
B.Increases nonoperating gains
C.Increases net assets without donor restrictions
D.Is not reported
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