1.Which of the following is part of the treatment of multi-year pledges as required by FASB Statement No. 116?

A)At the end of each accounting period, the difference between the balance in the receivable account and the new present value is deducted from the amount of the amount received from the donor which is recorded as income

B)Pledge receivable is recorded for the total amount to be received and revenue is recorded each year as monies are received by the organization.

C)The donation is recorded as a receivable at the present value of the future collections but revenue is not recorded until the pledge is received.

D)At the end of each accounting period, the difference between the balance in the receivable account and the new present value is recorded as contribution revenue and the receivable is increased.

2.Which of the following is not a distinguishing characteristic of a private not-for-profit organization according to FASB Statement No. 116, Appendix D?

A)Contributions of significant amounts of resources from resources providers who do not expect commensurate or proportionate pecuniary return.

B)Upon dissolution of the organization, remaining assets are to be distributed to the original contributors.

C)Operating purposes other than to provide goods or services at a profit.

D)Absence of ownership interests like those of business enterprises.

3.Which of the following statements is not correct with respect to contributions to a private not-for-profit?

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

B)Revenues, including contributions are considered to be unrestricted unless donor-imposed restrictions apply.

C)Contributions to a not-for-profit are recorded at fair market value at the date of receipt.

D)Contributions of assets other than cash to a not-for-profit are recorded at the donors basis.

4.Which of the following is not correct with respect to the reporting of expenses for a private not-for-profit?

A)Expenses can be reported in the unrestricted net asset class or restricted net asset class, as appropriate.

B)Expenses are reported by function in the Statement of Activities or in the notes.

C)The FASB describes functions as either program or supporting.

D)Major program classifications should be shown in the Statement of Activities or in the notes.

5. FASB Statement 124, Accounting for Certain Investments of Not-for-Profit Organizations:

A)Requires that investments accounted for under the equity method be adjusted to fair value at the end of the accounting period.

B)Requires that investments in consolidated subsidiaries be carried at book value.

C)Requires that investments in equity securities be carried at fair value.

D)Requires that investments in debt securities be carried at book value.

6. Contributed services are recognized as revenue for a private not-for-profit when the service:

A)A and B are both required for the service to be recorded as revenue

B)None of the above, contributed services are not recorded as revenue

C)Is related to administration and fund raising activities.

D)Requires specialized skills, is provided by someone possessing those skills, and typically would be purchased if not provided by donation.

7.Which of the following is not true regarding the treatment of multiyear pledges, according to FASB Statement 116?

A) They are recorded at the present value of future collections.

B) They should be reported net of an allowance for estimated uncollectibles.

C) They should be recorded as temporarily restricted.

D) At the end of each accounting period, the difference between the new and previously recorded present value is recorded as interest revenue.

Which of the following are the net asset classes required by the FASB for private not-for-profit organizations?

A) Invested in Capital Assets, Net of Related Debt, Restricted, and Unrestricted.

B) Permanently Restricted, Temporarily Restricted, Unrestricted.

C) Reserved and Unreserved.

D) None of the above.

A donor stipulates the principal of an endowment may not be spent, but does not specify any time or purpose designations on earnings from the endowment. In which of the following categories may Investment Income be reported by Not-for-Profit organization receipent:

Unrestricted net asset

Temporarily restricted net asset

Permanently restricted net asset

A) Only I.

B) Only I & II.

C) Only 1 & III.

D) I, II & III.

What are the financial statements required for all nongovernmental, not-for-profit organizations?

A) Statement of Financial Position, Statement of Activities, Statement of Functional Expenses.

B) Statement of Financial Position, Statement of Activities, Statement of Cash Flows, Statement of Functional Expenses.

C) Statement of Financial Position, Statement of Activities, Statement of Cash Flows.

D) Statement of Financial Position, Statement of Activities, Statement of Functional Expenses.

Which of the following is true regarding accounting and financial reporting for nongovernmental, not-for-profit organizations?

A) All expenses reduce unrestricted net assets.

B) Expenses must be reported by function, either in the statements or in the notes.

C) Both of the above.

D) Neither of the above.

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

The Statement must display totals for net assets separated between the categories of unrestricted, temporarily restricted, and permanently restricted.

The Statement must display assets and liabilities separated between the categories of unrestricted, temporarily restricted, and permanently restricted.

C) Both of the above.

D) Neither of the above.

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

A) FASB requires that the change in net assets be reported, for each of the net asset classes and in total.

B) Information for the Statement of Activities may be presented in two statements: Statement of Revenues, Expenses, and Changes in Unrestricted Net Assets, and Statement of Changes in Net Assets.

C) Both of the above.

D) Neither of the above.

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

A contribution by a donor in the amount of $1,000,000, set aside by the donor as funds not to be expended.

A contribution by a donor in the amount of $1,000,000, set aside by the governing board as funds not to be expended.

C) Both of the above.

D) Neither of the above.

A donor gave $60,000 to a nongovernmental, not-for-profit charity with instructions that the funds be transferred to Sam Smith, an individual who lost his home in a fire. The not-for-profit would:

A) Record the $60,000 cash and credit temporarily restricted revenue.

B) Record the $60,000 cash and credit a liability.

C) Do either (a) or (b), depending upon the policy of the not-for-profit.

D) Not record the transaction.

16. Tuition scholarships for which there is no intention of collection from the student should be classified by a private nonprofit university as A. Revenues and expenditures. B. A reduction of gross revenue to arrive at net revenue. C. Revenues and expenses. D. Any of the above.

Private colleges are required to report net assets in the following categories:

A)Unrestricted, temporarily restricted and board designated

B)Restricted, unrestricted and temporarily restricted

C)Unrestricted and restricted

D)Temporarily restricted , donor restricted and unrestricted

If a college donor were to contribute money with instructions that the funds be invested for a period of time and then released to be used for any purpose, this would be called a(n):

A)Unrestricted endowment

B) Permanent endowment

C) Term endowment

D) Quasi-endowment

Which of the following would not be correct with respect to accounting for colleges and universities under the jurisdiction of the FASB?

A)If both unrestricted and restricted resources are available for a restricted purpose, the GASB requires that the institution recognize the use of unrestricted resources first

B)Accrual accounting is used. Revenues and expenses are reported at gross amounts and gains and losses are reported net.

C)Expenses are reported by function, either in the statements or in the notes

D)If an institution decides not to capitalize museum and other inexhaustible collections, note disclosures are required regarding the collections

Which of the following would not be correct with respect to accounting for colleges and universities under the jurisdiction of the FASB?

A)Contributed services should be recognized only when the services create or enhance nonfinancial assets or require specialized skills, are provided by an individual possessing those skills, and would typically be purchased if not provided by donation

B)Multiyear pledges are recorded as restricted revenue and receivable for the gross amount of the pledge when the pledge is made

C)Depreciation is recorded

D)Investments in stock with determinable fair values and all debt securities are reported at market value

According to the FASB, plant acquired by colleges and universities with either unrestricted or restricted resources are recorded as:

A)restricted

B)unrestricted

C)initially as temporarily restricted and reclassified as unrestricted in accordance with the depreciation schedule

D)either B or C

Which of the following is correct with respect to the recording of charity care for health care organizations?

A)Charity care is recorded as revenue and an adjustment is recorded for the difference between the value of the revenue and expenses incurred in providing health care services.

B)Revenues are not recorded for the value of charity care services provided, but related expenses are included with other expenses on the Statement of Operations

C)The value of foregone charity care revenue is deducted as a charitable contribution

D)Managements policy for providing charity care and the level of charity care provided is an optional disclosure

A private sector, not-for-profit hospital received a pledge of $100,000 in 2011, with no purpose restriction. The pledge card indicated that the funds were to be used in 2012. Cash was turned over to the hospital in 2012. The not-for-profit hospital would recognize contribution revenue in:

A) 2011.

B) 2012.

C) When the funds are expended.

D) Either 2011 or 2012, depending on the policy of the hospital.

Which of the following is true regarding the reporting of expenses by private sector, not-for-profit hospitals?

A) All expenses are considered reductions in unrestricted net assets.

B) Expenses must be reported by natural (i.e. salaries, supplies, etc.) classification in the statements.

C) Both of the above.

D) Neither of the above.

25. Contractual adjustments that arise from differences between the gross charge for patient services and the amount paid by a third party payor are reported as A. Bad debt expense. B. Disclosures in the notes to the financial statements. C. It depends on how material the differences are. D. Deductions from gross patient revenue in arriving at net patient revenue