In the statement of activities of a not-for-profit, depreciation expense should

a. be included as an element of expense.

b. be included as an element of other changes in fund balances.

c. be included as an element of support.

d. not be included.

4. Which of the following is true regarding a not-for-profit organizations reporting of gains and losses on investments purchased with permanently restricted assets?

a. gains and losses can only be reported net of expenses in the statement of activities.

b. unless explicitly restricted by donor or law, gains and losses should be reported in the statement of activities as increases or decreases in unrestricted net assets.

c. gains may not be netted against losses in the statement of activities.

d. unless explicitly restricted by donor or law, gains and losses should be reported in the statement of activities as increases or decreases in permanently restricted net assets.

5. The League, a not-for-profit organization, received the following pledges:

Unrestricted........................................................... $200,000 Restrictedforcapitaladditions ............................................ 150,000

All pledges are legally enforceable; however, the Leagues experience indicates that 10% of all pledges prove to be uncollectible. What amount should the League report as pledges receivable net of any required allowance account?

a. $135,000 b. $180,000 c. $315,000 d. $350,000