Non-For Profit Accounting 1. Choose correct or incorrect sentences. Expense of private non-for-profit organization is reported by function classification. Detailed statement of nature and function is reported in the notes in the financial statements. A. Correct statement Correct statement B. Incorrect statement Incorrect statement C. Incorrect statement Correct statement D. Correct statement Incorrect statement 2. In Private non-for-profit organization, cause of statement of activity reclassifications are as follow, except for : A. Operating activities B. Acquisition of PPE C. Endowment D. Time restriction 3. Choose correct or incorrect statements. Items that is included in the with donor restriction is reclassified by without donor restriction by achievement of purpose or passage of time. In aforementioned case , the amount corresponding to changes in net asset(with) : has no effect, changes in net asset(without) : decrease. If two or more temporary restrictions are imposed on a contribution, the effect of the expiration of those restrictions shall be recognized in the period in which the last remaining restriction has expired. A. Correct statement Incorrect statement Incorrect statement B. Incorrect statement Incorrect statement Incorrect statement C. Incorrect statement Correct statement Correct statement D. Correct statement Incorrect statement Correct statement 4. Choose correct or incorrect statements. Governmental statement of cash flow start calculation from operating income. Non-for-profit organizational statement of cash flow start calculation from changes in total net asset. A. Incorrect statement Correct statement B. Incorrect statement Incorrect statement C. Correct statement Correct statement D. Correct statement Incorrect statement 5. In non-for-profit organizational statement of cash flow, without, operating, and time restriction (short-term) items are reported in CFO. PPE, endowment, time restriction (long-term) items are reported in CFF. A. Incorrect statement Correct statement B. Correct statement Correct statement C. Incorrect statement Incorrect statement D. Correct statement Incorrect statement 6. Choose correct or incorrect statements. An unconditional promise to give (pledge) have to be reported in with donor restriction column regardless of collection timing. (ex. collection of current year vs. collection of next year) In aforementioned case , if cash is collected, journal entries are as follows : Cash Contribution receivable Contribution_without Contribution_with A. Incorrect statement Incorrect statement B. Correct statement Correct statement C. Incorrect statement Correct statement D. Correct statement Incorrect statement 7. Choose correct or incorrect statements. In statement of activity of private NFPO, if with donor restriction item is reclassified into without donor restriction, corresponding disclosure to notes is required. Contribution is an unconditional transfer of cash or other assets to an entity or a settlement or cancellation of its liabilities in a voluntary non-reciprocal transfer by another entity acting other than as an owner. A. Incorrect statement Incorrect statement B. Correct statement Correct statement C. Incorrect statement Correct statement D. Correct statement Incorrect statement 8. Choose correct or incorrect statements. In non-for-profit organization, Reporting format of expense of the financial statements is only functional classification. In addition, natural classification is reported in the notes to the financial statements. A. Incorrect statement Incorrect statement B. Correct statement Correct statement C. Incorrect statement Correct statement D. Correct statement Incorrect statement 9. Choose correct or incorrect statements. In non-for-profit organization, depreciation is included in total expenses. On the contrary, Grants to other organizations is not. A. Incorrect statement Incorrect statement B. Correct statement Correct statement C. Incorrect statement Correct statement D. Correct statement Incorrect statement 10. A donor donated $10,000 to non-governmental, non-for-profit organization with no stipulation. If board of trustee of the non-for-profit organization stipulate this contribution at specified use, this contribution should be classified as ( with / without) donor restriction. A. B. C. both D. Neither 11. A donor donated $10,000 to nongovernmental, non-for-profit organization and stipulated that this contribution should be used to general operating expense in current year. In this case, this contribution should be classified to the ( with / without) donor restriction. A. B. C. both D. Neither 12. Choose correct or incorrect statements. In non-for-profit organization, Program service is similar to CGS of the enterprise accounting. The other total expenses is included in supporting activity. A. Incorrect statement Incorrect statement B. Correct statement Correct statement C. Incorrect statement Correct statement D. Correct statement Incorrect statement 13. Cash received with donor-imposed restriction limiting its use to long term purposes, such as construction of a new building, is displayed as a ( ) activity on the statement of cash flows of a not-for-profit organization. A. investing B. operating C. financing D. supporting 14. A non-governmental non-for-profit organization borrowed money of $5,000 to a financial institution. The purpose of the borrowing was to purchase PPE. In this case, when organization prepare statement of cash flow, cash inflow and out flow is reported to the ( ) activity. A. investing B. operating C. financing D. supporting 15. AIFA university's asset : $15,000,000, liability : $9,000,000(including deferred revenue $500,000). As a result, AIFA's net assets balance is : $6,500,000 A. $6,000,000 B. $9,000,000 C. $15,000,000 D. $6,500,000 16. Child Care Centers, Inc., a not-for-profit organization, receives revenue from various sources during the year to support its day care centers. The following cash amounts were received during Year 1. $2,000 restricted by the donor to be used for meals for the children. $1,500 received for subscriptions to a monthly child care magazine with a fair market value to subscribers of $1,000. $10,000 to be used only upon completion of a new playroom that was 75 percent complete at December 31, Year 1. What amount should Child Care Centers record as contribution revenue in its Year 1 statement of activities? A. $2,000 B. $2,500 C. $10,000 D. $11,000 17. Oz, a non-governmental not-for-profit organization, received $50,000 from Ame Company to sponsor a play given by Oz at the local theater. Oz gave Ame 25 tickets, which generally cost $100 each. Ame received no other benefits. What amount of ticket sales revenue should Oz record? A. $0 B. $2,500 C. $47,500 D. $50,000 18. The Jackson Foundation, a not-for-profit organization, received contributions in Year 1 as follows: Cash contributions of $500,000 without donor restrictions. Cash contributions of $200,000 with donor restrictions with specific requirements relative to the acquisition of property. Jackson's statement of cash flows in Year 1 should include which of the following amounts? Operating activities Investing activities Financing activities A. $700,000 $0 $0 B. $500,000 $200,000 $0 C. $500,000 $0 $200,000 D. $0 $500,000 $200,000 19. A nongovernmental not-for-profit organization borrowed $5,000, which it used to purchase a truck. In which section of the organization's statement of cash flows should the transaction be reported? A. In cash inflow and cash outflow from investing activities. B. In cash inflow and cash outflow from financing activities. C. In cash inflow from financing activities and cash outflow from investing activities. D. In cash inflow from operating activities and cash outflow from investing activities. 20. State University received two contributions during the year that must be used to provide scholarships. Contribution A for $10,000 was collected during the year, and $8,000 was spent on scholarships. Contribution B is a pledge for $30,000 to be received next fiscal year. What amount of contribution revenue should the university report in its statement of activities? A. $8,000 B. $10,000 C. $38,000 D. $40,000