Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Which of the following is a general rule established by the FASB regarding contributions received by a nonprofit in the form of investments? a. They

Which of the following is a general rule established by the FASB regarding contributions received by a nonprofit in the form of investments?

a. They must be recorded either in a restricted fund or in an unrestricted fund.

b. They must be reported in an endowment fund.

c. They must be reported either as support without donor restrictions or support with donor restrictions

. d. They must be recorded at the amount paid by the donor for the investment.

If a donor provides that interest earned on an endowment be used to finance a particular program, how should the interest revenue be classified?

Select one:

a. As endowment income

b. As an increase in the fair value of the endowment

c. As revenues with donor restrictions

d. As revenues without donor restrictions

How should depreciation on buildings be reported in a nonprofits financial statements?

Select one:

a. Nonprofits have the option of reporting or not reporting depreciation on buildings.

b. As a reclassification from net assets with donor restrictions to net assets without donor restrictions

c. As an expensea decrease in net assets without donor restrictions

d. As an expensea decrease in net assets with donor restrictions

At the statement of financial position date, the fair value of an investment is greater than the amount at which the investment was initially recorded. What adjustment, if any, is needed?

Select one:

a. No adjustment is needed.

b. The increase should be recorded as a gain in net assets without donor restrictions.

c. The increase should be recorded as a gain in net assets with donor restrictions.

d. The increase should be recorded as a gain in the same net asset class in which the investment is reported.

The Prevent Cancer Organization incurred several expenses during 2019. Which of the following would not be classified as a program expense?

Select one:

a. Pamphlets mailed to the general public regarding the danger signals of cancer

b. Pamphlets on the relationship of smoking to cancer

c. Salaries of personnel who perform cancer research

d. Postage for announcements of the 2019 Kickoff Dinner

As a result of its annual fundraising program, a nonprofit receives pledges in the amount of $300,000 during December 2018, the last month of its reporting period. Based on its previous history regarding pledges, the nonprofit believes that about $250,000 will be collected in the first 60 days of 2019; $35,000 will trickle in during the rest of 2019; and $15,000 will not be collected at all. How much should the nonprofit report as net contributions receivable on its 2018 financial statements?

Select one:

a. $0

b. $250,000

c. $285,000

d. $300,000

Computer expert J. Leveille donated 60 hours of time to the Boston Museum, a nonprofit. He spent 40 hours designing a web site for the museum and 20 hours selling merchandise at the museum store. Mr. Leveille normally earns $150 an hour when he designs web sites, and the museum normally pays $10 to its salespeople. How much should the museum report as contribution revenue for Mr. Leveilles services?

Select one:

a. $0

b. $200

c. $6,200

d. $6,000

The trustees of a nonprofit decide to designate a portion of its resources for use in a specific research program. How should the designation be reported in the nonprofits financial statements?

Select one:

a. As net assets with restrictions, designated for research, in a note

b. Board designations should not be reported in nonprofit financial statements.

c. As net assets without donor restrictions; the board designation may be shown on the face of the statement of financial position.

d. As net assets with restrictions, either on the face of the statements or in a note

A nonprofit held a fundraising campaign at year-end 2018. It received pledges of $45,000, but it did not receive any cash until the following year. It estimates that 80% of the pledges are collectible. What should the nonprofit report in 2018 based on these pledges?

Select one:

a. The nonprofit should not report any revenue in the year it conducted its fundraising campaign.

b. The nonprofit should report contributions receivable of $40,000 and contributions revenues of $40,000.

c. The nonprofit should disclose the pledges in a note to its financial statements.

d. The nonprofit should report net contributions receivable of $36,000 and contributions revenue of $36,000

If a nonprofit reports net assets with donor restrictions, it is likely:

Select one:

a. The restrictions could have been placed either by donors or through contractual provisions such as bond indentures.

b. The restrictions could have been placed either by donors or by the nonprofits board of directors.

c. The restrictions have been placed by donors

d. The restrictions are temporary.

A contractor built a garage for a nonprofit at no charge. Had the contractor charged the nonprofit for the garage, it would have billed the nonprofit $10,000. The nonprofit should:

Select one:

a. Seek other estimates of the fair value of the garage once it was completed.

b. Thank the contractor and record no asset on its books.

c. Record the garage at its fair value of $10,000 and depreciate the asset over its useful life.

d. Record the garage at its fair value of $10,000 but not depreciate it.

GAAP requires all nonprofits to report their functional expenses in a single location by natural classification:

Select one:

a. In the notes to their financial statements

b. On the face of their statements of activities

c. In a separate financial statement

d. Any one of the above

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Issues In Management Accounting

Authors: David Ashton

2nd Edition

0131892509, 978-0131892507

More Books

Students also viewed these Accounting questions

Question

Define culture in the context of clinical psychology.

Answered: 1 week ago

Question

Variables can have different scopes. Question 1 options: True False

Answered: 1 week ago