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Exam 13: Accounting for Not-For-Profit Organizations

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Question 1

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Under FASB standards how would a not-for-profit organization recognize a conditional pledge?

A) It would debit Pledges Receivable and credit Contributions-Temporarily Restricted.
B) It would debit Pledges Receivable and credit Deferred Contributions.
C) It would debit Conditional Pledges Receivable and Credit Deferred Contributions.
D) It would not recognize the conditional pledge until pledge conditions are substantially met.

E) A) and D)
F) C) and D)

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Question 2

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The FASB requires not-for-profits to prepare a statement of cash flows.

A) True
B) False

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Question 3

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Donor-imposed restrictions must be clearly reflected in financial statements of not-for-profit organizations reporting under the FASB.

According to the FASB,how should unrealized gains on the investment portfolio of a not-for-profit organization be recognized?

A not-for-profit organization incurred $10,000 in management and general expenses in the current fiscal year.In the organization's statement of activities prepared in conformity with FASB standards,the $10,000 would be reported as:

A voluntary health and welfare organization (VHWO)is a type of not-for-profit that depends primarily on charges for services as a source of revenue,rather than on contributions from the public at large.

The following are key terms in Chapter 13 that relate to accounting for not-for-profit organizations: A.Nonexchange transactions B.Temporarily restricted net assets C.Collections D.Variance power E.Exchange transactions F.Board-designated net assets G.Permanently restricted net assets H.Promise to give For each of the following definitions,indicate the key term from the list above that best matches by placing the appropriate letter in the blank space next to the definition.

Under FASB standards,which of the following contributions would not have to be reported as an asset on the statement of financial position of a not-for-profit organization?

Which of the following statements is correct regarding reporting of special events and related direct costs under current FASB standards?

The FASB requires that investments initially be recorded by a not-for-profit organization at cost,or in the case of donated investments at fair value as of the date of the donation.

Under current accounting and reporting standards nongovernmental,not-for-profit organizations must utilize the fund accounting structure set forth in the AICPA Audit and Accounting Guide Not-for-Profit Entities.

A local CPA volunteered his time to help install and test new computer accounting system software for an after-school development organization that serves disadvantaged children. If the services had not been donated the organization would have had to hire a consultant to install the system.In accordance with the FASB Codification,the value of the CPA's time devoted to helping the organization should be recorded as:

Under the FASB Codification the costs incurred for a joint activity may be allocated between fund-raising expenses and program expenses if the criteria of purpose,audience,and content are met.

Would a not-for-profit library that receives the majority of its resources from a specific tax levy on local citizens remitted to the city follow the same financial reporting principles as would a library that operates without a dedicated tax and instead relies on contributions from individuals and grants from foundations and governments? Explain.

Distinguish between "support" and "revenues from exchange transactions."

Museums and religious organizations reporting in accordance with FASB must capitalize and report assets such as works of art,historical treasures,and similar collectible items if they are held for public inspection.

Explain the purpose of FASB ASC 958-720-45 on joint-cost accounting as it relates to reporting fund-raising and program expenses of a not-for-profit organization.How is this standard applied?

Term endowments and quasi-endowments are classified as temporarily restricted net assets according to the FASB.

In accordance with FASB standards,securities donated to a not-for-profit organization should be recorded at the:

The FASB requires that support from special events,if related to the central ongoing and major activities of the organization,and related direct costs,be reported at their gross amounts in the statement of activities.