Not For Profit Accounting Paper 5

1

Rose Smith made a cash donation for a specific purpose in December 2012, to United Ways, a nongovernmental, nonprofit organization that raises contributions for others. Assume United Ways was (1) not granted variance power by Rose Smith over her donation and (2) the beneficiaries of the donation are not financially related to United Ways. How should United Ways account for Rose’s cash donation?






2

World-Wide Helpers Foundation, a nonprofit entity, received a cash donation in 2012 from Herold Smith. World-Wide Helpers Foundation is controlled by World-Wide Helpers, a nonprofit entity that raises resources for others. The resources of World-Wide Helpers Foundation are used for the benefit of World-Wide Helpers. How should World-Wide Helpers Foundation account for the cash donation?






3

A cash donation from a resource provider should be reported as contribution revenue by a recipient organization when which of the following exists?






4

Peter Smith made a cash donation in January 2012, to World-Wide Helpers, a nongovernmental, nonprofit organization that raises contributions for others. Peter specified the beneficiaries for his contribution, but provided variance power to World-Wide Helpers to use the donation for beneficiaries not specified by Peter. How should World-Wide Helpers account for Peter’s cash donation?






5

The Taft family lost its home in a flood in October 2012. In November of 2012, Mary Wilson donated cash to Goodbody Benevolent Society to purchase furniture for the Taft family. In December 2012, Goodbody purchased this furniture for the Taft family. How should Goodbody report the receipt of the cash donation in its 2012 financial statements?






6

An arrangement where a donor makes an initial gift to a trust or directly to the not-for-profit organization, in which the not-for-profit organization has a beneficial interest but is not the sole beneficiary is known as a






7

Under which of the following cases should joint costs be allocated between fund-raising and the appropriate program or management and general function?






8

Which of the following are considered to be capital additions in the statement of activity of a not-for-profit organization?
I. Nonexpendable gifts, grants, and bequests restricted by donors to endowment funds.
II. Legally restricted investment income on investments held in endowment funds that must be added to the principal.
III. Donor-restricted gifts for program or supporting services.






9

Depending on the extent of discretion that the not-for-profit recipient has over the use or subsequent disposition of the assets, gifts in kind may be treated as
Agency transactions
Contributions






10

A not-for-profit organization receives an asset for which they have little or no discretion over the use of the asset. The organization should report the asset as a(n)






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