Not For Profit Accounting MCQs

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The statement of cash flows for a private not-for-profit hospital should report cash flows according to which of the following classifications? I. ...

I, II, and III.
II and III.
I only.
I and III.

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Pharm, a nongovernmental not-for-profit organization, is preparing its year-end financial statements. Which of the following statements is required?...

Statement of changes in financial position.
Statement of cash flows.
Statement of changes in fund balance.
Statement of revenue, expenses and changes in fund balance.

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Stanton College, a not-for-profit organization, received a building with no donor stipulations as to its use. Stanton does not have an accounting po...

I only.
II only.
III only.
II or III.

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Sea Lion Park, a private not-for-profit zoological society, received contributions restricted for research totaling $50,000 in 2011. None of the con...

$15,000 increase in temporarily restricted net assets.
$35,000 decrease in temporarily restricted net assets.
$35,000 increase in unrestricted net assets.
$35,000 decrease in unrestricted net assets.

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Clara Hospital, a private not-for-profit hospital, earned $250,000 of gift shop revenues and spent $50,000 on research during the year ended Decembe...

$300,000
$200,000
$250,000
$275,000

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Which of the following transactions of a private not-forprofit voluntary health and welfare organization would increase temporarily restricted net a...

Both I and II.
Neither I nor II.
I only.
II only.

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Catherine College, a private not-for-profit college, received the following contributions during 2012: I. $5,000,000 from alumni for construction of...

$ 50,000
$5,050,000
$5,000,000
$6,050,000

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On December 31, 2012, Hope Haven, a private not-forprofit voluntary health and welfare organization, received a pledge from a donor who stipulated t...

Unrestricted revenues of $5,000.
Temporarily restricted revenues of $4,465.
Unrestricted revenues of $4,465.
Temporarily restricted revenues of $4,212.

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For Guiding Light, a nongovernmental nonprofit religious organization, net assets that can be expended in accordance with the wishes of the governin...

I only.
Both I and II.
I, II, and III.
Either I or II.

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United Hope, a private not-for-profit voluntary health and welfare organization, received the following contributions in 2012: I. $500 from donors ...

I only.
Both I and II.
II only.
Neither I nor II.

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A statement of financial position (balance sheet), which reports unrestricted, temporarily restricted, and permanently restricted net assets, is req...

Both I and II.
I only.
Neither I nor II.
II only.

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A storm broke glass windows in the building of Lea Meditators, a not-for-profit religious organization. A member of Lea’s congregation, a professi...

Not be reported.
Be reported by note disclosure only.
Be reported as an increase in both expenses and contributions.
Be reported as an increase in both net assets and contributions.

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Financial statements of not-for-profit organizations focus on

Basic information for the organization as a whole.
Standardization of funds nomenclature.
Inherent differences of not-for-profit organizations that impact reporting presentations.
Distinctions between current fund and noncurrent fund presentations.

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On December 30, 2012, Leigh Museum, a not-for-profit organization, received a $7,000,000 donation of Day Co. shares with donor-stipulated requiremen...

$0
$2,000,000
$5,000,000
$7,000,000

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The Jones family lost its home in a fire. On December 25, 2012, a philanthropist sent money to the Amer Benevolent Society, a not-for-profit organiz...

As an unrestricted contribution.
As a temporarily restricted contribution.
As a permanently restricted contribution.
As a liability.

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If the Pel Museum, a not-for-profit organization, received a contribution of historical artifacts, it need not recognize the contribution if the art...

Support general museum activities.
Acquire other items for collections.
Repair existing collections.
Purchase buildings to house collections.

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A large not-for-profit organization’s statement of activities should report the net change for net assets that are Unrestricted Permanently restri...

Yes Yes
Yes No
No No
No Yes

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Which of the following classifications is required for reporting of expenses by all not-for-profit organizations?

Natural classification in the statement of activities or notes to the financial statements.
Functional classification in the statement of activities or notes to the financial statements.
Functional classification in the statement of activities and natural classification in a matrix format in a separate statement.
Functional classification in the statement of activities and natural classification in the notes to the financial statements.

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Rosary Botanical Gardens, a private not-for-profit organization, established a $500,000 quasi endowment on September 1, 2012. On the garden’s stat...

Temporarily restricted net assets.
Unrestricted net assets.
Permanently restricted net assets.
Either temporarily or permanently restricted net assets, depending on the expected term of the quasi endowment.

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During 2011, an alumnus of Smith College, a private notfor- profit college, transferred $100,000 to the college with the stipulation that it be spen...

Liabilities.
Unrestricted net assets.
Temporarily restricted net assets.
Permanently restricted net assets.

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During the year ended December 31, 2012, a not-for-profit performing arts entity received the following donor-restricted contribution and investment...

$106,000 from operating activities.
$106,000 from financing activities.
$6,000 from operating activities and an increase of $100,000 from financing activities.
$100,000 from operating activities and an increase of $6,000 from financing activities.

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Which of the following private, nonprofit entities is required to report expenses both by function and by natural classification?

Hospitals.
Colleges and universities.
Voluntary health and welfare organizations.
Performing arts organizations.

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On December 5, 2012, Jones Heating and Air Conditioning Service repaired the heating system in the building occupied by Good Hope, a private not-for...

Only in the notes to the financial statements.
No disclosure is required either in the financial statements or in the notes.
As an increase in unrestricted revenues and as an increase in expenses on the statements of activities.
As an increase in temporarily restricted net assets on the statement of activities.

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During the year ended December 31, 2012, the James Community Foundation, a private not-for-profit organization, received the following contributed s...

Both I and II.
Neither I nor II.
II only.
I only.

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Child Care Centers, Inc., a not-for-profit organization, receives revenue from various sources during the year to support its day care centers. The ...

$ 2,000
$ 2,500
$10,000
$11,000

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On December 20, 2012, United Appeal, a private not-forprofit voluntary health and welfare organization, received a donation of computer equipment va...

As an increase in temporarily restricted net assets.
Only in the notes to the financial statements.
As an increase in unrestricted net assets.
As either an increase in temporarily restricted net assets or as an increase in unrestricted net assets.

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On December 30, 2012, the Board of Trustees of Henry Museum, a private not-for-profit organization, designated $4,000,000 of unrestricted net assets...

No effect Increase
Decrease Increase
Decrease No effect
No effect No effect

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For a private, not-for-profit organization, when is a donor’s conditional promise to give considered to be unconditional?

When the condition is partially met.
When the possibility that the condition will not be met is remote.
When the conditional promise is made.
When cash or other assets promised are received.

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A not-for-profit organization receives $150 from a donor. The donor receives two tickets to a theater show and an acknowledgment in the theater prog...

$0
$ 50
$100
$150

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On November 30, 2011, Justin Barlow, an alumnus of Murry School, a private, not-for-profit high school, contributed $15,000, with the stipulation th...

Increase Decrease
No effect Decrease
Increase No effect
No effect No effect

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A private not-for-profit voluntary health and welfare organization received a cash donation in 2009 that contained a donor-imposed restriction that ...

Increase in temporarily restricted net assets.
Reclassification that decreased temporarily restricted net assets.
Increase in unrestricted net assets.
Expense that decreased temporarily restricted net assets.

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In the financial statements of not-for-profit organizations, reporting re-classifications are caused by which of the following? I. Expiration of don...

I only.
Both I and II.
II only.
Neither I nor II

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Which of the following transactions would result in an increase in unrestricted net assets for the year ended December 31, 2012? I. A private, not-...

Both I and II.
I only.
II only.
Neither I nor II.

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Benevolent Society, a private not-for-profit organization, should recognize contributed services on its statement of activities if which of the foll...

Both I and II.
Neither I nor II.
I only.
Either I or II.

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During 2012, Margaret Billingsley, a prominent art collector, donated several items in her collection to the Darrwin Museum, a private, not-for-prof...

Temporarily restricted net assets increased.
Reclassifications caused a simultaneous increase in permanently restricted net assets and a decrease in temporarily restricted net assets.
There was no effect on any class of Darrwin’s net assets.
Permanently restricted net assets increased.

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Which of the following transactions or events would cause an increase in unrestricted net assets for the year ended December 31, 2012? I. A private...

II only.
I only.
Neither I nor II.
Both I and II.

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How should a private not-for-profit hospital report its investments in debt securities that are classified as current assets and noncurrent assets o...

Fair value Amortized cost
Amortized cost Fair value
Fair value Fair value
Amortized cost Amortized cost

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Mary Egbart promised Columbus College, a private, notfor- profit college, that she would provide 80% of the funds needed to construct a new performi...

Be reported as an increase in permanently restricted net assets on the statement of activities.
Not be reported on the statement of activities.
Be reported as an increase in deferred support on the statement of financial position.
Be reported as an increase in temporarily restricted net assets on the statement of activities.

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The governing board of Crestfallen, a private not-for-profit voluntary health and welfare organization, acquired equity securities of BMZ Company at...

$8,000 in unrestricted net assets.
$8,000 in temporarily restricted net assets.
$1,000 in unrestricted net assets.
$7,000 in unrestricted net assets.

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Jazz Planners, a private not-for-profit performing arts organization, has donor-restricted permanent endowment funds which include investments in eq...

Fair value Fair value
Fair value Use equity method
Lower of cost or market Fair value
Fair value Lower of cost or market

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Rose Smith made a cash donation for a specific purpose in December 2012, to United Ways, a nongovernmental, nonprofit organization that raises contr...

As an increase in contribution revenue.
As an increase in liabilities.
As either an increase in contribution revenue or liabilities.
As neither an increase in contribution revenue nor liabilities.

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World-Wide Helpers Foundation, a nonprofit entity, received a cash donation in 2012 from Herold Smith. World-Wide Helpers Foundation is controlled b...

As an increase in contribution revenues.
As an increase in liabilities.
As either an increase in contribution revenue or liabilities.
As neither an increase in contribution revenue or liabilities.

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

The recipient organization and beneficiary are not financially interrelated.
The resource provider does not allow the recipient organization to use the donation for beneficiaries other than those specified by the resource provider.
The resource provider does not grant variance power to the recipient organization to redirect the donation to other beneficiaries.
The resource provider grants variance power to the recipient organization to redirect the donation to other beneficiaries.

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Peter Smith made a cash donation in January 2012, to World-Wide Helpers, a nongovernmental, nonprofit organization that raises contributions for oth...

As an increase in contribution revenue.
As an increase in liabilities.
As either an increase in contribution revenue or liabilities.
As neither an increase in contribution revenue nor liabilities.

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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 f...

As an unrestricted contribution.
As a temporarily restricted contribution.
As a liability.
As either a liability or as a temporarily restricted contribution.

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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 organizati...

Donor-imposed condition.
Donor-imposed restriction.
Share-the-wealth agreement.
Split-interest agreement.

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

An appeal for funds accompanied by a statement of the mission of the not-for-profit entity.
An appeal for funds accompanied by a brochure explaining why funds are needed and how they will be used.
An organization seeks the involvement of the public in the attainment of their missions by telling people what they should do about particular issues in addition to fund-raising appeals.
An appeal for funds and education materials sent to a person based on his/her presumed ability to provide financial support.

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Which of the following are considered to be capital additions in the statement of activity of a not-for-profit organization? I. Nonexpendable gifts,...

I, II, and III.
I and III only.
I and II only.
III only.

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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 ...

No No
No Yes
Yes Yes
Yes No

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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 repor...

Contribution.
Agency transaction.
Exchange.
Conditional transfer.

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Elizabeth Hospital, a nonprofit hospital affiliated with a religious group, should prepare which of the following financial statements? Statement o...

Yes No
No Yes
Yes Yes
No No

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For private sector health care organizations, which of the following is included in patient service revenue?

Contractual adjustments.
Charity care.
Significant revenue under capitation agreements (premium revenue).
Unrestricted contributions.

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Which of the following is not covered by the AICPA Audit and Accounting Guide, Health Care Organizations?

Nursing homes.
Home health agencies.
Hospitals.
Voluntary health and welfare organizations.

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Which of the following can be included in the performance indicator on the statement of operations for private sector health care organizations?

Extraordinary items.
Premium revenue from capitation agreements.
Equity transfers.
Contributions of long-lived assets.

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If private not-for-profit health care entities do not use this expense classification on the operating statement, they must provide it in the notes....

Natural.
Character.
Functional.
Object.

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When functional classifications are used by private sector health care organizations, they should be based on

Net present value.
Full cost allocations.
Percentage allocations.
Resale value.

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Which of the following would be acceptable as a performance indicator on a private sector health care entity’s statement of operations? a. b. c. ...

Increase in unrestricted net assets.
Net income.
Increase in net assets.
Excess of revenues over expenses.

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How is charity care accounted for on the financial statements of a not-for-profit private sector health care organization?

As patient service revenue.
As bad debt expense.
As a separate component of revenue.
Not included on the financial statements.

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How are nonrefundable advance fees representing payments for future services to be accounted for by nonprofit continuing care retirement communities...

As revenue.
As a liability.
As other financing sources.
In a trust fund.

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Kash Hospital, a private sector, not-for-profit organization, has gross patient service revenues of $750,000, charity care of $75,000, amounts disal...

$687,000
$722,000
$785,000
$797,000

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James Hospital, a nonprofit hospital affiliated with a private university, provided $200,000 of charity care for patients during the year ended Dece...

As net patient service revenue of $200,000 on the statement of operations.
As net patient service revenue of $200,000 and as an operating expense of $200,000 on the statement of operations.
As accounts receivable of $200,000 on the balance sheet at December 31, 2012
Only in the notes to the financial statements for 2012.

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Swathmore Hospital, a nonprofit hospital affiliated with Swathmore University, received the following cash contributions from donors during the year...

$ 50,000
$300,000
$250,000
$0

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The governing board of Smithson Hospital, a nonprofit hospital affiliated with a religious organization, acquired 100 BMI Company bonds for $103,000...

$0
$3,000
$2,000
$5,000

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On the statement of operations for a nonprofit, nongovernmental hospital, which of the items below is included in the amount reported for “revenue...

I only.
II only.
Both I and II.
Neither I nor II.

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Tucker Hospital, a nonprofit hospital affiliated with Tucker University, received a donation of medical supplies during the year ended December 31, ...

The donation should be included in both revenue and operating expenses in the amount of $10,000.
The donation should be excluded from the statement of operations.
The donation should be included in both revenue and operating expenses in the amount of $15,000.
The donation should be included in revenue in the amount of $15,000 and in operating expenses in the amount of $10,000.

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Which of the following financial statements of a private, nonprofit hospital reports the changes in unrestricted, temporarily restricted, and perman...

Yes Yes
Yes No
No Yes
No No

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Unrealized gains on investments which are permanently restricted as to use by donors are reported by a private, nonprofit hospital on the

Statement of operations.
Statement of cash flows.
Statement of changes in net assets.
Statement of operations and statement of cash flows.

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The statement of operations for a private, nonprofit hospital should include a performance indicator that indicates the results of operations for a ...

I only
Both I and II.
II only.
Neither I nor II.

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A statement of functional expenses is required for which one of the following private nonprofit organizations?

Colleges.
Hospitals.
Voluntary health and welfare organizations.
Performing arts organizations.

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The statement of financial position (balance sheet) for Founders Library, a private nonprofit organization, should report separate dollar amounts fo...

Unrestricted and permanently restricted.
Temporarily restricted and permanently restricted.
Unrestricted and temporarily restricted.
Unrestricted, temporarily restricted, and permanently restricted.

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Kerry College, a private not-for-profit college, received $25,000 from Ms. Mary Smith on April 30, 2012. Ms. Smith stipulated that her contribution ...

Temporarily restricted revenues on the statement of activities.
Unrestricted revenue on the statement of activities.
Temporarily restricted deferred revenue on the statement of activities.
An increase in fund balance on the statement of financial position.

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Good Hope, a private not-for-profit voluntary health and welfare organization, received a cash donation of $500,000 from Mr. Charles Peobody on Nove...

Statement of activities as unrestricted revenue.
Statement of financial position as temporarily restricted deferred revenue.
Statement of financial position as unrestricted deferred revenue.
Statement of activities as temporarily restricted revenue.

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On the statement of activities for a private not-for-profit performing arts center, expenses should be deducted from I. Unrestricted revenues. II. ...

I, II, and III.
Both I and II.
I only.
II only.

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Albert University, a private not-for-profit university, had the following cash inflows during the year ended June 30, 2012: I. $500,000 from student...

$900,000
$400,000
$800,000
$600,000

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Gamma Pi, a private nonprofit fraternal organization, should prepare a statement of financial position and which of the following financial statemen...

I, II, and III.
III only
II and III.
I and III.

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Save the Planet, a private nonprofit research organization, received a $500,000 contribution from Ms. Susan Clark. Ms. Clark stipulated that her don...

Statement of activities as unrestricted revenue.
Statement of activities as deferred revenue.
Statement of activities as temporarily restricted revenue.
Statement of financial position as deferred revenue.

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United Ways, a private not-for-profit voluntary health and welfare organization, received a contribution of $10,000 from a donor in 2011. The donor ...

Statement of financial position as deferred revenue.
Statement of activities as unrestricted revenue.
Statement of financial position as an increase in fund balance.
Statement of activities as temporarily restricted revenue.

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The statement of cash flows for a private not-for-profit hospital should report cash flows according to which of the following classifications? I. ...

I, II, and III.
II and III.
I only.
I and III.

?

Pharm, a nongovernmental not-for-profit organization, is preparing its year-end financial statements. Which of the following statements is required?...

Statement of changes in financial position.
Statement of cash flows.
Statement of changes in fund balance.
Statement of revenue, expenses and changes in fund balance.

?

Stanton College, a not-for-profit organization, received a building with no donor stipulations as to its use. Stanton does not have an accounting po...

I only
II only.
III only.
II or III.

?

Sea Lion Park, a private not-for-profit zoological society, received contributions restricted for research totaling $50,000 in 2011. None of the con...

$15,000 increase in temporarily restricted net assets.
$35,000 decrease in temporarily restricted net assets.
$35,000 increase in unrestricted net assets.
$35,000 decrease in unrestricted net assets.

?

Clara Hospital, a private not-for-profit hospital, earned $250,000 of gift shop revenues and spent $50,000 on research during the year ended Decembe...

$300,000
$200,000
$250,000
$275,000

?

Which of the following transactions of a private not-forprofit voluntary health and welfare organization would increase temporarily restricted net a...

Both I and II.
Neither I nor II.
I only.
II only.

?

Catherine College, a private not-for-profit college, received the following contributions during 2012: I. $5,000,000 from alumni for construction of...

$ 50,000
$5,050,000
$5,000,000
$6,050,000

?

On December 31, 2012, Hope Haven, a private not-forprofit voluntary health and welfare organization, received a pledge from a donor who stipulated t...

Unrestricted revenues of $5,000.
Temporarily restricted revenues of $4,465.
Unrestricted revenues of $4,465.
Temporarily restricted revenues of $4,212.

?

For Guiding Light, a nongovernmental nonprofit religious organization, net assets that can be expended in accordance with the wishes of the governin...

I only.
Both I and II.
I, II, and III.
Either I or II.

?

United Hope, a private not-for-profit voluntary health and welfare organization, received the following contributions in 2012: I. $500 from donors ...

I only.
Both I and II.
II only.
Neither I nor II.

?

A statement of financial position (balance sheet), which reports unrestricted, temporarily restricted, and permanently restricted net assets, is req...

Both I and II.
I only.
Neither I nor II.
II only.

?

A storm broke glass windows in the building of Lea Meditators, a not-for-profit religious organization. A member of Leaâ€™s congregation, a pro...

Not be reported.
Be reported by note disclosure only.
Be reported as an increase in both expenses and contributions.
Be reported as an increase in both net assets and contributions.

?

Financial statements of not-for-profit organizations focus on

Basic information for the organization as a whole.
Standardization of funds nomenclature.
Inherent differences of not-for-profit organizations that impact reporting presentations.
Distinctions between current fund and noncurrent fund presentations.

?

On December 30, 2012, Leigh Museum, a not-for-profit organization, received a $7,000,000 donation of Day Co. shares with donor-stipulated requiremen...

$0
$2,000,000
$5,000,000
$7,000,000

?

The Jones family lost its home in a fire. On December 25, 2012, a philanthropist sent money to the Amer Benevolent Society, a not-for-profit organiz...

As an unrestricted contribution.
As a temporarily restricted contribution.
As a permanently restricted contribution.
As a liability.

?

If the Pel Museum, a not-for-profit organization, received a contribution of historical artifacts, it need not recognize the contribution if the art...

Support general museum activities.
Acquire other items for collections.
Repair existing collections.
Purchase buildings to house collections.

?

Which of the following classifications is required for reporting of expenses by all not-for-profit organizations?

Natural classification in the statement of activities or notes to the financial statements.
Functional classification in the statement of activities or notes to the financial statements.
Functional classification in the statement of activities and natural classification in a matrix format in a separate statement.
Functional classification in the statement of activities and natural classification in the notes to the financial statements.

?

Rosary Botanical Gardens, a private not-for-profit organization, established a $500,000 quasi endowment on September 1, 2012. On the gardenâ€™s...

Temporarily restricted net assets.
Unrestricted net assets.
Permanently restricted net assets.
Either temporarily or permanently restricted net assets, depending on the expected term of the quasi endowment.

?

During 2011, an alumnus of Smith College, a private notfor- profit college, transferred $100,000 to the college with the stipulation that it be spen...

Liabilities.
Unrestricted net assets.
Temporarily restricted net assets.
Permanently restricted net assets.

?

During the year ended December 31, 2012, a not-for-profit performing arts entity received the following donor-restricted contribution and investment...

$106,000 from operating activities.
$106,000 from financing activities.
$6,000 from operating activities and an increase of $100,000 from financing activities.
$100,000 from operating activities and an increase of $6,000 from financing activities.

?

Which of the following private, nonprofit entities is required to report expenses both by function and by natural classification?

Hospitals.
Colleges and universities.
Voluntary health and welfare organizations.
Performing arts organizations.

?

On December 5, 2012, Jones Heating and Air Conditioning Service repaired the heating system in the building occupied by Good Hope, a private not-for...

Only in the notes to the financial statements.
No disclosure is required either in the financial statements or in the notes.
As an increase in unrestricted revenues and as an increase in expenses on the statements of activities.
As an increase in temporarily restricted net assets on the statement of activities.

?

During the year ended December 31, 2012, the James Community Foundation, a private not-for-profit organization, received the following contributed s...

Both I and II.
Neither I nor II.
II only.
I only.