Reference no: EM131704260

Question 1. How should expenses be reported in an NFPO's statement of activities?

a. As decreases in the net asset classification in which the revenues were reported

b. As decreases of permanently restricted net assets

c. As decreases of temporarily restricted net assets

d. As decreases of unrestricted net assets

Question 2. Which of the following is a general rule established by the FASB regarding contributions received by an NFPO 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 either as restricted support or unrestricted support.

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

d. They must be reported in an endowment fund.

Question 3. Which of the following financial statements is required for VHWOs but not for ONPOs?

a. Statement of financial position

b. Statement of activities

c. Statement of functional expenses

d. Statement of cash flows

Question 4. If a donor provides that interest earned on an endowment be used to finance a particular program, how should the interest revenue be classified?

a. As unrestricted

b. As temporarily restricted

c. As permanently restricted

d. As quasi-endowment income

Question 5. How should land and buildings owned by an NFPO be classified in its financial statements?

a. As unrestricted

b. As temporarily restricted

c. As permanently restricted

d. They need not be reported

Question 6. At the balance sheet 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?

a. No adjustment is needed.

b. The increase should be recorded as an unrestricted gain.

c. The increase should be recorded as a temporarily restricted gain.

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

Question 7. The Prevent Cancer Organization incurred several expenses during 2013. Which of the following would not be classified as program support?

a. Postage for announcements of the 2013 Kickoff Dinner

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

c. Pamphlets on the relationship of smoking to cancer

d. Salaries of personnel who perform cancer research

Question 8. As a result of its annual fund-raising program, an NFPO receives pledges in the amount of $300,000 during December 2012, the last month of its reporting period. Based on its previous history regarding pledges, the NFPO believes that about $250,000 will be collected in the first 60 days of 2013; $35,000 will trickle in during the rest of 2013; and $15,000 will not be collected at all. How much should the NFPO report as net contributions receivable on its 2012 financial statements?

a. $0

b. $250,000

c. $285,000

d. $300,000

Question 9. Computer expert J. Leveille donated 60 hours of time to the Boston Museum, an NFPO. 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. Leveille's services?

a. $0

b. $200

c. $6,000

d. $6,200

Question 10. The trustees of an NFPO decide to designate a portion of the NFPO's resources for use in a specific research program. How should the designation be reported in the NFPO's financial statements?

a. Board designations should never be reported in NFPO financial statements.

b. As temporarily restricted net assets, either on the face of the statements or in a note

c. As temporarily restricted net assets designated for research, in a note

d. As unrestricted net assets designated for research, either on the face of the statements or in a note