Reference no: EM131704269

Question: (True or False) State whether each of these sentences is true or false. If false, state why.

1. FASB standards require that NFPO financial statements report on activities by major fund.

2. If an NFPO reports temporarily restricted resources, it is likely the restrictions could have been placed either by donors or by the NFPO's board of directors.

3. When an NFPO spends temporarily restricted resources on the project for which a donor made the contribution, the expenses are reported in the temporarily restricted column of the statement of activities.

4. Members of an NFPO donated their time to construct a garage for the NFPO's automobile. The NFPO would have paid $8,000 for the labor, had it not been donated. The garage will last 20 years. The NFPO should report the contributed labor as an asset and as contribution revenue.

5. Cash donated specifically for constructing a building that will have an estimated life of 40 years should be reported as temporarily restricted.

6. Depending on the circumstances, a not-for-profit museum has the option to either record or not record an asset when it receives a donation of a valuable art work.

7. From the perspective of NFPO accounting, there is no difference between a donor-imposed restriction and a donor-imposed condition.

8. An NFPO held a fund-raising campaign at year-end. It received pledges of $45,000, but it did not receive any cash until the following year. The NFPO should not report any revenue in the year it conducted its fund-raising campaign, but it should report the amount of the pledges in a note to the financial statements.

9. Gains and losses on investments must be reported in the unrestricted column of the statement of activities.

10. If a donor makes an unconditional promise to give cash to an NFPO 2 years after the NFPO's balance sheet date, the gift should be classified as temporarily restricted.