Quiz about Financial Reporting Standards Quiz

Question 1

Which rule-making body is currently setting standards of financial reporting for private not-for-profit universities and for public (governmental) universities?

Accepted Answer

FASB, GASB

Answer

FASB, FASB

Answer

GASB, GASB

Answer

GASB, AICPA

Question 2

Net assets restricted as to time or purpose should be classified as:

I: Temporarily Restricted

II: Permanently Restriced

Accepted Answer

I only

Answer

II only

Answer

Both I and II

Answer

Neither I nor II

Question 3

A not-for-profit organization received a donation temporarily restricted as to use. The donated amount was later spent in accordance with the restriction. In which category(ies) of net assets should the related revenues and expenses be recognized?

Accepted Answer

Unrestricted: Expenses, Temporarily restricted: Revenues

Answer

Unrestricted: ----, Temporarily restricted: Revenues and Expenses

Answer

Unrestricted: Revenues, Temporarily restricted: Expenses

Answer

Unrestricted: Revenues and Expenses, Temporarily restricted: ----

Question 4

According to FASB 93, "Recognition of Depreciation by Not-For-Profit (NFP) Entities," NFP entities should recognize depreciation: I. on all long-lived tangible assets. II. on all long-lived intangible assets.

Accepted Answer

I only

Answer

II only

Answer

Both I and II

Answer

Neither I nor II

Question 5

The term "restricted" as used in university accounting refers to a constraint on the use of funds which has been: I. internally imposed. II. externally imposed.

Accepted Answer

B. II only

Answer

A. I only

Answer

C. Either I or II

Answer

D. Neither I nor II

Question 6

According to Statement of Financial Accounting Standards 117, the statement of financial position of a private university should report the excess of the university's assets over its liabilities as:

Accepted Answer

D. unrestricted, temporarily restricted, and permanently restricted net assets.

Answer

A. fund balance.

Answer

B. unrestricted and restricted fund balance.

Answer

C. retained earnings.

Question 7

Which of the following is an example of volunteer services received by a not-for-profit entity that should be recognized as revenue? I. Services requiring specialized skills, provided by individuals with those skills, that otherwise would have to be purchased. II. Services of lay faculty at a private university operated by a religious order. III. Services that create or enhance non-financial assets, regardless of whether or not they require specialized skills.

Accepted Answer

D. I, II, and III

Answer

A. I only

Answer

B. I and III only

Answer

C. II and III only

Question 8

In a university, class cancellation refunds of tuition and fees should be recorded as: I. a reduction of revenue from tuition and fees. II. a reduction of accounts receivable.

Accepted Answer

I only

Answer

II only

Answer

Either I or II

Answer

Neither I nor II

Question 9

Which of the following recognition and measurement bases best summarizes the usual treatment of current contributions to private not-for-profit entities in accordance with FASB 116?

Accepted Answer

Option D

Answer

Option A

Answer

Option B

Answer

Option C

Question 10

According to FASB 124, not-for-profit entities should report investments in the financial statements at: I. fair market value. II. lower of cost or market.

Accepted Answer

I only

Answer

II only

Answer

Either I or II

Answer

Neither I nor II

Question 11

Investment income for not-for-profit entities may include: I. interest from debt investments. II. dividends from equity investments. III. changes in the fair values of both debt and equity investments.

Accepted Answer

D. I, II, and III

Answer

A. I only

Answer

B. I and II only

Answer

C. I and III only

Question 12

A private university received $280,000 from student tuition and fees for the year 2009 summer session. The session began on June 20, 2009, and ended on July 30, 2009. The university's fiscal year end is June 30. According to the AICPA College and University Audit Guide, how should the university report the $280,000 of receipts in its financial statements for the year ended June 30, 2009?

Accepted Answer

C. Deferred revenue of $280,000.

Answer

A. Current revenue of $280,000.

Answer

B. Current revenue of $70,000 and deferred revenue of $210,000.

Answer

D. Restricted current revenue of $280,000.

Question 13

Assume that a private university collects tuition and fees at the beginning of summer school, in which two weeks are offered in the first fiscal year and the remaining six weeks are offered in the second fiscal year. According to the approach recommended by the National Association of College and University Business Officers (NACUBO), the university would:

Accepted Answer

D. recognize revenue in the first fiscal period for two-eighths of the tuition and fees and record six-eighths of the collections as a deferred revenue.

Answer

A. record the collections as a debit to Cash and a credit to Deferred Revenue for the entire amount of the collections.

Answer

B. record the collections as a debit to Cash and a credit to Restricted current revenue for the entire amount of the collections.

Answer

C. account for the entire tuition and fees as revenue in the first fiscal period.

Question 14

A private university offers graduate assistantships to qualified students each year. In exchange for the waiver of tuition, graduate assistants are required to assist faculty members with research and other activities. Assume a graduate assistant received a $4,000 tuition waiver for the current academic year. Based on these facts, the university should record:

Accepted Answer

tuition revenues of $4,000 and expenditures of $4,000.

Answer

tuition revenues of $0 and expenditures of $0.

Answer

tuition revenues of $4,000 and expenditures of $0.

Answer

tuition revenues of $4,000 and a reduction of tuition revenues of $4,000.

Question 15

For the year ended June 30, 2009, a university assessed its students a total of $4,000,000 for tuition and fees. Included in this amount was $300,000 of tuition remissions awarded to graduate teaching assistants, and $150,000 of scholarships awarded to undergraduate students. Tuition and fees totaling $3,550,000 were collected during the year ended June 30, 2009. What amount should be reported in the unrestricted fund as net revenue from tuition and fees for the year ended June 30, 2009?

Accepted Answer

$3,850,000

Answer

$4,000,000

Answer

$3,550,000

Answer

$3,700,000

Question 16

A private not-for-profit university generally must depreciate all tangible fixed assets, except: I. works of art and other historical treasures. II. administration buildings.

Accepted Answer

I only

Answer

II only

Answer

Both I and II

Answer

Neither I nor II

Question 17

A private college received an offer from a CPA who is an alumnus to teach a one-semester advanced accounting course at no cost. FASB 116 prescribes that this contribution of service:

Accepted Answer

be recorded as a revenue with an equivalent amount recorded as an expenditure.

Answer

need only be disclosed in the footnotes to the financial statements.

Answer

be recorded as an asset with an equivalent amount recorded in the unrestricted fund balance.

Answer

need not be recorded if the service is for a period less than one academic year.

Question 18

In accordance with FASB 117, contributions from donors which are to be permanently invested should be disclosed on the statement of activities of a private university as an increase in:

Accepted Answer

Permanently restricted net assets.

Answer

Permanently restricted fund balance.

Answer

Endowment fund balance.

Answer

Deferred revenues.

Question 19

For the year ended June 30, 2009, a private college received contributions from alumni which were restricted for faculty research stipends to be awarded during the next fiscal year. For the year ended June 30, 2009, these contributions should be disclosed on the statement of activities of the private college as an increase in:

Accepted Answer

temporarily restricted net assets.

Answer

the fund balance of the restricted current fund.

Answer

deferred revenues.

Answer

temporarily restricted fund balance.

Question 20

A private, not-for-profit university should prepare which of the following financial statements?

I: Statement of financial position

II: Statement of Activities

III: Statement of changes in fund balance

IV: Statement of Cash flows

V: Statement of changes in financial position

Accepted Answer

C. I, II, and IV.

Answer

A. I, II, and III.

Answer

B. II, III, and IV.

Answer

D. II, III, and V.

Question 21

Unrestricted gifts and endowment income of a private university are reported as

Accepted Answer

C. unrestricted revenues on the statement of activities.

Answer

A. increases in the unrestricted current fund balance on the statement of changes in fund balances.

Answer

B. unrestricted revenues on the statement of current funds revenues, expenditures, and other changes.

Answer

D. increases in the unrestricted current fund balance on the statement of activities.

Question 22

One of the major objectives of FASB 117 is to

Accepted Answer

D. bring about greater uniformity in the financial statements of all private, not-for-profit organizations.

Answer

A. emphasize the different fund structures that currently exist for all private, nonprofit organizations.

Answer

B. change the reporting for governmental organizations so that their reporting is comparable to that of private, nonprofit organizations.

Answer

C. report combined financial statements, instead of individual fund financial statements, for all private, nonprofit organizations.

Question 23

A not-for-profit private college in Virginia created a separate foundation responsible for obtaining financial support from alumni and others. Foundation assets are used for the benefit of the college. Donations made to the foundation and subsequently transferred to the college should be:

Accepted Answer

recognized as revenues by the foundation when received and as expenses by the foundation when transferred.

Answer

recognized as revenues by the foundation when received, and as revenues of the college when transferred.

Answer

recognized both as a change in its interest in the foundation and as revenues by the college when the donation is received by the foundation.

Answer

recognized as an increase in net assets of the foundation and as revenues of the college when the donation is received by the college.

Question 24

FASB 93:

Accepted Answer

guides depreciation.

Answer

guides accounting for contributions.

Answer

establishes financial display requirements.

Answer

establishes the accounting for investments.

Question 25

On the statement of operations prepared for a private, not-for-profit hospital, patient service revenue earned during the year is reported net of amounts for which of the following items?

I: Contractual Adjustments

II: Bad Debts Expense

Accepted Answer

I only

Answer

II only

Answer

I and II

Answer

Neither I nor II

Question 26

A private, not-for-profit hospital received a cash contribution of $100,000 from Samantha Hicks on November 14, 2008. Ms. Hicks specified the money be used to acquire equipment. On December 31, 2008, the hospital had not expended any of Ms. Hicks' contribution. On the statement of changes in net assets for the year ended December 31, 2008, the hospital should report the contribution as a $100,000 increase in:

Accepted Answer

temporarily restricted net assets.

Answer

unrestricted net assets.

Answer

fund balance.

Answer

deferred revenue.

Question 27

Unrestricted current funds of a private university designated by the governing board for a specific future purpose should be reported as part of:

Accepted Answer

unrestricted net assets.

Answer

temporarily restricted net assets.

Answer

board-restricted net assets.

Answer

term endowments.

Question 28

A private, not-for-profit geographic society received cash contributions which were restricted by the donors for the acquisition of fixed assets. In which section of the statement of cash flows would these cash contributions be reported?

Accepted Answer

Financing activities

Answer

Investing activities

Answer

Operating activities

Answer

Capital and related financing activities

Question 29

On the statement of activities for a private, not-for-profit literary society, expenses decrease which of the following classes of net assets?

Accepted Answer

II. unrestricted net assets

Answer

I. temporarily restricted net assets

Answer

Either I or II

Answer

Neither I nor II

Question 30

Bridger Hospital, which is operated by a religious organization, provides charity care for the indigent living in the region served by the hospital. How should Bridger report the amount of its charity care on its financial statements?

Accepted Answer

In the notes to the financial statements only.

Answer

As unrestricted revenues on the statement of operations.

Answer

As net patient service revenue and as an expense, equal to the net patient service revenue, on the statement of operations.

Answer

As temporarily restricted revenue on the statement of operations.

Question 31

The governing board of Samaritan Hospital, which is operated by a religious organization, designated $500,000 of cash for future expansion of the hospital. On the hospital's balance sheet, the cash designated for future plant expansion would be disclosed in which of the following classes of net assets?

Accepted Answer

Unrestricted net assets

Answer

Temporarily restricted net assets

Answer

Plant replacement and expansion.

Answer

Board designated net assets

Question 32

Good Care Hospital, which is operated by a religious organization, received contributions of $1,000,000 from donors who stipulated that the cash be used to construct an addition to the hospital. As of the balance sheet date, none of the contributions had been expended for construction. On the hospital's balance sheet, the cash contributions would be disclosed in which of the following classes of net assets?

Accepted Answer

Temporarily restricted net assets

Answer

Donor restricted net assets

Answer

Assets whose use is limited

Answer

Permanently restricted net assets

Question 33

A private, not-for-profit hospital received contributions of $50,000 from donors on June 15, 2009. The donors stipulated that their contributions be used to purchase equipment for the hospital. As of June 30, 2009, the end of the hospital's fiscal year, $12,000 of the contributions had been spent on equipment acquisitions. In the hospital's general fund, what account would be credited to recognize the release of the restrictions on the temporarily restricted contributions used to acquire equipment?

Accepted Answer

Net assets released from equipment acquisition restriction

Answer

Revenue released from equipment acquisition restriction

Answer

Other financing sources

Answer

Unrestricted net assets released from equipment acquisition restriction

Question 34

A private, not-for-profit hospital uses a fund structure which includes a general fund and donor restricted funds. The hospital's revenues from nursing programs and gift shops should be accounted for in the:

Accepted Answer

general fund.

Answer

specific purpose fund.

Answer

restricted current fund.

Answer

time-restricted fund.

Question 35

A private, not-for-profit hospital uses a fund structure which includes a general fund and donor restricted funds. Contributions received from donors for research to be conducted by the hospital should be accounted for in the:

Accepted Answer

specific purpose fund.

Answer

time-restricted fund.

Answer

general fund.

Answer

restricted current fund.

Question 36

On June 30, 2009, a voluntary health and welfare organization received pledges from donors amounting to $50,000. The donors did not place any time or use restrictions on the amount pledged. It was estimated that 10 percent of the pledges would not be collected. How should the voluntary health and welfare organization report these pledges on its financial statements prepared at the end of its fiscal year, June 30, 2009?

Accepted Answer

As contribution revenue-unrestricted for $45,000.

Answer

As fund balance for $45,000.

Answer

As contribution revenue-unrestricted for $50,000.

Answer

As fund balance-unrestricted for $50,000.

Question 37

The restricted funds of a not-for-profit hospital are often termed "______" funds because they must hold the restricted assets and transfer expendable resources to the general fund for expenditure.

Accepted Answer

holding

Answer

specific

Answer

controlled

Answer

limited

Question 38

All restricted funds of private, not-for-profit hospitals account for resources:

Accepted Answer

whose use is restricted by the donor.

Answer

received and expended in the hospital's primary health care mission.

Answer

that are only temporarily restricted.

Answer

received or pledged by donors for use in future periods.

Question 39

A donor agrees to contribute $5,000 per year at the end of each of the next five years to a voluntary health and welfare organization. The donor did not place any use restrictions on the amount pledged. The stream of the payments is discounted at 6 percent. The first payment of $5,000 is received at the end of the first year. The present value factor for a five-payment annuity due on June 30, 2009, at 6 percent is 4.2124.

Based on the preceding information, at the end of the first year, the pledge increased unrestricted net assets by:

Accepted Answer

$5,000.

Answer

$25,000.

Answer

$21,062.

Answer

$4,212.

Question 40

A donor agrees to contribute $5,000 per year at the end of each of the next five years to a voluntary health and welfare organization. The donor did not place any use restrictions on the amount pledged. The stream of the payments is discounted at 6 percent. The first payment of $5,000 is received at the end of the first year. The present value factor for a five-payment annuity due on June 30, 2009, at 6 percent is 4.2124.

Based on the preceding information, the increase in present value of the contributions receivable recognized at the end of the first year equals:

Accepted Answer

$1,264.

Answer

$5,000.

Answer

$4,212.

Answer

$787.

Question 41

A private, not-for-profit hospital received a donation of medicine from the XYZ Pharmaceutical Company on March 15, 2009. The cost of the medicine to the company was $66,000, and its market value was $110,000. Twenty percent of the medicine was used by the hospital during the year ended June 30, 2009. On the hospital's statement of operations for the year ended June 30, 2009, the contribution of medicine would increase operating revenues by:

Accepted Answer

$110,000.

Answer

$66,000.

Answer

$52,800.

Answer

$88,000.

Question 42

In accordance with FASB 116, contributions of services are recognized as increases in unrestricted net assets by a private, not for profit entity if which of the following criteria are satisfied? I. The services received create or enhance nonfinancial assets. II. The services require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donations. III. The services will be performed within the current fiscal year.

Accepted Answer

I or II.

Answer

I or III.

Answer

II or III.

Answer

I, II, III.

Question 43

The disclosure, "net assets released from restrictions," is reported on which of the following financial statements for a voluntary health and welfare organization? I. The statement of cash flows. II. The statement of activities.

Accepted Answer

B. II only

Answer

A. I only

Answer

C. Both I and II

Answer

D. Neither I nor II

Question 44

Good Faith Hospital, operated by a religious organization, billed patients $4,000,000 for services rendered during the year ended June 30, 2009. The hospital realized cash of $3,500,000 from the patient billings because of the following reductions: (1) contractual adjustments of $140,000 granted to private insurance companies and to the federal government; and (2) uncollectible accounts receivable of $360,000. On the statement of operations prepared for the year ended June 30, 2009, Good Faith Hospital should report net patient service revenue of:

Accepted Answer

B. $3,860,000.

Answer

A. $3,500,000.

Answer

C. $4,000,000.

Answer

D. $3,640,000.

Question 45

During the fiscal year ended June 30, 2009, a private, not-for-profit hospital acquired equipment costing $75,000, with cash contributed by donors who restricted their contributions for this purpose. On the hospital's statement of cash flows for the year ended June 30, 2009, the equipment acquisition should be reported in which of the following sections?

Accepted Answer

C. Investing activities

Answer

A. Operating activities

Answer

B. Financing activities

Answer

D. I, II, III

Question 46

During the fiscal year ended June 30, 2009, Global Charities, a voluntary health and welfare organization, received unrestricted cash contributions of $500,000 and temporarily restricted cash contributions of $300,000. All of the temporarily restricted contributions were restricted by the donors for equipment acquisitions. During the year ended June 30, 2009, equipment costing $250,000 was acquired with the restricted contributions. As a result of these two contributions, Global Charities' statement of cash flows, prepared for the year ended June 30, 2009, would report an increase in net cash provided by operating activities of:

Accepted Answer

A. $500,000.

Answer

B. $800,000.

Answer

C. $750,000.

Answer

D. $550,000.

Question 47

A voluntary health and welfare organization received a $300,000 contribution on April 15, 2009, from a donor who stipulated the donation be invested permanently in stocks and bonds. The donor further stipulated earnings from the investments be spent according to the wishes of the governing board of the voluntary health and welfare organization. Earnings from the investments for the year ended June 30, 2009, amounted to $6,000. How would the voluntary health and welfare organization report this information for the year ended June 30, 2009?

Accepted Answer

Increase in permanently restricted net assets of $300,000, and in unrestricted net assets of $6,000.

Answer

Increase in permanently restricted net assets of $306,000.

Answer

Increase in permanently restricted net assets of $300,000, and in temporarily restricted net assets of $6,000.

Answer

Increase in permanently restricted net assets of $300,000, and in board-designated net assets of $6,000.

Question 48

Which financial statement is (are) required for a voluntary health and welfare organization which is not required for a private, not-for-profit hospital? I. A statement of operations. II. A statement of functional expenses.

Accepted Answer

II only

Answer

I only

Answer

Both I and II

Answer

Neither I nor II

Question 49

In 2009, a private not-for-profit hospital received a $200,000 cash contribution to its endowment fund. During the year, hospital administration invested $150,000 of the funds. Which of the following statements regarding the effect of these transactions on the preparation of the hospital's statement of cash flow is true?

Accepted Answer

The $200,000 contribution will appear in the financing activities section of the cash flow statement as a cash inflow.

Answer

The $200,000 contribution will appear in the investing activities section of the cash flow statement as a cash inflow.

Answer

The $150,000 investment will appear in the investing activities section of the cash flow statement as a cash inflow.

Answer

The $150,000 contribution will appear in the financing activities section of the cash flow statement as a cash inflow.

Question 50

A private, not-for-profit hospital received a contribution of $40,000 on June 15, 2008. The donor restricted the contribution to funding research activities currently being performed by the hospital. For the year ended December 31, 2008, the hospital spent $30,000 of the contribution on research activities. The hospital expended the remaining $10,000 on research activities in January of 2009.

Refer to the above information. On the statement of cash flows prepared for the year ended December 31, 2008, the events described would increase net cash flows provided by

Accepted Answer

operating activities by $10,000.

Answer

operating activities by $40,000.

Answer

financing activities by $40,000.

Answer

financing activities by $10,000.

Question 51

A private, not-for-profit hospital received a contribution of $40,000 on June 15, 2008. The donor restricted the contribution to funding research activities currently being performed by the hospital. For the year ended December 31, 2008, the hospital spent $30,000 of the contribution on research activities. The hospital expended the remaining $10,000 on research activities in January of 2009.

Refer to the above information. On the statement of operations prepared for the year ended December 31, 2008, the events described would:

Accepted Answer

have no effect on operating income.

Answer

increase operating income by $30,000.

Answer

increase unrestricted net assets by $30,000.

Answer

decrease unrestricted net assets by $30,000.

Question 52

A private, not-for-profit hospital received a contribution of $40,000 on June 15, 2008. The donor restricted the contribution to funding research activities currently being performed by the hospital. For the year ended December 31, 2008, the hospital spent $30,000 of the contribution on research activities. The hospital expended the remaining $10,000 on research activities in January of 2009.

Refer to the above information. On the statement of changes in net assets prepared for the year ended December 31, 2008, the events described would

Accepted Answer

increase temporarily restricted net assets by $10,000.

Answer

decrease temporarily restricted net assets by $10,000.

Answer

increase unrestricted net assets by $10,000.

Answer

decrease unrestricted net assets by $10,000.

Question 53

In a private, not-for-profit hospital, which fund would record cash and investments which have been restricted by the governing board for acquisitions of equipment and construction of a new hospital addition?

Accepted Answer

The general fund.

Answer

The plant replacement and expansion fund.

Answer

The specific purpose fund.

Answer

The endowment fund.

Question 54

The governing board of a hospital operated by a religious organization designated $3,000,000 of cash to be used for plant expansion. The cash was invested in stocks and bonds which earned $250,000 of dividend and interest income. The income from investments should be reported on the hospital's statement of operations as an increase in:

Accepted Answer

operating income

Answer

Temporarily Restricted net assets

Answer

either temporarily restricted net assets or unrestricted net assets, depending upon the nature of the governing board's restrictions

Answer

fund balance in the general fund

Question 55

A voluntary health and welfare organization received unrestricted cash donations of $20,000 from donors who attended a dinner held for the benefit of the organization. The costs of the dinner, including room rental, and other expenses, amounted to $7,000. On the statement of activities prepared for the voluntary health and welfare organization, the expenses of the dinner should be:

Accepted Answer

reported as fund raising costs

Answer

reported as management and general expenses

Answer

netted against the 20,000 of contribution revenue

Answer

reported as programmatic expenses

Question 56

On the statement of functional expenses prepared for a voluntary health and welfare organization, depreciation expense is allocated to
I. expenses for program services.
II. expenses for supporting services.

Accepted Answer

Both I and II

Answer

I

Answer

II

Answer

Neither I or II

Question 57

A voluntary health and welfare organization developed and printed informational materials which were intended to both educate the public about how its resources are used to help people in need and to also appeal to the public for much needed support. In this situation, the cost of the informational materials should be

Accepted Answer

allocated between expenses for program services and fund-raising expense

Answer

Accounted for as fund-raising expense

Answer

allocated to expenses for program services

Answer

accounted for as management and general expense

Question 58

FASB 117 requires that an "other not-for-profit entity" (ONPO) provide three financial statements. Which of the following is NOT one among them?

Accepted Answer

statement of functional expenses

Answer

statement of financial position

Answer

statement of activities

Answer

statement of cash flows

Question 59

A private, not-for-profit hospital received the following restricted contributions and other receipts during the year ended December 31, 2008:
1. For Research: 300,000

2. For Equipment Acquisitions: 200,000
3. Income from endowment to be used for new addition to hospital plant: 1,000,000
None of the contributions or other receipts were expended during the ended December 31, 2008. For the year ended December 31, 2008, what amount would be reported on the hospital's statement of changes in net assets as an increase in temporarily restricted net assets?

Accepted Answer

1,500,000

Answer

1.200.000

Answer

500,000

Answer

300,000

Financial Reporting Standards Quiz

Create a free account and access millions of resources

Similar Resources on Wayground

Popular Resources on Wayground

Discover more resources for Mathematics