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WorksheetsPG UJ3 ADV2
Total questions: 60
Worksheet time: 30mins
Name
Class
Date
1.
A nongovernmental, not-for-profit entity is subject to:
I. GASB
II. FASB
a)
a. I only
b)
b. II only
c)
c. a combination of I and II depending on the entity's purpose
d)
d. neither I or II
2.
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
a)
a. accounted for as fund-raising expense.
b)
b. allocated to expenses for program services.
c)
c. allocated between expenses for program services and fund-raising expense.
d)
d. accounted for as management and general expense.
3.
The duties of a debtor in possession in a Chapter 11 bankruptcy case do not include
a)
A) filing a list of creditors and schedules of assets and liabilities with the bankruptcy court.
b)
B) operating the business during the reorganization period.
c)
C) filing a reorganization plan.
d)
D) issuing an order of relief.
4.
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.
a)
a. I only
b)
b. I and II only
c)
c. I and III only
d)
d. I, II, and III
5.
Gray College, a private not-for-profit institution, received a contribution of $100,000 for faculty research. The donation was received in 20X1 and $80,000 was spent in 20X1. As a result of these transactions, Gray College should report on its 20X1 statement of activities a:
a)
a. $100,000 increase in temporarily restricted net assets.
b)
b. $20,000 increase in temporarily restricted net assets.
c)
c. $80,000 increase in temporarily restricted net assets.
d)
d. $100,000 increase in unrestricted net assets.
6.
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
a)
a. tuition revenues of $4,000 and expenditures of $4,000.
b)
b. tuition revenues of $0 and expenditures of $0.
c)
c. tuition revenues of $4,000 and expenditures of $0.
d)
d. tuition revenues of $4,000 and a reduction of tuition revenues of $4,000.
7.
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?
a)
a. Unrestricted: - ; Restricted: Revenue and Expenses
b)
b. Unrestricted: Revenues; Restricted: Expenses
c)
c. Unrestricted: Expenses; Restricted: Revenue
d)
d. Unrestricted: Revenues and Expenses; Restricted: -
8.
In a not-for-profit, private university, the federal grant funds given directly to students for financial aid are an example of
a)
a. a bequest.
b)
b. an agency transaction.
c)
c. unrestricted revenue.
d)
d. a restricted contribution.
9.
During the fiscal year ended June 30, 20X9, 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, 20X9, 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, 20X9, would report an increase in net cash provided by operating activities of:
a)
a. $500,000.
b)
b. $800,000.
c)
c. $750,000.
d)
d. $550,000.
10.
Voluntary health and welfare organizations (VHWO) measure contributions at fair value unless
a)
a. fair value is less than the original cost of the item.
b)
b. the contributed item is not intended to be re-sold by the VHWO.
c)
c. fair value cannot be reasonably determined.
d)
d. the contributions are not in cash or cash equivalents.
11.
Which of the following must approve a Chapter 11 plan?
a)
A) The organization's management and the assigned trustee
b)
B) The assigned trustee and creditors
c)
C) The assigned trustee and entity's stockholders
d)
D) The bankruptcy court and the creditors
12.
In a Chapter 7 bankruptcy case, what is the first-to-last ranking order of priority for payment? (Use
the following list of claim types.)
I. stockholder claims
II. unsecured priority claims
III. secured claims
IV. unsecured nonpriority claims
a)
A) I, II, IV, and III
b)
B) III, II, IV, and I
c)
C) III, I, IV, and II
d)
D) II, IV, III, and I
13.
Net assets restricted as to time or purpose should be classified as:
I. temporarily restricted.
II. permanently restricted.
a)
a. I only
b)
b. II only
c)
c. Both I and II
d)
d. Neither I nor II
14.
Voluntary health and welfare organizations must report expenses classified by
a)
a. restriction.
b)
b. function and natural classification.
c)
c. restriction and natural classification.
d)
d. restriction, function and natural classification.
15.
A private, not-for-profit hospital received a donation of medicine from the XYZ Pharmaceutical Company on March 15, 20X9. 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, 20X9. On the hospital's statement of operations for the year ended June 30, 20X9, the contribution of medicine would increase operating revenues by
a)
a. $66,000.
b)
b. $110,000.
c)
c. $52,800.
d)
d. $88,000.
16.
During the fiscal year ended June 30, 20X9, 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, 20X9, the equipment acquisition should be reported in which of the following sections?
I. Operating activities
II. Financing activities
III. Investing activities
a)
a. I
b)
b. II
c)
c. III
d)
d. I, II, III
17.
Voluntary health and welfare organizations
a)
a. may not have paid executives or staff.
b)
b. are governed by separate GASB statements.
c)
c. use fund accounting, following the rules for proprietary fund reporting.
d)
d. are supported by, and provide voluntary services to, the public.
18.
In a nongovernmental, nonprofit hospital, contractual adjustments are
a)
a. the discounted rate given to hospital employees.
b)
b. discounts arranged with third-party payors.
c)
c. recorded as a deduction from revenue or as an expense.
d)
d. additional amounts paid by select group participants
19.
Which of the following is not true?
a)
a. A not-for-profit entity operates for purposes other than to provide goods or services at a profit.
b)
b. A not-for-profit entity may be governmental or non-governmental.
c)
c. A not-for-profit entity may possess ownership interests like a corporation.
d)
d. A not-for-profit entity receives resources from resource providers who do not expect commensurate or proportionate pecuniary return.
20.
Voluntary health and welfare organizations classify fund-raising costs as
a)
a. costs of services sold.
b)
b. program services.
c)
c. auxiliary expenses.
d)
d. supporting services.
21.
An alumnus made a donation of adjoining land to a not-for-profit, nongovernmental university. The donor made no specifications regarding the time period or use of the land. The university would record the gift as
a)
a. an endowment asset.
b)
b. temporarily restricted revenue.
c)
c. unrestricted revenue.
d)
d. permanently restricted support
22.
What is an advantage of filing a Chapter 11 petition?
a)
A) The continuation of interest accrual on liabilities
b)
B) Restrictions imposed by the bankruptcy court on day-to-day transactions
c)
C) It is less costly than filing Chapter 7.
d)
D) The opportunity to cancel unfavorable contracts
23.
Under GAAP, for nonprofit, nongovernmental entities, an unconditional transfer of cash or other assets to an entity, or a settlement or cancellation of its liabilities in a voluntary, non-reciprocal transfer, is called a(n)
a)
a. unconditional promise to give.
b)
b. contribution.
c)
c. conditional promise to give.
d)
d. residual equity transfer.
24.
In a nonprofit, nongovernmental hospital, courtesy allowances are
a)
a. charity care services.
b)
b. revenue deductions.
c)
c. expenses.
d)
d. revenues earned even if the standard charge is above or below the allowance
25.
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.
a)
a. I only
b)
b. II only
c)
c. Either I or II
d)
d. Neither I nor II
26.
For a Voluntary Health and Welfare Organization, what entry is prepared when the restriction on a cash donation is met?
a)
a. Debit Unrestricted Net Assets, Credit Restricted Net Assets
b)
b. Debit Unrestricted Fund Balance, Credit Restricted Fund Balance
c)
c. Debit Restricted Fund Balance, Credit Unrestricted Fund Balance
d)
d. Debit Temporarily Restricted Net Assets - Reclassifications out, Credit Unrestricted Net Assets - Reclassifications in
27.
Not-for-profit, private colleges classify student unions, dining halls, and residence halls as
a)
a. educational and general services.
b)
b. auxiliary enterprises.
c)
c. independent operations.
d)
d. restricted enterprises.
28.
In 20X1, Ellen College, a private not-for-profit institution, received a $100,000 grant for faculty research. The grant money was not spent until 20X2. For 20X1, Ellen College should report the contribution as:
a)
a. Temporarily restricted asset.
b)
b. Unrestricted revenue.
c)
c. Other operating revenue.
d)
d. Other non-operating revenue.
29.
A donor gives a Voluntary Health and Welfare Organization (VHWO) $1,000 cash that is restricted for a research project. What account does the VHWO credit when the VHWO receives the money?
a)
a. Nonoperating Revenue
b)
b. Permanently Restricted Revenue
c)
c. Unrestricted Support
d)
d. Temporarily Restricted Support
30.
A private, not-for-profit hospital received a cash contribution of $100,000 from Samantha Hicks on November 14, 20X8. Ms. Hicks specified the money be used to acquire equipment. On December 31, 20X8, the hospital had not expended any of Ms. Hicks' contribution. On the statement of changes in net assets for the year ended December 31, 20X8, the hospital should report the contribution as a $100,000 increase in
a)
a. temporarily restricted net assets.
b)
b. unrestricted net assets.
c)
c. fund balance.
d)
d. deferred revenue.
31.
When the bankruptcy court grants an order for relief under Chapter 7,
a)
A) creditors may not seek payment for their claims directly from the debtor corporation.
b)
B) the reorganization plan was accepted by creditors having at least one-half of the total number of claims and the claims represent at least two-thirds of the total amount owed.
c)
C) the bankruptcy court confirms that the reorganization plan is fair and equitable to creditors.
d)
D) the court discharges the debtor except for those claims provided for in the reorganization plan.
32.
A bankruptcy petition filed by a firm's creditors is
a)
A) a Chapter 2 petition.
b)
B) a petition for liquidation.
c)
C) an involuntary petition.
d)
D) a voluntary petition
33.
Which of the following statements is correct concerning companies emerging from reorganization
under Chapter 11 when they do not qualify for fresh start accounting? The forgiveness of debt is reported
as
a)
A) an operating gain.
b)
B) a non-operating gain.
c)
C) an extraordinary item.
d)
D) an increase in contributed capital.
34.
On January 1, 2011, a Voluntary Health and Welfare Organization (VHWO) receives an unconditional promise to give $6,000. The money is not collectible until 2012. The VHWO estimates that 10% of pledges are uncollectible. On January 1, 2011, the VHWO will credit
a)
a. Unrestricted Support - Contribution, $6,000.
b)
b. Allowance for Uncollectible Contributions $600, and Unrestricted Support - Contribution, $5,400.
c)
c. Allowance for Uncollectible Contributions $600, Temporarily Restricted Support - Contribution, $5,400.
d)
d. Allowance for Uncollectible Contributions $600, Contribution Revenue $5,400.
35.
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, 20X9, at 6 percent is 4.2124.
Based on the preceding information, the journal entry to recognize present value at the time the pledge is received includes:
a)
a. a credit to Pledges Receivable—Temporarily Restricted for $25,000.
b)
b. a debit to Contributions—Temporarily Restricted for $21,062.
c)
c. a debit to Pledges Receivable—Temporarily Restricted for $21,062.
d)
d. a credit to Contributions—Temporarily Restricted for $25,000.
36.
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:
a)
a. reported as management and general expenses.
b)
b. netted against the $20,000 of contribution revenue.
c)
c. reported as fund raising costs.
d)
d. reported as programmatic expenses.
37.
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?
a)
a. Financing activities
b)
b. Investing activities
c)
c. Operating activities
d)
d. Capital and related financing activities
38.
For the year ended June 30, 20X9, 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, 20X9. What amount should be reported in the unrestricted fund as net revenue from tuition and fees for the year ended June’30, 20X9?
a)
a. $4,000,000
b)
b. $3,550,000
c)
c. $3,700,000
d)
d. $3,850,000
39.
A petition commencing a case against a corporate debtor
a)
A) can be filed only under Chapter 7 of the bankruptcy act.
b)
B) can be filed only under Chapter 11 of the bankruptcy act.
c)
C) can be filed under either Chapter 7 or Chapter 11 of the bankruptcy act.
d)
D) will be determined by the trustee whether it shall be Chapter 7 or Chapter 11 of the bankruptcy act.
40.
Chapter 7 bankruptcy cases differ from Chapter 11 bankruptcy cases because Chapter 7 bankruptcy
a)
A) is involuntary.
b)
B) requires a reorganization plan that is approved by the court.
c)
C) requires the debtor corporation to file a list of creditors, schedule of assets and liabilities, and work with a trustee.
d)
D) leads to full liquidation of the bankrupt company.
41.
A gift-in-kind, for which the not-for-profit entity has no discretion on disposition, should be accounted for by the not-for-profit, nongovernmental entity as
a)
a. a special purpose contribution.
b)
b. an exchange transaction.
c)
c. an agency transaction.
d)
d. a conditional promise to give.
42.
Which of the following does not occur for a trustee in a Chapter 7 bankruptcy case?
a)
A) Gains and losses on the sale of assets are debited to the estate equity account.
b)
B) Unrecorded liabilities discovered by the trustee are debited to the estate equity account and credited to the liability account.
c)
C) Liquidation expenses are debited to the estate equity account.
d)
D) An income statement is prepared showing gains and losses on sale of assets.
43.
Which one of the following statements is not required for voluntary health and welfare organizations?
a)
a. A statement of financial position
b)
b. A statement of activities
c)
c. A statement of functional expenses
d)
d. A statement of changes in net assets
44.
An alumnus of a nonprofit, nongovernmental university establishes an endowment of $50,000. When the university receives the endowment from the donor, what account will the university credit?
a)
a. Temporarily restricted revenues
b)
b. Temporarily restricted support
c)
c. Permanently restricted revenues
d)
d. Permanently restricted support
45.
When a corporation's total liabilities are greater than the fair value of total assets, the firm is
a)
A) a distressed corporation.
b)
B) a bankrupt corporation.
c)
C) insolvent in the equity sense.
d)
D) insolvent in the bankruptcy sense.
46.
Good Faith Hospital, operated by a religious organization, billed patients $4,000,000 for services rendered during the year ended June 30, 20X9. 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, 20X9, Good Faith Hospital should report net patient service revenue of:
a)
a. $3,500,000.
b)
b. $3,860,000.
c)
c. $4,000,000.
d)
d. $3,640,000.
47.
On June 30, 20X9, 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, 20X9?
a)
a. As fund balance for $45,000.
b)
b. As contribution revenue-unrestricted for $45,000.
c)
c. As contribution revenue-unrestricted for $50,000.
d)
d. As fund balance-unrestricted for $50,000.
48.
In a Chapter 11 case, the debtor corporation filing the petition may continue in possession of the
corporation's property, and is referred to as a(n)
a)
A) examiner.
b)
B) trustee.
c)
C) liquidator.
d)
D) debtor in possession.
49.
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.
a)
a. I only
b)
b. II only
c)
c. Both I and II.
d)
d. Neither I nor II.
50.
For nonprofit, nongovernmental organizations, unconditional promises to give that include promises of payments due in future periods (next year or later) are reported as
a)
a. unrestricted revenues.
b)
b. unrestricted support.
c)
c. deferred revenues until payment is received.
d)
d. restricted support.
51.
A primary difference between voluntary and involuntary bankruptcy petitions is that
a)
A) creditors file the petition in an involuntary filing.
b)
B) trustees are not used in an voluntary filing.
c)
C) voluntary petitions are not subject to review by the bankruptcy court.
d)
D) the debtor corporation files the petition in an involuntary filing.
52.
An entity which qualified for fresh-start accounting is not required to disclose which of the following
items in their initial financial statements?
a)
A) Adjustments from historical cost of assets and liabilities
b)
B) Amount of debt of the prior entity forgiven
c)
C) Amount of ending retained earnings/deficit of the prior entity
d)
D) Changes to the management team from the prior entity
53.
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 balances.
IV. statement of cash flows.
V. statement of changes in financial position.
a)
a. I, II, and III.
b)
b. II, III, and IV.
c)
c. I, II, and IV.
d)
d. II, III, and V.
54.
A single creditor
a)
A) can never file a petition for bankruptcy.
b)
B) with a $14,425 or more secured claim may file a petition for bankruptcy.
c)
C) with a $14,425 or more unsecured claim may file a petition for bankruptcy, if there are fewer than 12 unsecured creditors.
d)
D) with a $14,425 or more unsecured claim may file a petition for bankruptcy if there are more than 12 unsecured creditors.
55.
A company emerging from bankruptcy will have a reorganization value that
a)
A) approximates the book value of the entity's assets prior to bankruptcy.
b)
B) approximates the book value of the entity prior to bankruptcy.
c)
C) approximates the fair market value of the entity without considering liabilities.
d)
D) approximates the fair market value of the entity's liabilities.
56.
Which condition must be met for fresh-start reporting for an emerging company from Chapter 11?
a)
A) Holders of existing voting shares immediately before confirmation of the reorganization plan must receive more than fifty percent of the emerging entity.
b)
B) The loss of control by voting shareholders must be temporary.
c)
C) The reorganization value of the emerging entity's assets immediately before the date of the confirmation of the reorganization plan must be less than the total of all postpetition liabilities and allowed claims.
d)
D) The fresh-start entity must have a deficit.
57.
In a liquidation under Chapter 7, the trustee
a)
A) may not be appointed, but may only be elected.
b)
B) may not be elected, but may only be appointed.
c)
C) is responsible for converting assets to cash and distributing payments to claimants.
d)
D) is responsible for appointing a creditors' committee.
58.
The gift shop of a nonprofit, private hospital has cash revenue of $24,000. What account will the hospital credit?
a)
a. Unrestricted support - Contribution, $6,000.
b)
b. Unrestricted revenue
c)
c. Temporarily restricted revenue
d)
d. Other operating revenue - unrestricted
59.
Fresh-start reporting results in
a)
A) a new reporting entity with no retained earnings/deficit balance.
b)
B) a new reporting entity with a retained earnings/deficit balance equal to the reorganization value.
c)
C) a continuation of the reorganized organization with no retained earnings/deficit balance.
d)
D) a continuation of the reorganized organization with a retained earnings/deficit balance equal to the reorganization value.
60.
Creditor committees are elected
a)
A) in all bankruptcy cases.
b)
B) in Chapter 7 cases.
c)
C) only in bankruptcy cases arising from involuntary petitions.
d)
D) in Chapter 11 cases
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