Question 1.Not-for-profit health care organization financial statements include a

1.Not-for-profit health care organization financial statements include a
a. Statement of Cash Flows
b. Statement of Activities

c. Statement of Revenues, Expenses, and
Changes in Fund Balance
d. Statement of Budget to Actual

2. Not-for-profit health care organization financial statements include a
a. Statement of Net Assets
b. Statement of Activities

c. Statement of Operations
d. Statement of Budget to Actual

3.A not-for-profit health care organization Statement of Operations displays the
a. cash balance at the end of the year
b. amount of operating income

c. net cash used by operating activities
d. classified net assets

4. When the Allowance for Doubtful Accounts is adjusted, the expense is charged to
a. Charity Care
b. Provision for Bad Debts

c. Doubtful Account Expenses
d. Reservation of Fund Equity

5.Public colleges and universities follow accounting standards issued by
a. GASB
b. FASB
6.

c. AICPA
d. NACUBO

GASB Statement No. 35 requires governmental colleges and universities to
a. follow the GASB Statement No. 34
financial reporting model
b. produce a Statement of Operations

c. use the 1995 AICPA Audits of Colleges
and Universities financial reporting model
d. only use the modified approach for
infrastructure assets

7. A college or university is classified as governmental if
a. the governing board is appointed by the
c. the governing board is publicly elected
college president
b. the university pays corporate income taxes d. all of the above
8. The Coleville Community College can levy taxes, issue tax-exempt debt and the governing board
is publicly elected. The Coleville Community College is a
a. private not-for-profit organization
b. governmental organization

c. business-type activity
d. both b and c are correct

9. Governmental colleges and universities implementing GASB Statements No. 34 and 35 will
a. no longer use funds

c. use invested in capital assets net of related
debt, restricted and unrestricted net asset
classes
b. use restricted, unrestricted and temporarily d. none of the above
restricted net asset classes
10.Colleges and universities may elect to record transactions directly into net asset classes rather than
a. the Statement of Activities
b. the Statement of Operations

c. funds
d. liabilities

11. Governmental colleges and universities display student financial aid as a(n)
a. discount
b. expense

c. it is not displayed
d. expenditure

12.A public college provides scholarship assistance of $8,000,000 to its students. When the students
register for classes the college applies $7,500,000 of the financial aid to their tuition and fee bills
of $10,000,000 and students receive $500,000 in cash. The amount that will be recognized as
tuition and fee revenue by the college is
a. $10,000,000
b. $2,000,000

c. $2,500,000
d. $9,500,000

13. A public university bills $80,000,000 in tuition and fees and provides $23,000,000 in financial
aid. The university refunds in cash $800,000 of this financial aid directly to students.
What amount will the university report as tuition and fee revenue?
a. $80,000,000
b. $79,200,000

c. $57,000,000
d. $57,800,000

14. A public college has tuition and fee billings of $30,000,000 and provides $6,000,000 in financial
aid to students. The students apply $5,200,000 of this financial aid to their tuition and fee bill and
take the excess in cash. What amount is reported as an expense for financial aid?
a. $6,000,000
b. $5,200,000

c. $800,000
d. $6,800,000

15.A public college and university have tuition and fee revenue of $18,000,000 for the summer
semester that bridges two fiscal years. Sixty percent of the instruction takes place in the next
fiscal year and the university decides to allocate the revenue on that basis. The journal entry to
record this transaction in the current fiscal year will include
a. $10,800,000 in revenue

c. $10,800,000 in deferred revenue

b. $18,000,000 in revenue

d. $7,200,000 in deferred revenue

16.A patron gets a call from the Metropolitan Opera Society and pledges $1,000 to be used for general
operations. The Metropolitan Opera Society will record
a. Contribution Revenue – Unrestricted
b. Contribution Revenue – Temporarily
Restricted

c. Contribution Revenue – Permanently
Restricted
d. nothing because it is only an oral pledge

17.The Humane Society conducts a fund-raising drive by telephone and has total pledges of $55,000
and notes on other possible donors who were still considering making pledges of $8,000. What
amount of contribution revenue will be recorded?
a. $55,000
b. $63,000

c. $8,000
d. Zero

18. A donor makes a pledge to the zoo of $8,000 that will be paid in four installments of $2,000 each
this year. The first installment of $2,000 is mailed in with the pledge card and the zoo will record
a. Contribution Revenue – Temporarily
Restricted of $8,000
b. Contribution Revenue – Temporarily
Restricted of $6,000

c. Contribution Revenue – Unrestricted of
$2,000
d. both b and c

19. A local charity received a $1,000 pledge that the donor agrees to pay next year. This is a(n)
a. unconditional, unrestricted contribution
b. unconditional, restricted contribution

c. conditional, unrestricted contribution
d. conditional, restricted contribution

20.A woman cleans out her attic and takes her thirty-year old clothes to her local Goodwill store. She
estimates she could get $50 for these if she held a garage sale. The Goodwill store sorts the
clothes and determines they cannot be used or sold and puts them in the pile that will go to the
landfill. Goodwill should record
a. a loss equal to amount of the dumping fee c. nothing
b. a $50 unrestricted contribution
d. a $50 unrestricted contribution net of the
dumping fee
21. The League of Women Voters meets once a month in a conference room that is made available
free by a local hotel and spends $25 for coffee and cookies at the hotel. The normal rental rate
for this room is $150. The League will record
a. nothing
b. $150 temporarily restricted contribution

c. $125 unrestricted contribution
d. $150 unrestricted contribution

22. A local corporation provides blankets worth $5,000 during a winter blizzard to be handed out by
the homeless shelter to the needy. The shelter will record

a. an unrestricted contribution of $5,000
b. an asset and liability of $5,000 each

c. a temporarily restricted contribution of
$5,000
d. none of the above

23.A contributed service may be recognized as contribution revenue if it is a
a. service that helps the organization
b. specialized skill possessed by the
individual

c. skill the organization normally purchases
d. b and c

24. A Certified Public Accountant provides 100 hours of free audit services to a local museum that is
valued at $50 an hour and also helps out by spending 100 hours helping clean and landscape the
grounds. The museum would record contribution revenue of
a. $5,000
b. $10,000

c. zero
d. none of the above

25. A sculpture worth $22,000 is donated to a botanical garden that has an outdoor sculpture park.
The botanical garden has decided to capitalize their sculpture collection so the donation would be
recorded as a
a. unrestricted contribution
b. permanently restricted contribution

c. temporarily restricted contribution
d. invested in capital assets net of related
debt

26. A viewer makes a $100 pledge to the local public broadcasting station and receives a coffee mug
valued at $2 in return. The station will record contribution revenue in the amount of
a. $100
b. $98

c. $102
d. zero

27.Supporting services include
a. fund-raising activities
b. membership development

c. management and general
d. all of the above

28.Not-for-profit organizations record capital assets in the
a. capital asset account
b. property and equipment account

c. depreciation account
d. net assets account

29. Not-for-profit organizations classify net assets as
a. conditional or unconditional
b. restricted or unrestricted

c. temporarily restricted, permanently
restricted or unrestricted
d. restricted, unrestricted and invested in
capital assets net of related debt

30. Investment income or net appreciation generated from unrestricted donated assets should be
reported
a. as a change in unrestricted net assets
b. where the donor specified

c. as a change in cash
d. as a change in contributions

31. FASB Statement No. 124 requires that losses on investments of a donor-restricted endowment
fund will
a. reduce temporarily restricted net assets
first
b. reduce the endowment

c. reduce unrestricted net assets first
d. be charged off as an expense

32. The basic financial statements for a not-for-profit opera society include a
a. Statement of Activities
b. Statement of Net Assets

c. Statement of Budget to Actual
d. Balance Sheet

33. The basic financial statements for the American Red Cross include
a. Statement of Net Assets
b. Statement of Functional Expenses

c. Statement of Budget to Actual
d. all of the above

34. The Statement of Functional Expenses is only required for
a. art museums
b. labor unions

c. religious organizations
d. voluntary health and welfare organizations

35. The Statement of Financial Position classifies assets, liabilities and net assets by
a. fund
b. program or supporting service

c. unrestricted, temporarily restricted or
permanently restricted
d. revenues or expense

36. The primary government’s financial reporting entity includes
a. organizations for which the primary
government is an issuer of conduit debt
b. organizations for which the primary
government is financially accountable

c. organizations that receive grants from the
primary government
d. organizations that collect taxes for the
primary government

37. Financial accountability exists if the primary government
a. collects taxes for the entity but cannot
c. cannot impose its will on the organization
impose its will on the entity
b. appoints a majority of the governing body d. appoints a majority of the governing body
and is responsible to fund any deficit
and collects taxes and issues conduit debt
incurred by the organization
for the entity

38. A primary government would have a potential financial benefit or burden from another
organization if the primary government can
a. modify the organization’s budget
b. use the organization’s resources
39.

c. modify the organization’s fees
d. appoint the organization’s finance director

Component units are
a. all other legally separate governmental
entities that are located within a county
b. all funds of the primary government

c. other organizations that should be
included to prevent the financial
statements from being misleading
d. all entities that participate in an external

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