Question 1

Under FAS 117, private nonprofit organizations must show three classes of net assets (equity) in their statement of financial position: (a) ______________________________, (b) ______________________________, and (c) __________________________.

Accepted Answer

The answer of Under FAS 117, private nonprofit organizations must...

Question 2

The unrestricted net asset category in the statement of financial position could be subdivided between (a) ________________________________________ net assets and (b) ______________________ net assets.

Accepted Answer

The answer of The unrestricted net asset category in the...

Question 3

Under FAS 117, revenues, gains, and other support must be reported by __________________________________ in the statement of activities.

Accepted Answer

The answer of Under FAS 117, revenues, gains, and other...

Question 4

Under FAS 117, all expenses are shown in the ___________________ category in the statement of activities.

Accepted Answer

The answer of Under FAS 117, all expenses are shown...

Question 5

Under FAS 117, expirations of restrictions are reported _______________________________________________ in the statement of activities.

Accepted Answer

The answer of Under FAS 117, expirations of restrictions are...

Question 6

Voluntary health and welfare organizations must also report expenses by __________________classification in a separate financial statement using a(n) __________________ format.

Accepted Answer

The answer of Voluntary health and welfare organizations must also...

Question 7

In general, revenues and expenses are reported at their ___________ amounts.

Accepted Answer

The answer of In general, revenues and expenses are reported...

Question 8

The statement of activities may be in ___________________format or in ____________________ format.

Accepted Answer

The answer of The statement of activities may be in...

Question 9

For each category of net assets, the statement of activities must show for the nonprofit organization as a whole the amount of ______________________________.

Accepted Answer

The answer of For each category of net assets, the...

Question 10

The statement of cash flows may be prepared using the ________________ method (the preferred method) or the ______________ method.

Accepted Answer

The answer of The statement of cash flows may be...

Question 11

FAS 117 ________the use of fund accounting for internal record-keeping purposes.

Accepted Answer

The answer of FAS 117 ________the use of fund accounting...

Question 12

Under FAS 116, the definition of contributions does not include conditional promises to give.

Accepted Answer

Under FAS 116 (now part of ASC 958), conditional promises to give are not recognized as contributions until the conditions are substantially met, distinguishing them from unconditional promises which are recognized immediately.

Question 13

Under FAS 116, the definition of contributions includes both reciprocal and nonreciprocal transfers.

Accepted Answer

Under FAS 116 (now known as ASC 958-605), contributions are defined as nonreciprocal transfers, meaning the donor does not expect to receive anything of approximately equal value in return. Reciprocal transfers, where both parties receive and sacrifice approximately equal value, are considered exchanges and are not classified as contributions under this standard.

Question 14

Under FAS 116, an unconditional promise to give must be in writing to qualify as a recognizable contribution.

Accepted Answer

Under FAS 116, an unconditional promise to give does not need to be in writing to be recognized as a contribution. It can be oral, as long as it is verifiable and the organization has sufficient evidence of the promise.

Question 15

Under FAS 116, unconditional promises to give are recognized in the financial statements when received-not when collected.

Accepted Answer

Under FAS 116 (Accounting for Contributions Received and Contributions Made), unconditional promises to give are recognized as revenues or gains in the financial statements when the promise is received, not when the cash is collected. This is because the standard follows the accrual basis of accounting, where revenues are recognized when earned, regardless of when the cash is received.

Question 16

Under FAS 116, a communication that is unclear as to whether it constitutes an unconditional promise to give is deemed an unconditional promise if it is legally enforceable.

Accepted Answer

Under FAS 116, a communication that is unclear as to whether it constitutes an unconditional promise to give is deemed an unconditional promise if it is legally enforceable.

Question 17

Under FAS 116, conditional promises to give are considered unconditional if the probability that the specified future event will occur is remote.

Accepted Answer

Under FAS 116, conditional promises to give are not recognized as unconditional simply because the probability of the specified future event not occurring is remote. They are recognized as contributions only when the conditions are substantially met.

Question 18

Under FAS 116, assets that have been received and that can be retained and used only if a conditional future event occurs are classified in the asset section as Refundable Advances.

Accepted Answer

The answer of Under FAS 116, assets that have been...

Question 19

Under FAS 116, contributions that create endowments are always reported in the statement of activities-never as direct adjustments to equity.

Accepted Answer

Under FAS 116 (now included in ASC 958 due to the FASB Accounting Standards Codification), contributions, including those that create endowments, are reported as revenues in the statement of activities, reflecting increases in net assets, rather than as direct adjustments to equity. This ensures that all contributions are recognized in a consistent manner, highlighting the organization's financial activities over the period.

Question 20

Under FAS 116, contributions are recognized when received, with limited exceptions.

Accepted Answer

FAS 116 (Accounting for Contributions Received and Contributions Made) requires that contributions be recognized in the period received, except for unconditional promises to give, which are recognized when the promise is made.

Quiz 26: Not-For-Profit Organizations: Introduction and Private Npos

Under FAS 117, private nonprofit organizations must show three classes of net assets (equity) in their statement of financial position: (a) __, (b) , and (c) .

The unrestricted net asset category in the statement of financial position could be subdivided between (a) __________________ net assets and (b) net assets.

Under FAS 117, revenues, gains, and other support must be reported by __________________________________ in the statement of activities.

Under FAS 117, all expenses are shown in the ___________________ category in the statement of activities.

Under FAS 117, expirations of restrictions are reported _______________________________________________ in the statement of activities.

Voluntary health and welfare organizations must also report expenses by classification in a separate financial statement using a(n) format.

In general, revenues and expenses are reported at their ___________ amounts.

The statement of activities may be in _format or in __ format.

For each category of net assets, the statement of activities must show for the nonprofit organization as a whole the amount of ______________________________.

The statement of cash flows may be prepared using the __ method (the preferred method) or the method.

FAS 117 ________the use of fund accounting for internal record-keeping purposes.

Under FAS 116, the definition of contributions does not include conditional promises to give.

Under FAS 116, the definition of contributions includes both reciprocal and nonreciprocal transfers.

Under FAS 116, an unconditional promise to give must be in writing to qualify as a recognizable contribution.

Under FAS 116, unconditional promises to give are recognized in the financial statements when received-not when collected.

Under FAS 116, a communication that is unclear as to whether it constitutes an unconditional promise to give is deemed an unconditional promise if it is legally enforceable.

Under FAS 116, conditional promises to give are considered unconditional if the probability that the specified future event will occur is remote.

Under FAS 116, assets that have been received and that can be retained and used only if a conditional future event occurs are classified in the asset section as Refundable Advances.

Under FAS 116, contributions that create endowments are always reported in the statement of activities-never as direct adjustments to equity.

Under FAS 116, contributions are recognized when received, with limited exceptions.