Question 1

_____	Under FAS 117, how would the spending of money donated in the prior year for spending in the current year be reported in the statement of activities?

Accepted Answer

Under FAS 117, when money donated in the prior year for spending in the current year is spent, it is reported as an expense in the unrestricted category. This is because the funds have been released from their restriction by being spent for their intended purpose.

Question 2

_____	Under FAS 117, which of the following items could not be reported at their net amounts?

Accepted Answer

The answer of _____	Under FAS 117, which of the following...

Question 3

_____	Under FAS 117, in the absence of donor stipulations, gains recognized on an endowment would be reported in the statement of activities as increases in

Accepted Answer

Under FAS 117 (now updated to FASB ASC 958), in the absence of donor stipulations, gains recognized on an endowment are reported as increases in unrestricted net assets. This is because there are no donor-imposed restrictions limiting the use of the gains, allowing the organization discretion over their use.

Question 4

The hierarchy for determining the appropriate category of net assets in which to report endowment investment gains and losses is __________________________, ___________________________________, and _________________________________.

Accepted Answer

The answer of The hierarchy for determining the appropriate category...

Question 5

Endowment investment gains and losses on specific donated assets that must be held in perpetuity must be reported as changes to _________________________.

Accepted Answer

The answer of Endowment investment gains and losses on specific...

Question 6

Endowment investment gains and losses on specific donated assets that must be held for 50 years must be reported as changes to __________________________.

Accepted Answer

The answer of Endowment investment gains and losses on specific...

Question 7

Subsequent endowment investment gains that restore the fair value of the endowment fund investments to the level of the donor stipulated amount are reported as increases in ____________________________________ net assets.

Accepted Answer

The answer of Subsequent endowment investment gains that restore the...

Question 8

In determining the appropriate category of net assets in which to report endowment investment gains and losses, the first of three possible places to look is state law.

Accepted Answer

The answer of In determining the appropriate category of net...

Question 9

In determining the appropriate category of net assets in which to report endowment investment gains and losses, the first of three possible places to look is the donor's intent.

Accepted Answer

The donor's intent is the primary factor in determining how endowment investment gains and losses are classified among net asset categories, as it dictates the purpose and restrictions of the endowment funds.

Question 10

In determining the appropriate category of net assets in which to report endowment investment gains and losses, the last of three possible places to look is FAS 124, "Accounting for Certain Investments Held by Not-for-Profit organizations."

Accepted Answer

FAS 124 is the primary source of guidance for accounting for endowment investments held by not-for-profit organizations.

Question 11

Endowment investment gains and losses on specific donated assets that must be held in perpetuity are reported as changes to PR net assets.

Accepted Answer

Endowment investment gains and losses on specific donated assets that must be held in perpetuity are indeed reported as changes to permanently restricted (PR) net assets, reflecting the requirement to maintain the principal amount indefinitely while possibly using the investment income for purposes specified by the donor.

Question 12

Endowment investment gains and losses on specific donated assets that must be held in perpetuity are reported as changes to TR net assets.

Accepted Answer

Endowment investment gains and losses on specific donated assets that must be held in perpetuity are typically reported as changes to unrestricted net assets, not temporarily restricted (TR) net assets.

Question 13

Endowment investment gains and losses on specific donated assets that were received this year and must be held for 50 years are reported as changes to PR net assets.

Accepted Answer

Endowment investment gains and losses are reported as changes in net assets with donor restrictions, not as changes to permanently restricted (PR) net assets, reflecting the modern terminology and classification under FASB standards.

Question 14

Endowment investment gains on specific donated assets that were received this year and must be held for 50 years are reported as increases to UR net assets-if investment income can be spent in any manner.

Accepted Answer

Endowment investment gains on specific donated assets that were received this year and must be held for 50 years are reported as increases to UR net assets if investment income can be spent in any manner.

Question 15

Endowment investment gains on specific donated assets that were received this year and must be held for 50 years are reported as increases to PR net assets-if investment income can be spent only in a certain manner.

Accepted Answer

The answer of Endowment investment gains on specific donated assets...

Question 16

For a permanent endowment created by a cash donation, subsequent investment gains that restore the fair value of the endowment fund investments to the donor's stipulated amount are reported as increases in UR net assets.

Accepted Answer

Investment gains that restore the fair value of the endowment fund investments to the donor's stipulated amount are considered to be part of the endowment and are thus reported as increases in unrestricted (UR) net assets, as they help maintain the endowment's purchasing power over time.

Question 17

For a permanent endowment created by a cash donation, subsequent investment gains that restore the fair value of the endowment fund investments to the donor's stipulated amount are reported as increases in PR net assets.

Accepted Answer

The answer of For a permanent endowment created by a...

Question 18

For a permanent endowment created by a cash donation, endowment investment dividends that can be spent only on medical research are reported as increases in TR net assets.

Accepted Answer

Endowment investment dividends designated for a specific purpose, such as medical research, are considered restricted and would increase temporarily restricted (TR) net assets, reflecting the donor-imposed restriction on their use.

Question 19

For a permanent endowment created by a cash donation, endowment investment dividends that can be spent in any manner are reported as increases in UR net assets.

Accepted Answer

For a permanent endowment, the original donation is permanently restricted, but the dividends or interest earned from investing that donation can be classified as unrestricted (UR) net assets if the donor does not specify restrictions on their use, allowing them to be spent in any manner.

Question 20

For a permanent endowment created by a cash donation, endowment investment dividends that can be spent in any manner-but are unspent at year-end-are reported as increases in TR net assets.

Accepted Answer

Unspent endowment investment dividends are typically reported as increases in unrestricted net assets, not temporarily restricted (TR) net assets, unless there are specific donor-imposed restrictions.

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

_____ Under FAS 117, how would the spending of money donated in the prior year for spending in the current year be reported in the statement of activities?

_____ Under FAS 117, which of the following items could not be reported at their net amounts?

_____ Under FAS 117, in the absence of donor stipulations, gains recognized on an endowment would be reported in the statement of activities as increases in

The hierarchy for determining the appropriate category of net assets in which to report endowment investment gains and losses is ________, _, and _________________.