Question 1

The GASB has the authority to establish accounting and financial reporting standards for state and local governments and private sector not-for-profit organizations.

Accepted Answer

The GASB (Governmental Accounting Standards Board) has the authority to establish accounting and financial reporting standards for state and local governments, but not for private sector not-for-profit organizations. The FASB (Financial Accounting Standards Board) sets standards for private sector not-for-profits.

Question 2

Fixed assets may be recorded by a private not-for-profit as temporarily restricted or unrestricted,depending on the policy of the organization.

Accepted Answer

Fixed assets can be recorded as temporarily restricted or unrestricted depending on the policy of the private not-for-profit organization. Temporarily restricted fixed assets are those that have donor-imposed restrictions on their use, while unrestricted fixed assets can be used at the discretion of the organization.

Question 3

Accounting practices of private sector not-for-profit organizations are influenced by two AICPA audit and accounting guides:
 Not-for-Profit Organizations and Health Care Organizations.

Accepted Answer

The AICPA audit and accounting guides for Not-for-Profit Organizations and Health Care Organizations provide guidance on accounting practices for private sector not-for-profit organizations.

Question 4

Assets that are restricted by an organization's board can be reported as either temporarily restricted or permanently restricted,according to the board's intentions.

Accepted Answer

To be restricted, resources must be restricted by donors or grantors. Internally Board) designated resources are considered unrestricted.

Question 5

Under FASB Statement No.116,multiyear pledges are to be recorded as a pledge receivable for the total amount and contribution revenue will be recorded proportionally each year of the pledge.

Accepted Answer

The answer of Under FASB Statement No.116,multiyear pledges are to...

Question 6

According to FASB Statement 124,Accounting for Certain Investments of Not-for-Profit Organizations,requires investments in equity but not debt securities by a not-for-profit to be carried at fair value.

Accepted Answer

According to FASB Statement 124, investments in equity but not debt securities by a not-for-profit organization are required to be carried at fair value.

Question 7

A private not-for-profit reports expenses in either the unrestricted net asset class or restricted net asset class,as appropriate.

Accepted Answer

A private not-for-profit reports expenses only in the unrestricted net asset class, not in the restricted net asset class.

Question 8

If fixed assets are recorded as temporarily restricted assets,then a reclassification is made each accounting period to unrestricted resources in the amount equal to the depreciation or an allocation based on the time the asset is restricted,whichever is shorter.

Accepted Answer

This statement accurately describes the accounting treatment for fixed assets that are temporarily restricted.

Question 9

Contributions of assets other than cash to a private not-for-profit are recorded at the donor's basis.

Accepted Answer

All contributions are to be recorded at fair market value at the date of receipt.

Question 10

Contributions to a private not-for-profit are recorded at fair market value at the date of receipt.

Accepted Answer

Contributions to private not-for-profit organizations are recorded at fair market value at the date of receipt in accordance with generally accepted accounting principles (GAAP). This ensures that the financial statements of the organization reflect the true value of the contributions received.

Question 11

The FASB requires private not-for-profit organizations to report individual assets and liabilities separated by unrestricted,temporarily restricted and permanently restricted.

Accepted Answer

In the Statement of Financial Position, assets and liabilities are reported in order of liquidity. A classified statement may be used. Net assets must be broken down into restricted, temporarily restricted and permanently restricted classes. It is not necessary to identify which assets and liabilities are restricted.

Question 12

A private not-for-profit reports all expenses in unrestricted net asset class.

Accepted Answer

A private not-for-profit organization can report expenses in the unrestricted net asset class, as it reflects the expenses that do not have any donor-imposed restrictions or limitations. However, they may also report expenses in temporarily or permanently restricted net asset classes, depending on the nature of the expenses and the donor restrictions.

Question 13

A private not-for-profit's expenses are reported by function,program or supporting,in the Statement of Activities or in the notes.

Accepted Answer

Private not-for-profit organizations are required to report their expenses by function, program, or support in the Statement of Activities or in the notes to financial statements per the Financial Accounting Standards Board (FASB) guidelines.

Question 14

Contributions to a private not-for-profit may be restricted as to purpose or for plant acquisition,but not as to time.

Accepted Answer

Contributions to a private not-for-profit can be restricted by donors as to purpose, plant acquisition, or time.

Question 15

Country clubs and labor unions are not included in the category "other not-for-profit" organizations because they provide benefit to their members only and not to the general public.

Accepted Answer

Other not-for-profit organizations include cemetery associations, civic and fraternal organizations, labor unions, libraries, museums, other cultural institutions, performing arts organizations, political parties, private schools, professional and trade associations, social and country clubs, research and scientific organizations and religious organizations.

Question 16

The AICPA Not-for-Profit Guide applies to both governmental and nongovernmental not-for-profit organizations.

Accepted Answer

The answer of The AICPA Not-for-Profit Guide applies to both...

Question 17

Net Assets must be presented separately in the Statement of Financial Position for the three classes (unrestricted,temporarily restricted,and permanently restricted).

Accepted Answer

According to accounting standards, net assets must be presented separately in the Statement of Financial Position for the three classes: unrestricted, temporarily restricted, and permanently restricted. This provides transparency and clarity about the organization's financial resources and how they can be used or restricted.

Question 18

Private not-for-profit organizations are required to present a Statement of Functional Expenses instead of a Statement of Cash Flows,as required of businesses.

Accepted Answer

The required statements for private not-for-profit organizations are the Statement of Financial Position, Statement of Activities and Statement of Cash Flows. In addition, voluntary health and welfare organizations are required to report a Statement of Functional Expenses that shows expenses by both function and natural classification.

Question 19

If a private not-for-profit fails to comply with donor restriction on contributions received,the organization must accrue and disclose a contingent liability following FASB Statement No.5.

Accepted Answer

FASB Statement No.5 requires that contingencies be accrued and disclosed in the financial statements of a private not-for-profit organization if it fails to comply with donor restrictions on contributions received. This is done to ensure that users of the financial statements are informed about the potential impact of the contingency on the organization's financial position and results of operations.

Question 20

Examples of voluntary health and welfare organizations would include the Girl Scouts and the American Heart Association.

Accepted Answer

Voluntary health and welfare organizations are nonprofit organizations that work towards improving the health and wellbeing of individuals and communities, and rely on voluntary contributions and donations for funding. Examples include organizations like the Girl Scouts, American Heart Association, American Red Cross, and many others.

Quiz 10: Accounting for Private Not-For-Profit Organizations