AICPA-Final UPDATED ACTUAL Questions and CORRECT Answers
1. When should a conditional pledge to a nongovern- C. When the pledge condi-
mental not-for-profit organization be recognized as tions are met.
revenue?
A. Immediately.
B. When the cash is received.
C. When the pledge conditions are met.
D. At the beginning of the next fiscal period.
2. What is the appropriate characterization of the net A. Residual interest.
assets of a nongovernmental not-for-profit organiza-
tion?
A. Residual interest.
B. Ownership interest.
C. Donor's interest.
D. Equity interest.
3. A nongovernmental, not-for-profit organization had A. $24,850
the following investments:
Investment
Bonds
Stock A (100 shares) Stock B (200 shares)
Cost
$9,900
$50 per share $40 per share
Fair Value (Beginning of Year)
$10,000 $45 $41
Fair Value (End of Year)
$9,950 $51 $49
What amount should be the total value of investments
reported in the year-end statement of financial posi-
tion?
, A. $24,850
B. $24,800
C. $23,800
D. $22,900
4. The purpose of a statement of financial position for C. The assets, liabilities,
a nongovernmental not-for-profit entity is to provide and net assets, and about
relevant information about their relationships to one
A. The cash receipts and cash payments during a peri- another at a moment in
od in time. time.
B. The effects of transactions and other events and
circumstances that change the amount and nature of
net assets.
C. The assets, liabilities, and net assets, and about their
relationships to one another at a moment in time.
D. The changes in permanently restricted net assets,
temporarily restricted net assets, and unrestricted net
assets for a period of time.
5. The net asset reclassifications of a nongovernmen- B. Statement of activities.
tal not-for-profit organization would be reported on
which of the following?
A. Statement of financial position.
B. Statement of activities.
C. Statement of cash flows.
D. Statement of functional expenses.
6. The Cats and Dogs League was organized as a non- A. As temporarily restricted
governmental not-for-profit organization. The League support of the present val-
received a pledge of $10,000 to be used to build an ad- ue of $10,000.
dition to the kennel. This donation will not be received
for three years. How should this pledge be recorded?
, A. As temporarily restricted support of the present
value of $10,000.
B. As temporarily restricted support of $10,000.
C. As a conditional promise to give of $10,000.
D. It should not be accounted for until it is received
7. A donor provided a $10 million gift for a specific B. Permanently restricted
program to a nongovernmental, not-for-profit orga- net assets.
nization. The organization cannot spend the $10 mil-
lion, but it may use the income on the gift for the
donor-specified program. In the organization's state-
ment of activities, the gift should be reported as part
of the change in
A. Temporarily restricted net assets.
B. Permanently restricted net assets.
C. Restricted - nonspendable.
D. Unrestricted net assets.
8. During the current year, a nongovernmental, C. $10,150,000
not-for-profit hospital received a gift of $10 million to
be used for an addition to the physical therapy unit.
In addition, the hospital also received an investment
valued at $3 million with a donor-imposed restriction
allowing only the use of the investment earnings for
paying the salary of an additional physical therapist. As
of the end of the current year, a physical therapist had
not been hired, and earnings on the investment for the
year were $150,000. What amount should be reported
as temporarily restricted net assets in the year-end
statement of financial position?
A. $150,000
B. $10,000,000
1. When should a conditional pledge to a nongovern- C. When the pledge condi-
mental not-for-profit organization be recognized as tions are met.
revenue?
A. Immediately.
B. When the cash is received.
C. When the pledge conditions are met.
D. At the beginning of the next fiscal period.
2. What is the appropriate characterization of the net A. Residual interest.
assets of a nongovernmental not-for-profit organiza-
tion?
A. Residual interest.
B. Ownership interest.
C. Donor's interest.
D. Equity interest.
3. A nongovernmental, not-for-profit organization had A. $24,850
the following investments:
Investment
Bonds
Stock A (100 shares) Stock B (200 shares)
Cost
$9,900
$50 per share $40 per share
Fair Value (Beginning of Year)
$10,000 $45 $41
Fair Value (End of Year)
$9,950 $51 $49
What amount should be the total value of investments
reported in the year-end statement of financial posi-
tion?
, A. $24,850
B. $24,800
C. $23,800
D. $22,900
4. The purpose of a statement of financial position for C. The assets, liabilities,
a nongovernmental not-for-profit entity is to provide and net assets, and about
relevant information about their relationships to one
A. The cash receipts and cash payments during a peri- another at a moment in
od in time. time.
B. The effects of transactions and other events and
circumstances that change the amount and nature of
net assets.
C. The assets, liabilities, and net assets, and about their
relationships to one another at a moment in time.
D. The changes in permanently restricted net assets,
temporarily restricted net assets, and unrestricted net
assets for a period of time.
5. The net asset reclassifications of a nongovernmen- B. Statement of activities.
tal not-for-profit organization would be reported on
which of the following?
A. Statement of financial position.
B. Statement of activities.
C. Statement of cash flows.
D. Statement of functional expenses.
6. The Cats and Dogs League was organized as a non- A. As temporarily restricted
governmental not-for-profit organization. The League support of the present val-
received a pledge of $10,000 to be used to build an ad- ue of $10,000.
dition to the kennel. This donation will not be received
for three years. How should this pledge be recorded?
, A. As temporarily restricted support of the present
value of $10,000.
B. As temporarily restricted support of $10,000.
C. As a conditional promise to give of $10,000.
D. It should not be accounted for until it is received
7. A donor provided a $10 million gift for a specific B. Permanently restricted
program to a nongovernmental, not-for-profit orga- net assets.
nization. The organization cannot spend the $10 mil-
lion, but it may use the income on the gift for the
donor-specified program. In the organization's state-
ment of activities, the gift should be reported as part
of the change in
A. Temporarily restricted net assets.
B. Permanently restricted net assets.
C. Restricted - nonspendable.
D. Unrestricted net assets.
8. During the current year, a nongovernmental, C. $10,150,000
not-for-profit hospital received a gift of $10 million to
be used for an addition to the physical therapy unit.
In addition, the hospital also received an investment
valued at $3 million with a donor-imposed restriction
allowing only the use of the investment earnings for
paying the salary of an additional physical therapist. As
of the end of the current year, a physical therapist had
not been hired, and earnings on the investment for the
year were $150,000. What amount should be reported
as temporarily restricted net assets in the year-end
statement of financial position?
A. $150,000
B. $10,000,000
