V246 Midterm Exam Questions with Correct Answers Latest Update 2025/2026
The accounting concept of "Net Assets" in the context of private not-for-profit organizations in
similar to which concept in the context of accounting for business entities? - Answers Owner's
Equity
In the context of private business entities financial reporting is focused on profitability. What is
the primary focus of financial reporting in the case of public organizations? - Answers
Accountability to the public
When business entities prepare and issue financial statements GAAP rules require that they use
the accrual basis accounting. What basis of accounting is required when private not-for-profit
organizations prepare and issue financial statements? - Answers Accrual Basis
When cash and other valuable resources are contributed to a not-for-profit organization there
are two ways to categorize it. What are these two types of contributions generally called? -
Answers Private and Public
What organization has the responsibility for setting the accounting and financial reporting
standards that apply to not-for-profit organizations? - Answers Financial Accounting Standards
Board (FASB)
In the context of accounting for not-for-profit organizations what purpose does a
reclassification entry serve? - Answers To convert a donor restricted net asset to an
unrestricted net asset because the restriction has lapsed
Sometimes a donor will make a contribution of property to an organization with very strict
requirements that prohibit the gifted property from ever being sold or restricting income derived
from the property to a very specific use in perpetuity. What is the term that is commonly used to
describe such contributions? - Answers Endowment Contributions
In the case of a private not-for-profit organization the statement of activities requires total
revenues and expenses for the period to be divided into two categories. What are these two
categories called?
Net Assets Without Donor Restrictions and Net Assets With Donor Restrictions - Answers Net
Assets With Donor Restrictions
Net Assets Without Donor Restrictions
In the case of a private not-for-profit organization the statement of cash flows requires that
cash flows for the period to be divided into three categories. What are these three categories
called? - Answers Operating Activities, Investing Activities, Financing Activities
While reviewing the most recent IRS Form 990 for Bloomington House, a charitable organization
that provides medical care to homeless veterans, you see the following in Part IX (Statement of
The accounting concept of "Net Assets" in the context of private not-for-profit organizations in
similar to which concept in the context of accounting for business entities? - Answers Owner's
Equity
In the context of private business entities financial reporting is focused on profitability. What is
the primary focus of financial reporting in the case of public organizations? - Answers
Accountability to the public
When business entities prepare and issue financial statements GAAP rules require that they use
the accrual basis accounting. What basis of accounting is required when private not-for-profit
organizations prepare and issue financial statements? - Answers Accrual Basis
When cash and other valuable resources are contributed to a not-for-profit organization there
are two ways to categorize it. What are these two types of contributions generally called? -
Answers Private and Public
What organization has the responsibility for setting the accounting and financial reporting
standards that apply to not-for-profit organizations? - Answers Financial Accounting Standards
Board (FASB)
In the context of accounting for not-for-profit organizations what purpose does a
reclassification entry serve? - Answers To convert a donor restricted net asset to an
unrestricted net asset because the restriction has lapsed
Sometimes a donor will make a contribution of property to an organization with very strict
requirements that prohibit the gifted property from ever being sold or restricting income derived
from the property to a very specific use in perpetuity. What is the term that is commonly used to
describe such contributions? - Answers Endowment Contributions
In the case of a private not-for-profit organization the statement of activities requires total
revenues and expenses for the period to be divided into two categories. What are these two
categories called?
Net Assets Without Donor Restrictions and Net Assets With Donor Restrictions - Answers Net
Assets With Donor Restrictions
Net Assets Without Donor Restrictions
In the case of a private not-for-profit organization the statement of cash flows requires that
cash flows for the period to be divided into three categories. What are these three categories
called? - Answers Operating Activities, Investing Activities, Financing Activities
While reviewing the most recent IRS Form 990 for Bloomington House, a charitable organization
that provides medical care to homeless veterans, you see the following in Part IX (Statement of
