GOVERNMENT AND NOT-FOR-PROFIT
ACCOUNTING CONCEPTS AND PRACTICES
8TH EDITION MICHAEL GRANOF SALEHA
KHUMAWALA THAD CALABRESE DANIEL
SOLUTION MANUAL CERTIFICATION
REVIEW SET 2026 ANSWERS GUARANTEED
PASS
⫸ According to the FASB, how should unrealized gains on the
investment portfolio of a not-for-profit organization be recognized?
A. Not recognized.
B. Reported in the net asset section of the balance sheet.
C. Reported according to whether the gains relate to trading, available-
for-sale, or held-to-maturity assets.
D. Reported on the statement of activities. Answer: D. Reported on the
statement of activities.
⫸ A not-for-profit organization that follows FASB standards must
display the changes in all classes of net assets on which of the following
statements?
A. Statement of activities.
B. Statement of financial position.
, C. Statement of cash flows.
D. Statement of functional expenses. Answer: A. Statement of activities.
⫸ How does the FASB require not-for-profit organizations to report
expenses?
A. Natural classification, such as salaries, rent, and supplies.
B. Functional classification, such as program and support.
C. Management has the option of reporting using natural classification
or functional classification.
D. Both natural classification and functional classification must be
reported, one must be recognized on the face of the financial statements
and one is reported in the notes to the financial statements. Answer: B.
Functional classification, such as program and support.
⫸ A local CPA volunteered his time to help install and test new
computer accounting system software for an after-school development
organization that serves disadvantaged children. If the services had not
been donated the organization would have had to hire a consultant to
install the system. In accordance with the FASB Codification, the value
of the CPA's time devoted to helping the organization should be
recorded as:
A. Contribution-Temporarily Restricted.
B. Program Expense.
C. Machinery & Equipment.
ACCOUNTING CONCEPTS AND PRACTICES
8TH EDITION MICHAEL GRANOF SALEHA
KHUMAWALA THAD CALABRESE DANIEL
SOLUTION MANUAL CERTIFICATION
REVIEW SET 2026 ANSWERS GUARANTEED
PASS
⫸ According to the FASB, how should unrealized gains on the
investment portfolio of a not-for-profit organization be recognized?
A. Not recognized.
B. Reported in the net asset section of the balance sheet.
C. Reported according to whether the gains relate to trading, available-
for-sale, or held-to-maturity assets.
D. Reported on the statement of activities. Answer: D. Reported on the
statement of activities.
⫸ A not-for-profit organization that follows FASB standards must
display the changes in all classes of net assets on which of the following
statements?
A. Statement of activities.
B. Statement of financial position.
, C. Statement of cash flows.
D. Statement of functional expenses. Answer: A. Statement of activities.
⫸ How does the FASB require not-for-profit organizations to report
expenses?
A. Natural classification, such as salaries, rent, and supplies.
B. Functional classification, such as program and support.
C. Management has the option of reporting using natural classification
or functional classification.
D. Both natural classification and functional classification must be
reported, one must be recognized on the face of the financial statements
and one is reported in the notes to the financial statements. Answer: B.
Functional classification, such as program and support.
⫸ A local CPA volunteered his time to help install and test new
computer accounting system software for an after-school development
organization that serves disadvantaged children. If the services had not
been donated the organization would have had to hire a consultant to
install the system. In accordance with the FASB Codification, the value
of the CPA's time devoted to helping the organization should be
recorded as:
A. Contribution-Temporarily Restricted.
B. Program Expense.
C. Machinery & Equipment.
