AICPA-Final Exam Questions with Correct
Answers
When should a conditional pledge to a nongovernmental not-for-profit organization be
recognized as 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.
C. When the pledge conditions are met.
What is the appropriate characterization of the net assets of a nongovernmental not-for-
profit organization?
A. Residual interest.
B. Ownership interest.
C. Donor's interest.
D. Equity interest.
A. Residual interest.
A nongovernmental, not-for-profit organization had 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 position?
A. $24,850
B. $24,800
C. $23,800
D. $22,900
A. $24,850
The purpose of a statement of financial position for a nongovernmental not-for-profit
entity is to provide relevant information about
A. The cash receipts and cash payments during a period in 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.
C. The assets, liabilities, and net assets, and about their relationships to one another at a
moment in time.
The net asset reclassifications of a nongovernmental 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.
B. Statement of activities.
The Cats and Dogs League was organized as a nongovernmental not-for-profit
organization. The League received a pledge of $10,000 to be used to build an addition 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
A. As temporarily restricted support of the present value of $10,000.
A donor provided a $10 million gift for a specific program to a nongovernmental, not-
for-profit organization. The organization cannot spend the $10 million, but it may use
the income on the gift for the donor-specified program. In the organization's statement
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.
B. Permanently restricted net assets.
Answers
When should a conditional pledge to a nongovernmental not-for-profit organization be
recognized as 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.
C. When the pledge conditions are met.
What is the appropriate characterization of the net assets of a nongovernmental not-for-
profit organization?
A. Residual interest.
B. Ownership interest.
C. Donor's interest.
D. Equity interest.
A. Residual interest.
A nongovernmental, not-for-profit organization had 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 position?
A. $24,850
B. $24,800
C. $23,800
D. $22,900
A. $24,850
The purpose of a statement of financial position for a nongovernmental not-for-profit
entity is to provide relevant information about
A. The cash receipts and cash payments during a period in 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.
C. The assets, liabilities, and net assets, and about their relationships to one another at a
moment in time.
The net asset reclassifications of a nongovernmental 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.
B. Statement of activities.
The Cats and Dogs League was organized as a nongovernmental not-for-profit
organization. The League received a pledge of $10,000 to be used to build an addition 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
A. As temporarily restricted support of the present value of $10,000.
A donor provided a $10 million gift for a specific program to a nongovernmental, not-
for-profit organization. The organization cannot spend the $10 million, but it may use
the income on the gift for the donor-specified program. In the organization's statement
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.
B. Permanently restricted net assets.
