©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Accounting for NFP Exam 1 Questions And
Answers |Latest 2025 | Guaranteed Pass.
The Maryville Cultural Center recently conducted a successful talent show in which local talent
performed for a nominal prize. The talent show is an ongoing major event and is central to the
center's mission. The event raised $4,800 in gross revenue. Expenses related to the event
included $1,000 to rent an auditorium, $1,200 to advertise the event, $500 for trophies and
other awards for the winner and the runners up, and $100 for printing and mailing tickets. The
center believes there was no monetary value received by donors (attendees). To report this
event in its statement of activities, the center will report - Answer✔$4,800 in special event
revenue
$1,500 in special event expenses (rent and trophies)
$1,300 in fund-raising expenses (advertising and printing)
Many not-for-profit organizations attempt to classify fund-raising expenses as program services
expenses by making the activities look educational in nature or advocating for the mission of
the organization. For such expenses to be reported as program services expenses, they must
meet which of the following three criteria: - Answer✔purpose, audience, content
Save Our Beaches, an NFP organization, prepared and distributed a trifold flyer to individuals
and families at White Sands Beach, a popular beach for both residents and tourists. The flyer
provided information about beach pollution and invited the public to participate in the
organization's semiannual beach cleanup. In addition, one segment of the flyer solicited
contributions to the organization to help fund its activities. The cost of the flyer and its
distribution would most likely be considered - Answer✔both fund-raising and program costs
1|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
A particular organization functions as an intermediary between donors and other beneficiary
organizations. The intermediary organization must report contribution revenue from donors if -
Answer✔the organization has variance power
Volunteers contributed services to the symphony that had a fair value of $50,000. The services
provided by the volunteers did not require specialized skills. Under what condition should the
symphony recognize the fair value of the contributed services received? - Answer✔will be
recognized if they create or enhance a non-financial asset
On December 31, Ecology Center, a nongovernment not-for-profit organization, received an
unconditional pledge of $125,000 to be received in three years. The Ecology Center is confident
that it will collect the entire $125,000. The Ecology Center uses the present value technique
when measuring fair value. How should the Ecology Center record the pledge? - Answer✔net
contribution receivable and contribution with donor restrictions
Lifeworks is a nongovernment not-for-profit organization that recently received a large gift
from a donor in the amount of $3,000,000 in cash. The donor wishes to leave a legacy and
therefore specified that Lifeworks cannot spend the $3,000,000 but can invest the $3,000,000
and use any earnings from the investments to support the organization. In the first year,
$100,000 was earned but has not yet been spent. How would the $3,000,000 gift and the
$100,000 in earnings impact the net assets of Lifeworks? - Answer✔3 million increases net
assets with donor restrictions
100,000 increases net assets without donor restrictions
The Shannon Community Kitchen provides hot meals to homeless and low-income individuals
and families; it is the organization's only program. It is the policy of the community kitchen to
use restricted resources for which the purpose has been met before resources without donor
restrictions. The Kitchen had the following revenue and expense transactions during the 2020
fiscal year.
1) Cash donations without donor restrictions of $25,000 were received. A local philanthropist
also contributed $3,000, which was to be used for the purchase of Thanksgiving dinner
foodstuffs.
2|P a g e
Accounting for NFP Exam 1 Questions And
Answers |Latest 2025 | Guaranteed Pass.
The Maryville Cultural Center recently conducted a successful talent show in which local talent
performed for a nominal prize. The talent show is an ongoing major event and is central to the
center's mission. The event raised $4,800 in gross revenue. Expenses related to the event
included $1,000 to rent an auditorium, $1,200 to advertise the event, $500 for trophies and
other awards for the winner and the runners up, and $100 for printing and mailing tickets. The
center believes there was no monetary value received by donors (attendees). To report this
event in its statement of activities, the center will report - Answer✔$4,800 in special event
revenue
$1,500 in special event expenses (rent and trophies)
$1,300 in fund-raising expenses (advertising and printing)
Many not-for-profit organizations attempt to classify fund-raising expenses as program services
expenses by making the activities look educational in nature or advocating for the mission of
the organization. For such expenses to be reported as program services expenses, they must
meet which of the following three criteria: - Answer✔purpose, audience, content
Save Our Beaches, an NFP organization, prepared and distributed a trifold flyer to individuals
and families at White Sands Beach, a popular beach for both residents and tourists. The flyer
provided information about beach pollution and invited the public to participate in the
organization's semiannual beach cleanup. In addition, one segment of the flyer solicited
contributions to the organization to help fund its activities. The cost of the flyer and its
distribution would most likely be considered - Answer✔both fund-raising and program costs
1|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
A particular organization functions as an intermediary between donors and other beneficiary
organizations. The intermediary organization must report contribution revenue from donors if -
Answer✔the organization has variance power
Volunteers contributed services to the symphony that had a fair value of $50,000. The services
provided by the volunteers did not require specialized skills. Under what condition should the
symphony recognize the fair value of the contributed services received? - Answer✔will be
recognized if they create or enhance a non-financial asset
On December 31, Ecology Center, a nongovernment not-for-profit organization, received an
unconditional pledge of $125,000 to be received in three years. The Ecology Center is confident
that it will collect the entire $125,000. The Ecology Center uses the present value technique
when measuring fair value. How should the Ecology Center record the pledge? - Answer✔net
contribution receivable and contribution with donor restrictions
Lifeworks is a nongovernment not-for-profit organization that recently received a large gift
from a donor in the amount of $3,000,000 in cash. The donor wishes to leave a legacy and
therefore specified that Lifeworks cannot spend the $3,000,000 but can invest the $3,000,000
and use any earnings from the investments to support the organization. In the first year,
$100,000 was earned but has not yet been spent. How would the $3,000,000 gift and the
$100,000 in earnings impact the net assets of Lifeworks? - Answer✔3 million increases net
assets with donor restrictions
100,000 increases net assets without donor restrictions
The Shannon Community Kitchen provides hot meals to homeless and low-income individuals
and families; it is the organization's only program. It is the policy of the community kitchen to
use restricted resources for which the purpose has been met before resources without donor
restrictions. The Kitchen had the following revenue and expense transactions during the 2020
fiscal year.
1) Cash donations without donor restrictions of $25,000 were received. A local philanthropist
also contributed $3,000, which was to be used for the purchase of Thanksgiving dinner
foodstuffs.
2|P a g e
