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NFP 1.2 Exam Questions And Answers
|Latest 2025 | Guaranteed Pass.
A not-for-profit (NFP) organization acting as a financial intermediary receives a contribution.
Under the FASB Codification the NFP would be most likely to recognize the contribution as a
liability under which of the following situations?
Multiple Choice
The NFP has variance power.
The NFP is acting as an agent, receiving the contribution on behalf of another organization.
The NFP is financially interrelated with the organization on whose behalf it received the
contribution.
The NFP has a 51 percent interest in the organization on whose behalf it received the
contribution. - Answer✔The NFP is acting as an agent, receiving the contribution on behalf of
another organization.
According to the FASB, net assets with donor restrictions are released from restrictions:
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Multiple Choice
At the end of each fiscal year.
As assets are spent for the purposes intended by the donor.
When funds are returned to the donor.
When all donor conditions have been met. - Answer✔As assets are spent for the purposes
intended by the donor.
A local philanthropist made an unconditional pledge to donate $100,000 to a not-for-profit
organization to be paid in five equal installments of $20,000 beginning in two years. Under
FASB standards the pledge would be recognized as:
Multiple Choice
A contribution of $20,000 in each of the five years a contribution is made.
A contribution of $100,000 in the year the pledge is made, adjusted for the estimated
uncollectible amount.
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Deferred support of $100,000 in the year the pledge was made.
A contribution of $100,000 in the year the pledge was made, discounted for the difference
between the pledge and its present value. - Answer✔A contribution of $100,000 in the year the
pledge was made, discounted for the difference between the pledge and its present value.
Which of the following statements is correct regarding reporting of special events and related
direct costs under current FASB standards?
Multiple Choice
Special events and related direct costs must be reported separately at their gross amounts if
they relate to the ongoing major operations of a not-for-profit.
Special events revenues are to be reported at gross amounts, even if direct costs are of a
peripheral or incidental nature.
With few exceptions special events revenues are reported net of related direct costs.
Expenses of promoting and conducting special events should be netted directly against special
events revenue. - Answer✔Special events and related direct costs must be reported separately
at their gross amounts if they relate to the ongoing major operations of a not-for-profit.
A not-for-profit organization incurred $10,000 in management and general expenses in the
current fiscal year. When reporting the expenses by function, the $10,000 would be reported
as:
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NFP 1.2 Exam Questions And Answers
|Latest 2025 | Guaranteed Pass.
A not-for-profit (NFP) organization acting as a financial intermediary receives a contribution.
Under the FASB Codification the NFP would be most likely to recognize the contribution as a
liability under which of the following situations?
Multiple Choice
The NFP has variance power.
The NFP is acting as an agent, receiving the contribution on behalf of another organization.
The NFP is financially interrelated with the organization on whose behalf it received the
contribution.
The NFP has a 51 percent interest in the organization on whose behalf it received the
contribution. - Answer✔The NFP is acting as an agent, receiving the contribution on behalf of
another organization.
According to the FASB, net assets with donor restrictions are released from restrictions:
1|P a g e
, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Multiple Choice
At the end of each fiscal year.
As assets are spent for the purposes intended by the donor.
When funds are returned to the donor.
When all donor conditions have been met. - Answer✔As assets are spent for the purposes
intended by the donor.
A local philanthropist made an unconditional pledge to donate $100,000 to a not-for-profit
organization to be paid in five equal installments of $20,000 beginning in two years. Under
FASB standards the pledge would be recognized as:
Multiple Choice
A contribution of $20,000 in each of the five years a contribution is made.
A contribution of $100,000 in the year the pledge is made, adjusted for the estimated
uncollectible amount.
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, ©BRIGHTSTARS 2025 ALL RIGHTS RESERVED 11:22 AM A+
Deferred support of $100,000 in the year the pledge was made.
A contribution of $100,000 in the year the pledge was made, discounted for the difference
between the pledge and its present value. - Answer✔A contribution of $100,000 in the year the
pledge was made, discounted for the difference between the pledge and its present value.
Which of the following statements is correct regarding reporting of special events and related
direct costs under current FASB standards?
Multiple Choice
Special events and related direct costs must be reported separately at their gross amounts if
they relate to the ongoing major operations of a not-for-profit.
Special events revenues are to be reported at gross amounts, even if direct costs are of a
peripheral or incidental nature.
With few exceptions special events revenues are reported net of related direct costs.
Expenses of promoting and conducting special events should be netted directly against special
events revenue. - Answer✔Special events and related direct costs must be reported separately
at their gross amounts if they relate to the ongoing major operations of a not-for-profit.
A not-for-profit organization incurred $10,000 in management and general expenses in the
current fiscal year. When reporting the expenses by function, the $10,000 would be reported
as:
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