ACC 407 TEST 3 QUESTIONS AND CORRECT ANSWERS

ACC 407 TEST 3 QUESTIONS AND
CORRECT ANSWERS
WhichA2ofA2theA2followingA2isA2ordinarilyA2notA2consideredA2oneA2ofA2theA2majorA2distingui
shingA2characteristicsA2ofA2not-for-profitA2entities?A2-A2Ans--
PerformanceA2indicatorsA2similarA2toA2aA2businessA2enterprise'sA2profitA2areA2readilyA2avai
lable.

WhichA2ofA2theA2followingA2isA2aA2characteristicA2ofA2nongovernmentalA2not-for-
profitA2entities?A2-A2Ans--
BothA2NFPsA2andA2businessA2entitiesA2useA2scarceA2resourcesA2inA2theA2productionA2and
A2distributionA2ofA2goodsA2andA2services.


NetA2assetsA2isA2anA2elementA2ofA2theA2financialA2statementsA2ofA2nongovernmentalA2not-
for-profitA2entitiesA2(NFPs).A2ItA2-A2Ans--
IsA2theA2residualA2interestA2inA2theA2assetsA2ofA2anA2NFPA2afterA2subtractingA2itsA2liabilities
.

ForA2externalA2reportingA2purposes,A2theA2not-for-
profitA2reportingA2modelA2requiresA2informationA2aboutA2-A2Ans--
TheA2entityA2asA2aA2wholeA2butA2notA2aboutA2individualA2funds.

TheA2guidanceA2forA2reportingA2theA2financialA2statementsA2ofA2nongovernmentalA2not-
for-profitA2entitiesA2focusesA2onA2-A2Ans--
BasicA2informationA2forA2theA2entityA2asA2aA2whole.

ForkinA2Manor,A2aA2nongovernmentalA2not-for-
profitA2entityA2(NFP),A2wantsA2toA2reformatA2itsA2financialA2statementsA2usingA2terminology
A2thatA2isA2moreA2readilyA2associatedA2withA2for-
profitA2entities.A2TheA2directorA2believesA2thatA2theA2termA2"operatingA2profit"A2andA2theA2p
racticeA2ofA2segregatingA2recurringA2andA2nonrecurringA2itemsA2moreA2accuratelyA2depictA
2theA2NFP'sA2activities.A2UnderA2whatA2conditionA2willA2ForkinA2beA2allowedA2toA2useA2"op
eratingA2profit"A2andA2toA2segregateA2itsA2recurringA2itemsA2fromA2itsA2nonrecurringA2items
A2inA2itsA2statementA2ofA2activities?A2-A2Ans--
TheA2NFPA2reportsA2theA2changeA2inA2netA2assetsA2withoutA2donorA2restrictionsA2forA2theA2
period.

InA2aA2statementA2ofA2financialA2position,A2aA2nongovernmentalA2not-for-
profitA2entityA2mustA2atA2aA2minimumA2reportA2amountsA2forA2whichA2ofA2theA2followingA2cl
assesA2ofA2netA2assets?
IA2withoutA2donorA2restrictions
IIA2withA2donorA2restrictions
IIIA2PermanentlyA2restrictedA2-A2Ans--IA2andA2IIA2only

, InA2YearA23,A2Gamma,A2aA2nongovernmentalA2not-for-
profitA2entity,A2depositedA2atA2aA2bankA2$1A2millionA2givenA2toA2itA2byA2aA2donorA2toA2purch
aseA2endowmentA2securities.A2TheA2securitiesA2wereA2purchasedA2JanuaryA22,A2YearA24.A
2AtA2DecemberA231,A2YearA23,A2theA2bankA2recordedA2$2,000A2interestA2onA2theA2deposit.
A2InA2accordanceA2withA2theA2bequest,A2thisA2$2,000A2wasA2usedA2toA2financeA2ongoingA2
programA2expensesA2inA2MarchA2YearA24.A2AtA2DecemberA231,A2YearA23,A2whatA2amountA
2ofA2theA2bankA2balanceA2shouldA2beA2includedA2asA2currentA2assetsA2inA2Gamma'sA2class
ifiedA2statementA2ofA2financialA2position?A2-A2Ans--$2,000

Pharm,A2aA2nongovernmentalA2not-for-profitA2entity,A2isA2preparingA2itsA2year-
endA2financialA2statements.A2WhichA2ofA2theA2followingA2statementsA2isA2required?A2-
A2Ans--StatementA2ofA2cashA2flows.


ForA2whichA2ofA2theA2followingA2assetsA2heldA2byA2aA2religiousA2entityA2shouldA2depreciati
onA2beA2recognizedA2inA2theA2entity'sA2generalA2purposeA2externalA2financialA2statements
?A2-A2Ans--TheA2houseA2ofA2worship.

FunctionalA2expensesA2recordedA2inA2theA2generalA2ledgerA2ofA2ABC,A2aA2nongovernment
alA2not-for-profitA2entity,A2areA2asA2follows:A2
SolicitingA2prospectiveA2membersA2$45,000A2
PrintingA2membershipA2benefitsA2brochuresA230,000
A2SolicitingA2membershipA2duesA225,000A2
MaintainingA2donorA2list.A210,000A2
WhatA2amountA2shouldA2ABCA2reportA2asA2fundraisingA2expenses?A2-A2Ans--A.$10.000

ForA2theA2fallA2semesterA2ofA2theA2currentA2year,A2MicanopyA2University,A2aA2privateA2not-
for-
profitA2institution,A2assessedA2itsA2studentsA2$3,000,000A2forA2tuitionA2andA2fees.A2TheA2n
etA2amountA2realizedA2wasA2onlyA2$2,500,000A2becauseA2scholarshipsA2ofA2$400,000A2w
ereA2grantedA2toA2studentsA2andA2tuitionA2remissionsA2ofA2$100,000A2wereA2allowedA2toA2f
acultyA2members'A2childrenA2attendingA2Micanopy.A2WhatA2amountA2shouldA2MicanopyA2r
eportA2forA2theA2periodA2asA2revenuesA2forA2tuitionA2andA2fees?A2-A2Ans--$3,000,000

HealthA2PolicyA2FoundationA2(HPF),A2aA2voluntaryA2oalthA2andA2welfareA2entityA2supporte
dA2byA2contributionsA2fromA2theA2generalA2public,A2includedA2theA2followingA2costsA2nA2itsA
2statementA2ofA2functionalA2expensesA2forA2theA2year:A2FundraisingA2$1,000,000A2Admini
strativeA2(includingA2dataA2processing)A2600,000A2ResearchA2200,000A2HPF'sA2functional
A2expensesA2forA2programA2servicesA2includedA2-A2Ans--$200,000


CancerA2Educators,A2aA2nongovernmentalA2not-for-
profitA2entity,A2incurredA2costsA2ofA2$10,000A2inA2itsA2combinedA2programA2servicesA2andA
2fundraisingA2activities.A2WhichA2ofA2theA2followingA2costA2allocationsA2mightA2CancerA2Ed
ucatorsA2reportA2inA2itsA2statementA2ofA2activities?A2-A2Ans--ProgramA2services:A2$6,000
Fundraising:A2$4,000
GeneralA2Services:A2$0