Accounting for NFP Exam 1 Questions and
Answers|Latest Update
4) At Thanksgiving time, the Kitchen spent $4,100 on foodstuffs for preparation of the
Thanksgiving dinner. 1. Debit: Cash 28,000
Credit: Contributions with donor restrictions 3,000
Credit: Contributions without donor restrictions 25,000
2. Debit: program expenses 100
Credit: contributions without donor restrictions 100
3. Debit: cash 5,000
Credit: contributions with donor restrictions 5,000
4) Debit: program expenses 4,100
Credit: cash 4,100
4b. Debit: Net assets released-satisfaction - with DR 3,000
Credit: NA released - satisfaction - without DR 3,000
, According to the FASB Codification, which of the following is a condition that must be met for
contributed services to a not-for-profit organization (NFP) to be recorded as both a contribution
and as an expense? The service requires a specialized skill and is provided by someone
who possesses the specialized skill, such as a lawyer preparing contracts.
An example of an increase in net assets for a not-for-profit organization that would be labeled
revenue rather than support is: investment income
The FASB states that depreciation expense in a not-for-profit organization should be:
Assigned to or allocated to the functions to which it relates.
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? 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:
As assets are spent for the purposes intended by the donor.
Answers|Latest Update
4) At Thanksgiving time, the Kitchen spent $4,100 on foodstuffs for preparation of the
Thanksgiving dinner. 1. Debit: Cash 28,000
Credit: Contributions with donor restrictions 3,000
Credit: Contributions without donor restrictions 25,000
2. Debit: program expenses 100
Credit: contributions without donor restrictions 100
3. Debit: cash 5,000
Credit: contributions with donor restrictions 5,000
4) Debit: program expenses 4,100
Credit: cash 4,100
4b. Debit: Net assets released-satisfaction - with DR 3,000
Credit: NA released - satisfaction - without DR 3,000
, According to the FASB Codification, which of the following is a condition that must be met for
contributed services to a not-for-profit organization (NFP) to be recorded as both a contribution
and as an expense? The service requires a specialized skill and is provided by someone
who possesses the specialized skill, such as a lawyer preparing contracts.
An example of an increase in net assets for a not-for-profit organization that would be labeled
revenue rather than support is: investment income
The FASB states that depreciation expense in a not-for-profit organization should be:
Assigned to or allocated to the functions to which it relates.
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? 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:
As assets are spent for the purposes intended by the donor.
