7. For nonprofit entities, reclassifications from net assets with donor restrictions to net assets without donor restrictions are reported on the statement of activities when A. Time restrictions expire. B. Purpose restrictions are satisfied. C. A and B. D. Neither A nor B.
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- 2. In accordance with ASC 958, contributions of services are recognized as increases in net assets without donor restrictions by a private, not for profit entity if which of the following criteria are satisfied? The services received create or enhance nonfinancial assets. The services require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donations The services will be performed within the current fiscal year. A) I or II B) I or III C) II or II D) I, II, IIIPlease answer with reason for all why the option is correct and why the other options are incorrect 14. According to the FASB, net assets with donor restrictions are released from restrictions: A. At the end of each fiscal year. B. As assets are spent for the purposes intended by the donor. C. When funds are returned to the donor. D. When they are reclassified to permanently restricted net assets.Donor-restricted contributions that have been given to a VHWO for the purpose of purchasing fixed assets should be recorded as increases toa. Unrestricted Net Assets.b. Temporarily Restricted Net Assets.c. Permanently Restricted Net Assets.d. Fund Balance—Restricted.
- Noncash contributions received by a not-for-profit entity should be recognized on the date received at Select one: a.fair value. b.the amount specified by the donor. c.fair value less an allowance for impairment. d.the future value of the future cash flows as of the end of the asset's estimated useful life.Fixed assets donated to a governmental unit should be recorded a. at estimated fair value when received. b. at the lower of donor’s carrying amount or estimated fair value when received. c. at the donor’s carrying amount. d. as a memorandum entry only.Which of the following is true regarding a not-for-profit organization’s reporting of gains and losses on investments purchased with permanently restricted assets?a. gains and losses can only be reported net of expenses in the statement of activities.b. unless explicitly restricted by donor or law, gains and losses should be reported in the statement of activities as increases or decreases in unrestricted net assets.c. gains may not be netted against losses in the statement of activities.d. unless explicitly restricted by donor or law, gains and losses should be reported in the statement of activities as increases or decreases in permanently restricted net assets.
- How would an entity report in its Statement of Activities restricted grants and contributions that qualify as program revenues but that may be used for either operating or capital purposes at the recipient’s discretion?Under FASB standards, expenses of a not-for-profit organization can only be shown as reductions of net assets without donor restrictions. O True O FalseWhat is the primary difference between revenue grants and capital grants in accounting for government grants? A. Revenue grants are recognized in the income statement immediately, while capital grants are recognized as deferred income. B. Revenue grants are used for long-term asset acquisition, while capital grants support day-to-day operating activities. C. Both revenue and capital grants are recognized in the income statement immediately. D. Capital grants are not accounted for in financial statements.
- The new standard for private not-for-profit entities, ASU 2016-14, changes the subdivisions of net assets Select one: a.from without donor restrictions and with donor restrictions to temporary and permanent. b.from unrestricted, temporarily restricted, and permanently restricted to without donor restrictions and with donor restrictions. c.from current and noncurrent to restricted and unrestricted. d.from without donor restrictions and with donor restrictions to operating, investing, and financing.Which of the following is needed for a fiduciary relationship to exist? Multiple Choice The assets are controlled by outside entities. The assets are derived from the reporting entity’s own revenues, which are used to benefit others. The assets are for the benefit of individuals and/or entities that are not part of the reporting entity. The assets are derived from a pass-through grant for which the reporting entity has administrative responsibility.What is the purpose of a special revenue fund? Choose the correct.a. To account for revenues legally or externally restricted as an operating expenditure.b. To account for ongoing activities.c. To account for gifts when only subsequently earned income can be expended.d. To account for the cost of long-lived assets bought with designated funds.
