Under GAAP, for nonprofit, nongovernmental entities, an unconditional transfer of cash or other assets to an entity, or a settlement or cancellation of its liabilities in a voluntary, non-reciprocal transfer, is called a(n) A) unconditional promise to give. B) contribution. C) conditional promise to give. D) residual equity transfer.

Under GAAP, for nonprofit, nongovernmental entities, an unconditional transfer of cash or other assets to an entity, or a settlement or cancellation of its liabilities in a voluntary, non-reciprocal transfer, is called a(n) A) unconditional promise to give. B) contribution. C) conditional promise to give. D) residual equity transfer.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 1MC: A donated fixed asset (from a governmental unit) for which the fair value has been determined should...

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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.
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.
Negotiable instruments are transferable in nature, allowing the holder to take the funds as cash or use them in a manner appropriate for the transaction or according to their preference. The fund amount listed on the document includes a notation as to the specific amount promised and must be paid in full either on-demand or at a specified time. A negotiable instrument can be transferred from one person to another. Once the instrument is transferred, the holder obtains a full legal title to the instrument. Give some examples of negotiable instruments and discuss any two instruments in detail by mentioning their importance in current business scenario.
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.
Unconditional transfers of cash or other resources to an entity in a voluntary, nonreciprocal transaction should be recognized as Select one: a.non-operating gains. b. revenue. c.other comprehensive income. d. liabilities.
Which of the following statements in incorrect? a. Donations of PPE should be recorded at the fair value of the donated asset at the time of donation. b. Property acquired in exchange for shares or other securities in the enterprise should be recorded at its fair value or the fair value of the securities, whichever is more clearly evident c. When property is acquired in exchange for another asset without commercial substance, no gain nor loss is recognized d. When a group of assets is acquired for a lump sum price, the total cost should be allocated to the individual assets based on their carrying amounts.
A donated fixed asset (from a governmental unit) for which the fair value has been determined should be recorded as a debit to Fixed Assets and a credit to: a. Contributed Capital b. Retained Earnings c. Deferred Income d. Other Income
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.
All of the following statements are true, except: When property is acquired in exchange for another, its cost is usually determined by reference to the fair value of the asset surrendered When a group of assets is acquired for a lump sum price, the lump sum price should be allocated to the individual assets based on their carrying values. Donation of PPE should be recorded at the fair value of the donated asset Property acquired in exchange for shares or other securities of the enterprise should be recorded at its fair value or the fair value of the securities, whichever is more clearly evident
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, III
How should a nongovernmental, not-for-profit organization report contributions without donor‘s restriction in its statement of cash flows A.) Operating activity inflow. B.) Investing activity inflow. C.) Financing activity inflow. D.) As a noncash transaction.
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.