ch12 - Chapter 12 Not-for-Profit Organizations TRUE/FALSE...

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ch12 Page 1 Chapter 12 Not-for-Profit Organizations TRUE/FALSE (CHAPTER 12) 1. FASB Statement No. 117 directs that revenues and expenses be reported in a statement of financial position. 2. In the statement of activities, FASB Statement No. 117 requires revenues to be reported as increases in one of the three categories of net assets, depending on donor-imposed restrictions; however, all expenses should be reported as decreases in unrestricted net assets. 3. Restricted contributions may be reported as unrestricted if the restriction has been met in the same period as the contribution is made. 4. FASB Statement No. 95 requires not-for-profits to use the direct method in their statements of cash flows. 5. In accounting for investments, not-for-profits, like businesses, must report their investments at fair value and classify the investments as either trading, available-for-sale, or held-to- maturity. 6. FASB Statement No. 93 makes the recognition of depreciation on plant and equipment assets optional at the discretion of the not-for-profit. 7. Temporarily restricted funds related to plant and equipment generally account only for resources restricted to their purchase or construction, not for the plant and equipment itself, which are typically reported in the unrestricted fund.
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ch12 Page 2 MULTIPLE CHOICE (CHAPTER 12) 1. The basis of accounting used by not-for-profit organizations in their external financial reports is a) Industry-specific basis of accounting. b) Cash basis of accounting. c) Modified accrual basis of accounting. d) Accrual basis of accounting. 2. FASB require the balance sheets of not-for-profits to display a) Net assets in four separate categories—unrestricted, temporarily restricted, permanently restricted, and restricted by creditors. b) Three separate funds—unrestricted, temporarily restricted, and permanently restricted net assets. c) Six totals—total assets, total liabilities, total net assets, total unrestricted net assets, total temporarily restricted net assets, and total permanently restricted net assets. d) Unrestricted, temporarily restricted, and permanently restricted retained earnings. 3. FASB requires external financial reports to provide information about a) Donor-imposed restrictions on resources. b) All restrictions on resources. c) Donor and creditor restrictions on resources. d) None of the above. 4. Expenses incurred by not-for-profit organizations should be reported as a) Decreases in one of the three categories of net assets. b) Decreases in unrestricted net assets. c) Decreases in temporarily restricted net assets. d) Decreases in permanently restricted net assets. 5. Revenues of a not-for-profit organization should be reported as a) Increases in one of the three categories of net assets. b)
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This note was uploaded on 12/15/2010 for the course ACCT 472 taught by Professor Dimagio during the Spring '10 term at Strayer.

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ch12 - Chapter 12 Not-for-Profit Organizations TRUE/FALSE...

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