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ch12 - Chapter 12 Not-for-Profit Organizations...

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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 3. FASB requires external financial reports to provide information about
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