Technological Institute of the Philippines

Quiz 4
1. A statement of functional expenses is required for which one of the following private nonprofit
organizations?
a. Colleges. b. Hospitals. c. Voluntary health and welfare organizations.
d.
Performing
arts
organizations.
2. The statement of financial position (balance sheet) for Founders Library, a private nonprofit organization,
should report separate dollar amounts for the librarys net assets according to which of the following
classifications?
a. Unrestricted and permanently restricted.
b. Temporarily restricted and permanently restricted.
c. Unrestricted and temporarily restricted.
d. Unrestricted, temporarily restricted, and permanently restricted.
3. Chicago Museum, a private nonprofit organization, has both regular and term endowments. On the
museums statement of financial position (balance sheet), how should the net assets of each type of
endowment be reported?
Term endowments Regular endowments
a. Temporarily restricted Permanently restricted
b. Permanently restricted Permanently restricted
c. Unrestricted Temporarily restricted
d. Temporarily restricted Temporarily restricted
4. Kerry College, a private not-for-profit college, received $25,000 from Ms. Mary Smith on April 30, 2009. Ms.
Smith stipulated that her contribution be used to support faculty research during the fiscal year beginning on
July 1, 2009. On July 15, 2009, administrators of Kerry awarded research grants totaling $25,000 to several
faculty in accordance with the wishes of Ms. Smith. For the year ended June 30, 2009, Kerry College should
report the $25,000 contribution as
a. Temporarily restricted revenues on the statement of activities.
b. Unrestricted revenue on the statement of activities.
c. Temporarily restricted deferred revenue on the statement of activities.
d. An increase in fund balance on the statement of financial position.
5. Good Hope, a private not-for-profit voluntary health and welfare organization, received a cash donation of
$500,000 from Mr. Charles Peobody on November 15, 2009. Mr. Peobody directed that his donation be used to
acquire equipment for the organization. Good Hope used the donation to acquire equipment costing $500,000
in January of 2010. For the year ended December 31, 2009, Good Hope should report the $500,000
contribution on its
a. Statement of activities as unrestricted revenue.
b. Statement of financial position as temporarily restricted deferred revenue.
c. Statement of financial position as unrestricted deferred revenue.
d. Statement of activities as temporarily restricted revenue.
6. On the statement of activities for a private not-for-profit performing arts center, expenses should be
deducted from
I. Unrestricted revenues.
II. Temporarily restricted revenues. III. Permanently restricted revenues.
a. I, II, and III.
b. Both I and II.
c. I only.
d. II only.
7. Albert University, a private not-for-profit university, had the following cash inflows during the year ended
June 30, 2009:
I. $500,000 from students for tuition.
II. $300,000 from a donor who stipulated that the money be invested indefinitely.
III. $100,000 from a donor who stipulated that the money be spent in accordance with the wishes of Alberts
governing board.
On Albert Universitys statement of cash flows for the year ended June 30, 2009, what amount of these cash
flows should be reported as operating activities?
a. $900,000
b. $400,000
c. $800,000
d. $600,000
8. Gamma Pi, a private nonprofit fraternal organization, should prepare a statement of financial position and
which of the following financial statements?
I. Statement of activities.
II. Statement of changes in fund
balances.
III. Statement of cash flows.
a. I, II, and III.
b. III only.
c. II and III.
d. I and III.
9. Save the Planet, a private nonprofit research organization, received a $500,000 contribution from Ms. Susan
Clark. Ms. Clark stipulated that her donation be used to purchase new computer equipment for Save the
Planets research staff. The contribution was received in August of 2009, and the computers were acquired in
January of 2010. For the year ended December 31, 2009, the $500,000 contribution should be reported by
Save the Planet on its

a. Statement of activities as unrestricted revenue.

c. Statement of activities as temporarily restricted
revenue.
b. Statement of activities as deferred revenue.
d. Statement of financial position as deferred
revenue.
10. United Ways, a private not-for-profit voluntary health and welfare organization, received a contribution of
$10,000 from a donor in 2009. The donor did not specify any use restrictions on the contribution; however, the
donor specified that the donation should not be used until 2010. The governing board of United Ways spent
the contribution in 2010 for fund-raising expenses. For the year ended December 31, 2009, United Ways
should report the contribution on its
a. Statement of financial position as deferred revenue. c. Statement of financial position as an increase in
fund balance.
b. Statement of activities as unrestricted revenue.
d. Statement of activities as temporarily
restricted revenue.
11. The statement of cash flows for a private not-for-profit hospital should report cash flows according to
which of the following classifications?
I. Operating activities.
II. Investing activities.
III.
Financing activities.
a. I, II, and III.
b. II and III.
c. I only.
d. I and III.
12. Pharm, a nongovernmental not-for-profit organization, is preparing its year-end financial statements.
Which of the following statements is required?
a. Statement of changes in financial position.
c. Statement of changes in fund balance.
b. Statement of cash flows.
d. Statement of revenue, expenses and changes in fund
balance.
13. Stanton College, a not-for-profit organization, received a building with no donor stipulations as to its use.
Stanton does not have an accounting policy implying a time restriction on donated fixed assets. What type of
net assets should be increased when the building is received? I. Unrestricted.
II. Temporarily restricted.
III. Permanently restricted.
a. I only.
b. II only.
c. III only.
d. II or III.
14. Sea Lion Park, a private not-for-profit zoological society, received contributions restricted for research
totaling $50,000 in 2008. None of the contributions were spent on research in 2008. In 2009, $35,000 of the
contributions were used to support the research activities of the society. The net effect on the statement of
activities for the year ended December 31, 2009, for Sea Lion Park would be a
a. $15,000 increase in temporarily restricted net assets.
b. $35,000 decrease in temporarily restricted net assets.
c. $35,000 increase in unrestricted net assets.
d. $35,000 decrease in unrestricted net assets.
15. Clara Hospital, a private not-for-profit hospital, earned
$250,000 of gift shop revenues and spent $50,000 on research during the year ended December 31, 2009.
The
$50,000 spent on research was part of a $75,000 contribution received during December of 2008 from a donor
who stipulated that the donation be used for medical research. Assume none of the gift shop revenues were
spent in 2009. For the year ended December 31, 2009, what was the increase in unrestricted net assets from
the events occurring during 2009?
a. $300,000
b. $200,000
c. $250,000
d. $275,000
16. Which of the following transactions of a private not-for-profit voluntary health and welfare organization
would increase temporarily restricted net assets on the statement of activities for the year ended June 30,
2009?
I. Received a contribution of $10,000 from a donor on May 15, 2009, who stipulated that the donation not be
spent until August of 2009.
II. Spent $25,000 for fund-raising on June 20, 2009. The amount expended came from a $25,000 contribution
on March 12, 2009. The donor stipulated that the contribution be used for fund-raising activities.
a. Both I and II.
b. Neither I nor II.
c. I only.
d. II only.
17. Catherine College, a private not-for-profit college, received the following contributions during 2009: I.
$5,000,000 from alumni for construction of a new wing on the science building to be constructed in 2009. II.
$1,000,000 from a donor who stipulated that the contribution be invested indefinitely and that the earnings be
used for scholarships. As of December 31, 2009, earnings from investments amounted to $50,000. For the
year ended December 31, 2009, what amount of these contributions should be reported as temporarily
restricted revenues on the statement of activities?
a. $ 50,000
b. $5,050,000
c. $5,000,000
d. $6,050,000
18. On December 31, 2009, Hope Haven, a private not-for-profit voluntary health and welfare organization,
received a pledge from a donor who stipulated that $1,000 would be given to the organization each year for
the next five years, starting on December 31, 2010. Present value factors at 6% for five periods are presented
below.
Present value of an ordinary annuity for 5 periods at 6% 4.21236

Present value of an annuity due for 5 periods at 6% 4.46511

For the year ended December 31, 2009, Hope Haven should report, on its statement of activities,
a. Unrestricted revenues of $5,000.
c. Unrestricted revenues of $4,465.
b. Temporarily restricted revenues of $4,465.
d. Temporarily restricted revenues of $4,212.
19. For Guiding Light, a nongovernmental nonprofit religious organization, net assets that can be expended in
accordance with the wishes of the governing board of the organization should be reported as I. Unrestricted.
II. Temporarily restricted.
III. Permanently restricted.
a. I only.
b. Both I and II.
c. I, II, and III.
d. Either I or II.
20. The Jackson Foundation, a private not-for-profit organization, had the following cash contributions and
expenditures in 2009: Unrestricted cash contributions of $500,000 Cash contributions of $200,000 restricted
by the donor to the acquisition of property. Cash expenditures of $200,000 to acquire property with the
donation in the above item. Jacksons statement of cash flows should include which of the following amounts?
Operating activities Investing activities Financingactivities
a. $700,000 $(200,000) $0
b. $500,000 $0 $0
c. $500,000 $(200,000) $200,000
d. $0 $ 500,000 $200,000