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Test: CPA Financial Accounting and Reporting (FAR)
1. | The Professional Accountants Group is a private, not-for-profit organization that has 1,000 members. Each member pays $400 per year for their membership and receives benefits with a fair value of $120 as benefits of membership. How should the Professional Accountants Group report the revenue received from its members? |
$400,00 is reported as contribution revenue
$400,00 is reported as membership dues revenue
$120,000 is reported as membership dues revenue and $280,000 is reported as contribution revenue
$120,000 should be reported as a reduction in expenses and $280,000 is reported as revenue
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