Statement of Activities - CPA Financial Accounting and Reporting (FAR)
Card 1 of 24
Healthy Families is a private, not-for-profit organization. In Year 2, Healthy Families receives a check for $30,000 to be used to help low-income families in the area access medical care. In Year 3, the money is paid to a local doctor who provided medical care for several families that could not afford the treatment themselves. What will Health Families report in unrestricted net assets in Year 3?
Healthy Families is a private, not-for-profit organization. In Year 2, Healthy Families receives a check for $30,000 to be used to help low-income families in the area access medical care. In Year 3, the money is paid to a local doctor who provided medical care for several families that could not afford the treatment themselves. What will Health Families report in unrestricted net assets in Year 3?
Tap to reveal answer
The receipt of the check will increase unrestricted net assets by $30K and the payment to the doctor would use and therefore decrease unrestricted net assets.
The receipt of the check will increase unrestricted net assets by $30K and the payment to the doctor would use and therefore decrease unrestricted net assets.
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A private, not-profit organization receives a cash gift of $2 million in Year 1. The donor of the funds specified that the money should be invested, with all earnings on the investment being used to pay the salaries of a team of social workers. In the first year, $100,000 was earned on the investment but it was not spent as specified until Year 2. How will this be reported in the statement of activities and changes in net assets in Year 2?
A private, not-profit organization receives a cash gift of $2 million in Year 1. The donor of the funds specified that the money should be invested, with all earnings on the investment being used to pay the salaries of a team of social workers. In the first year, $100,000 was earned on the investment but it was not spent as specified until Year 2. How will this be reported in the statement of activities and changes in net assets in Year 2?
Tap to reveal answer
When the $100K is earned, it is originally recorded as a restricted asset because it is restricted in its use. In Year 2, when the organization is ready to spend the earnings for their intended purposes, it reclasses the $100K to unrestricted assets before using the funds. The organization will record salaries expense for the social workers as well.
When the $100K is earned, it is originally recorded as a restricted asset because it is restricted in its use. In Year 2, when the organization is ready to spend the earnings for their intended purposes, it reclasses the $100K to unrestricted assets before using the funds. The organization will record salaries expense for the social workers as well.
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A private, not-for-profit university receives a donation of a building in the beginning of Year 1 with a fair value of $1 million. The university plans to use the building as an office for student organizations, although the donor has not placed any restrictions on its use. The university's policy is to depreciate buildings via the straight line method over a 40 year life with no anticipated residual value. The university does not have a policy to place an assumed time restriction on these donations. Which of the following is true about this gift in Year 1?
A private, not-for-profit university receives a donation of a building in the beginning of Year 1 with a fair value of $1 million. The university plans to use the building as an office for student organizations, although the donor has not placed any restrictions on its use. The university's policy is to depreciate buildings via the straight line method over a 40 year life with no anticipated residual value. The university does not have a policy to place an assumed time restriction on these donations. Which of the following is true about this gift in Year 1?
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This asset is reported as an unrestricted net asset at its fair value because no restriction has been placed by the donor.
This asset is reported as an unrestricted net asset at its fair value because no restriction has been placed by the donor.
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A statement of financial position for a nongovernmental non for profit organization reports amounts for which of the following classes of net assets?
A statement of financial position for a nongovernmental non for profit organization reports amounts for which of the following classes of net assets?
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In the statement of financial position for a non for profit organization, net assets are classified as with or without donor restrictions.
In the statement of financial position for a non for profit organization, net assets are classified as with or without donor restrictions.
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The ABC museum, a not for profit organization, received a contribution of historical artifacts. It need not recognize the contribution if the artifacts are to be sold and the proceeds used to:
The ABC museum, a not for profit organization, received a contribution of historical artifacts. It need not recognize the contribution if the artifacts are to be sold and the proceeds used to:
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An entity need not recognize contributions of works of art if the donated items are added to collections that are held for public exhibit, are protected, and are subject to organizational policies that require the proceeds of sale to be used to acquire other items for the collection.
An entity need not recognize contributions of works of art if the donated items are added to collections that are held for public exhibit, are protected, and are subject to organizational policies that require the proceeds of sale to be used to acquire other items for the collection.
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Of the following, which would be listed on a non for profit entity's balance sheet?
Of the following, which would be listed on a non for profit entity's balance sheet?
Tap to reveal answer
This is a trick question as the financial statements for non for profit entities and governmental entities are different from standard US GAAP corporate financial statements.
This is a trick question as the financial statements for non for profit entities and governmental entities are different from standard US GAAP corporate financial statements.
← Didn't Know|Knew It →
A statement of financial position for a nongovernmental non for profit organization reports amounts for which of the following classes of net assets?
A statement of financial position for a nongovernmental non for profit organization reports amounts for which of the following classes of net assets?
Tap to reveal answer
In the statement of financial position for a non for profit organization, net assets are classified as with or without donor restrictions.
In the statement of financial position for a non for profit organization, net assets are classified as with or without donor restrictions.
← Didn't Know|Knew It →
Healthy Families is a private, not-for-profit organization. In Year 2, Healthy Families receives a check for $30,000 to be used to help low-income families in the area access medical care. In Year 3, the money is paid to a local doctor who provided medical care for several families that could not afford the treatment themselves. What will Health Families report in unrestricted net assets in Year 3?
Healthy Families is a private, not-for-profit organization. In Year 2, Healthy Families receives a check for $30,000 to be used to help low-income families in the area access medical care. In Year 3, the money is paid to a local doctor who provided medical care for several families that could not afford the treatment themselves. What will Health Families report in unrestricted net assets in Year 3?
Tap to reveal answer
The receipt of the check will increase unrestricted net assets by $30K and the payment to the doctor would use and therefore decrease unrestricted net assets.
The receipt of the check will increase unrestricted net assets by $30K and the payment to the doctor would use and therefore decrease unrestricted net assets.
← Didn't Know|Knew It →
A private, not-profit organization receives a cash gift of $2 million in Year 1. The donor of the funds specified that the money should be invested, with all earnings on the investment being used to pay the salaries of a team of social workers. In the first year, $100,000 was earned on the investment but it was not spent as specified until Year 2. How will this be reported in the statement of activities and changes in net assets in Year 2?
A private, not-profit organization receives a cash gift of $2 million in Year 1. The donor of the funds specified that the money should be invested, with all earnings on the investment being used to pay the salaries of a team of social workers. In the first year, $100,000 was earned on the investment but it was not spent as specified until Year 2. How will this be reported in the statement of activities and changes in net assets in Year 2?
Tap to reveal answer
When the $100K is earned, it is originally recorded as a restricted asset because it is restricted in its use. In Year 2, when the organization is ready to spend the earnings for their intended purposes, it reclasses the $100K to unrestricted assets before using the funds. The organization will record salaries expense for the social workers as well.
When the $100K is earned, it is originally recorded as a restricted asset because it is restricted in its use. In Year 2, when the organization is ready to spend the earnings for their intended purposes, it reclasses the $100K to unrestricted assets before using the funds. The organization will record salaries expense for the social workers as well.
← Didn't Know|Knew It →
A private, not-for-profit university receives a donation of a building in the beginning of Year 1 with a fair value of $1 million. The university plans to use the building as an office for student organizations, although the donor has not placed any restrictions on its use. The university's policy is to depreciate buildings via the straight line method over a 40 year life with no anticipated residual value. The university does not have a policy to place an assumed time restriction on these donations. Which of the following is true about this gift in Year 1?
A private, not-for-profit university receives a donation of a building in the beginning of Year 1 with a fair value of $1 million. The university plans to use the building as an office for student organizations, although the donor has not placed any restrictions on its use. The university's policy is to depreciate buildings via the straight line method over a 40 year life with no anticipated residual value. The university does not have a policy to place an assumed time restriction on these donations. Which of the following is true about this gift in Year 1?
Tap to reveal answer
This asset is reported as an unrestricted net asset at its fair value because no restriction has been placed by the donor.
This asset is reported as an unrestricted net asset at its fair value because no restriction has been placed by the donor.
← Didn't Know|Knew It →
The ABC museum, a not for profit organization, received a contribution of historical artifacts. It need not recognize the contribution if the artifacts are to be sold and the proceeds used to:
The ABC museum, a not for profit organization, received a contribution of historical artifacts. It need not recognize the contribution if the artifacts are to be sold and the proceeds used to:
Tap to reveal answer
An entity need not recognize contributions of works of art if the donated items are added to collections that are held for public exhibit, are protected, and are subject to organizational policies that require the proceeds of sale to be used to acquire other items for the collection.
An entity need not recognize contributions of works of art if the donated items are added to collections that are held for public exhibit, are protected, and are subject to organizational policies that require the proceeds of sale to be used to acquire other items for the collection.
← Didn't Know|Knew It →
Of the following, which would be listed on a non for profit entity's balance sheet?
Of the following, which would be listed on a non for profit entity's balance sheet?
Tap to reveal answer
This is a trick question as the financial statements for non for profit entities and governmental entities are different from standard US GAAP corporate financial statements.
This is a trick question as the financial statements for non for profit entities and governmental entities are different from standard US GAAP corporate financial statements.
← Didn't Know|Knew It →
A statement of financial position for a nongovernmental non for profit organization reports amounts for which of the following classes of net assets?
A statement of financial position for a nongovernmental non for profit organization reports amounts for which of the following classes of net assets?
Tap to reveal answer
In the statement of financial position for a non for profit organization, net assets are classified as with or without donor restrictions.
In the statement of financial position for a non for profit organization, net assets are classified as with or without donor restrictions.
← Didn't Know|Knew It →
The ABC museum, a not for profit organization, received a contribution of historical artifacts. It need not recognize the contribution if the artifacts are to be sold and the proceeds used to:
The ABC museum, a not for profit organization, received a contribution of historical artifacts. It need not recognize the contribution if the artifacts are to be sold and the proceeds used to:
Tap to reveal answer
An entity need not recognize contributions of works of art if the donated items are added to collections that are held for public exhibit, are protected, and are subject to organizational policies that require the proceeds of sale to be used to acquire other items for the collection.
An entity need not recognize contributions of works of art if the donated items are added to collections that are held for public exhibit, are protected, and are subject to organizational policies that require the proceeds of sale to be used to acquire other items for the collection.
← Didn't Know|Knew It →
Of the following, which would be listed on a non for profit entity's balance sheet?
Of the following, which would be listed on a non for profit entity's balance sheet?
Tap to reveal answer
This is a trick question as the financial statements for non for profit entities and governmental entities are different from standard US GAAP corporate financial statements.
This is a trick question as the financial statements for non for profit entities and governmental entities are different from standard US GAAP corporate financial statements.
← Didn't Know|Knew It →
Healthy Families is a private, not-for-profit organization. In Year 2, Healthy Families receives a check for $30,000 to be used to help low-income families in the area access medical care. In Year 3, the money is paid to a local doctor who provided medical care for several families that could not afford the treatment themselves. What will Health Families report in unrestricted net assets in Year 3?
Healthy Families is a private, not-for-profit organization. In Year 2, Healthy Families receives a check for $30,000 to be used to help low-income families in the area access medical care. In Year 3, the money is paid to a local doctor who provided medical care for several families that could not afford the treatment themselves. What will Health Families report in unrestricted net assets in Year 3?
Tap to reveal answer
The receipt of the check will increase unrestricted net assets by $30K and the payment to the doctor would use and therefore decrease unrestricted net assets.
The receipt of the check will increase unrestricted net assets by $30K and the payment to the doctor would use and therefore decrease unrestricted net assets.
← Didn't Know|Knew It →
A private, not-profit organization receives a cash gift of $2 million in Year 1. The donor of the funds specified that the money should be invested, with all earnings on the investment being used to pay the salaries of a team of social workers. In the first year, $100,000 was earned on the investment but it was not spent as specified until Year 2. How will this be reported in the statement of activities and changes in net assets in Year 2?
A private, not-profit organization receives a cash gift of $2 million in Year 1. The donor of the funds specified that the money should be invested, with all earnings on the investment being used to pay the salaries of a team of social workers. In the first year, $100,000 was earned on the investment but it was not spent as specified until Year 2. How will this be reported in the statement of activities and changes in net assets in Year 2?
Tap to reveal answer
When the $100K is earned, it is originally recorded as a restricted asset because it is restricted in its use. In Year 2, when the organization is ready to spend the earnings for their intended purposes, it reclasses the $100K to unrestricted assets before using the funds. The organization will record salaries expense for the social workers as well.
When the $100K is earned, it is originally recorded as a restricted asset because it is restricted in its use. In Year 2, when the organization is ready to spend the earnings for their intended purposes, it reclasses the $100K to unrestricted assets before using the funds. The organization will record salaries expense for the social workers as well.
← Didn't Know|Knew It →
A private, not-for-profit university receives a donation of a building in the beginning of Year 1 with a fair value of $1 million. The university plans to use the building as an office for student organizations, although the donor has not placed any restrictions on its use. The university's policy is to depreciate buildings via the straight line method over a 40 year life with no anticipated residual value. The university does not have a policy to place an assumed time restriction on these donations. Which of the following is true about this gift in Year 1?
A private, not-for-profit university receives a donation of a building in the beginning of Year 1 with a fair value of $1 million. The university plans to use the building as an office for student organizations, although the donor has not placed any restrictions on its use. The university's policy is to depreciate buildings via the straight line method over a 40 year life with no anticipated residual value. The university does not have a policy to place an assumed time restriction on these donations. Which of the following is true about this gift in Year 1?
Tap to reveal answer
This asset is reported as an unrestricted net asset at its fair value because no restriction has been placed by the donor.
This asset is reported as an unrestricted net asset at its fair value because no restriction has been placed by the donor.
← Didn't Know|Knew It →
Healthy Families is a private, not-for-profit organization. In Year 2, Healthy Families receives a check for $30,000 to be used to help low-income families in the area access medical care. In Year 3, the money is paid to a local doctor who provided medical care for several families that could not afford the treatment themselves. What will Health Families report in unrestricted net assets in Year 3?
Healthy Families is a private, not-for-profit organization. In Year 2, Healthy Families receives a check for $30,000 to be used to help low-income families in the area access medical care. In Year 3, the money is paid to a local doctor who provided medical care for several families that could not afford the treatment themselves. What will Health Families report in unrestricted net assets in Year 3?
Tap to reveal answer
The receipt of the check will increase unrestricted net assets by $30K and the payment to the doctor would use and therefore decrease unrestricted net assets.
The receipt of the check will increase unrestricted net assets by $30K and the payment to the doctor would use and therefore decrease unrestricted net assets.
← Didn't Know|Knew It →
A private, not-profit organization receives a cash gift of $2 million in Year 1. The donor of the funds specified that the money should be invested, with all earnings on the investment being used to pay the salaries of a team of social workers. In the first year, $100,000 was earned on the investment but it was not spent as specified until Year 2. How will this be reported in the statement of activities and changes in net assets in Year 2?
A private, not-profit organization receives a cash gift of $2 million in Year 1. The donor of the funds specified that the money should be invested, with all earnings on the investment being used to pay the salaries of a team of social workers. In the first year, $100,000 was earned on the investment but it was not spent as specified until Year 2. How will this be reported in the statement of activities and changes in net assets in Year 2?
Tap to reveal answer
When the $100K is earned, it is originally recorded as a restricted asset because it is restricted in its use. In Year 2, when the organization is ready to spend the earnings for their intended purposes, it reclasses the $100K to unrestricted assets before using the funds. The organization will record salaries expense for the social workers as well.
When the $100K is earned, it is originally recorded as a restricted asset because it is restricted in its use. In Year 2, when the organization is ready to spend the earnings for their intended purposes, it reclasses the $100K to unrestricted assets before using the funds. The organization will record salaries expense for the social workers as well.
← Didn't Know|Knew It →