University of St.

Louis Tuguegarao
Tuguegarao City, Cagayan

SET A

QUIZ 1 (NGO)
MULTIPLE CHOICE:(10 POINTS)
1.A permanent endowment is one on which
I.The principal may be expended after the passage of a certain period or the occurrence of an event specified by
the donor.
II.The principal must be maintained indefinitely in revenue producing investments and only the revenue from
the investments may be expended.
a. I only
b. II only
c. Both I and II
d.Neither I nor II
2.The type of endowment fund that may be established only by the the governing board of a nonprofit
organization using unrestricted net assets and the principal may later be expended is
a. Permanent endowment fund
b. Term endowment fund
c. Quasi-endowment fund
d. Trustee endowment fund
3.The annuity fund of a nonprofit organization
I. Is used to account for assets contributed to the nonprofit organization with the stipulation that
the
organization shall make stipulated payment to a named beneficiary but only the income on the fund
is paid to the beneficiary.
II. Is established for assets contributed to a nonprofit organization with the stipulation that the
organization shall pay specified fixed amounts periodically to designated recipients for a
specified period of time.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
4.In the prior year, an alumnus of a private nonprofit high school made a contribution with the
donation be
used for faculty travel during the current year. During the current year, the
school spent all
the
donation for faculty travel expenses. What was the effect of the donation on unrestricted
and
temporarily restricted net assets for the current year?
a. Increase in unrestricted net assets and decrease in temporarily restricted net assets.
b. No effect on unrestricted net assets and decrease in temporarily restricted net assets.
c. Increase in unrestricted net assets and no effect on temporarily restricted net assets.
d. No effect on both unrestricted and temporarily restricted net assets.
5.The assets in a quasi-endowment fund should be included in which of the following
classifications?
a. Temporarily restricted net assets
b. Unrestricted net assets
c. Permanently restricted net assets
d. Either termporarily or permanently restricted net assets depending upon the term of the quasi-endowment
6.During the current year ended December 31, a foundation received the following contributed
services:
I. Senior citizens participated in a telethon to raise money for a new music building.
II.A reputable law firm contributed services which involve advice related to the foundation's
regular
endowments.
Which of these contribution's statement of activities for the current year ended December 31?
a. Both I and II
b. II only
c. I only
d. Neither I nor II
7.A statement that is not mandatory required by regulating bodies but not for profit organizations are
encouraged to do to provide additional expense information.
a. Statement of Financial Position
b. Statement of Activities
c.Statement of Functional Expenses
d. Statement of Cash Flows
8.A statement with same definition and classifications as that of business enterprises except that the description
of financing activities is expanded to include resources that are donor-restricted for long term purposes.
a. Statement of Financial Position
b. Statement of Activities

c.Statement of Functional Expenses

d. Statement of Cash Flows
9.It depends only on the passage of time or demand by the promisee for performance
a. Conditional promise to give
b. Unconditional promise to give
c. Donor imposed restriction
d. Donor imposed condition
10.In preparing the statement of cash flows for a non-govermental not for profit enitity, cash contributions that
are restricted for long term purposes are classified as.
a. Operating activities
b. Investing activities
c. Financing activities
d. Capital and related financing activities
IDENTIFICATION: (10 Points)
1 .These are expenses that generally include goods and services distributed to beneficiaries, customers, or
members to fulfill the purpose a mission of the organization.
2.These are expense activities which includes general oversight, business management, general record keeping,
budgeting, finance and other management and administrative activities.
3.An organizations that provide various kinds of health, welfare, and community services voluntarily to various
segments of society
4.These should be recognized only when the services (1) create or enhance nonfinancial assets or (2) require
specialized skills
5.Restricted contributions for long-term purposes and interest and dividends from investments restricted
for long-term purposes, such as endowments,and future programs are reported in Statement of Cash Flows as
______________.
6.This statement shall report the changes in net assets or the revenue, gains, expenses and losses of a
nonprofit organization.
7.Is a legal and accounting entity that is operated for the benefit of society as a whole rather than for the benefit
of an individual proprietor or a group of partners or stockholders.
8.A characteristics of nonprofit organizations that all resources donated must be accounted.
9.Is a fund established for land, building and equipment of the nonprofit organization.
10.A fund for which the principal may be expended after the passage of certain period or the occurrence of an
event specified by the donor.
Prepare Journal Entries based on the Following transactions:
A group of concerned citizen organized a voluntary health and welfare organization called Love Thy
Neighbors (LTN) in 2004. The transacions of this organization are as follows:
1.As part of its fund raising effort in 2005, LTN distributed decals to all residents in the community. The decals
cost LTN $145. As a result of the campaign, the organization received unrestricted cash contributions of $4000
and unconditional promises to give totaling $6000. Of this, $6000 contribution receivable, $2000 is not
collectible in 2006. A presumption exists that the $2,000 due in 2006 is restricted for use in 2006. LTN
estimates that 10% of the pledges will uncollectible.
2.LTN collected $3,600 of the contributions receivable due in 2005 and wrote off the remaining $400 as
uncollectible.
3.LTN collects the full $2000 due in 2006 during the year. When the receivables are collected, LTN reports any
difference between the estimated amount of uncollectibles and the actual amount as gain or loss in the
appropriate net asset class. The implied time restriction is met, so LTN reclassifies $1,800 of temporarily
restricted net assets as unrestricted net assets.
4.A donor gives LTN $1,000 that is restricted for a playground project. LTN purchases supplies for the
playground project for $900 and reports the expenses as changes in unrestricted net assets. The organization
makes an entry to reclassify $900 of temporarily restricted net assets. The reclassification is entered even if
unrestricted resources were used to pay for the playground and supplies.
5.On January 1,2005 Martin Construction donated a used van to the organization. LTN has a policy of implying
a time restriction on donated fixed assets over the life of the asset. The fair value of the van is $1,500 and it has
a three year remaining useful life. The van will be used in the organization's community service program. LTN
initially records the donated van as temporarily restricted support. Later LTN records depreciation expense on
the van as a program expense. The amount of depreciation expense is reclassified from temporarily restricted
net assets to unrestricted net assets.
6.A fund raising event for LTN featured a dinner and dance. Ticket sales for the dinner totaled $950 and
expenses of the fund raiser amounted to $650.

University of St. Louis Tuguegarao

Tuguegarao City, Cagayan

SET B

QUIZ 1 (NGO)
MULTIPLE CHOICE:(10 POINTS)
1.During the current year ended December 31, a foundation received the following contributed
services:
I. Senior citizens participated in a telethon to raise money for a new music building.
II.A reputable law firm contributed services which involve advice related to the foundation's
regular
endowments.
Which of these contribution's statement of activities for the current year ended December 31?
a. Both I and II
b. II only
c. I only
d. Neither I nor II
2.A statement that is not mandatory required by regulating bodies but not for profit organizations are
encouraged to do to provide additional expense information.
a. Statement of Financial Position
b. Statement of Activities
c.Statement of Functional Expenses
d.Statement of Cash Flows
3.A statement with same definition and classifications as that of business enterprises except that the
description of financing activities is expanded to include resources that are donor-restricted for long
term purposes.
a. Statement of Financial Position
b. Statement of Activities
c.Statement of Functional Expenses
d. Statement of Cash Flows
4.It depends only on the passage of time or demand by the promisee for performance
a. Conditional promise to give
b. Unconditional promise to give
c. Donor imposed restriction
d. Donor imposed condition
5.In preparing the statement of cash flows for a non-govermental not for profit entity, cash contributions that
are restricted for long term purposes are classified as.
a. Operating activities
b. Investing activities
c. Financing activities
d. Capital and related financing activities
6.A permanent endowment is one on which
I.The principal may be expended after the passage of a certain period or the occurrence of an event
specified by the donor.
II.The principal must be maintained indefinitely in revenue producing investments and only the revenue
from the investments may be expended.
a. I only
b. II only
c. Both I and II
d.Neither I nor II
7.The type of endowment fund that may be established only by the the governing board of a nonprofit
organization using unrestricted net assets and the principal may later be expended is
a. Permanent endowment fund
b. Term endowment fund
c. Quasi-endowment fund
d. Trustee endowment fund
8.The annuity fund of a nonprofit organization
I. Is used to account for assets contributed to the nonprofit organization with the stipulation that
the
organization shall make stipulated payment to a named beneficiary but only the income on the fund
is paid to the beneficiary.
II. Is established for assets contributed to a nonprofit organization with the stipulation that the
organization shall pay specified fixed amounts periodically to designated recipints for a
specified
period of time.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
9.In the prior year, an alumnus of a private nonprofit high school made a contribution with the donation be

used for faculty travel during the current year. During the current year, the
school spent
all the donation for faculty travel expenses. What was the effect of the donation on unrestricted

and temporarily restricted net assets for the current year?

a. Increase in unrestricted net assets and decrease in temporarily restricted net assets.
b. No effect on unrestricted net assets and decrease in temporarily restricted net assets.
c. Increase in unrestricted net assets and no effect on temporarily restricted net assets.
d. No effect on both unrestricted and temporarily restricted net assets.
10.The assets in a quasi-endowment fund should be included in which of the following
classifications?
a. Temporarily restricted net assets
b. Unrestricted net assets
c. Permanently restricted net assets
d. Either termporarily or permanently restrictednet assets depending upon the term of the quasi-endowment
IDENTIFICATION: (10 Points)
1.This statement shall report the changes in net assets or the revenue, gains, expenses and losses of
nonprofit
organization.
2.Is a legal and accounting entity that is operated for the benefit of society as a whole rather than for the benefit of an
individual proprietor or a group of partners or stockholders.
3.A characteristics of nonprofit organizations that all resources donated must be accounted.
4.Is a fund established for land, building and equipment of the nonprofit organization.
5.A fund for which the principal may be expended after the passage of certain period or the occurrence of an event
specified by the donor.
6.These are expenses that generally include goods and services distributed to beneficiaries, customers, or
members to fulfill the purpose a mission of the organization.
7.These are expense activities which includes general oversight, business management, general record keeping,
budgeting, finance and other management and administrative activities.
8.An organizations that provide various kinds of health, welfare, and community services voluntarily to various segments
of society
9.These should be recognized only when the services (1) create or enhance nonfinancial assets or (2) require specialized
skills
10.Restricted contributions for long-term purposes and interest and dividends from investments restricted
for longterm purposes, such as endowments and future programs are reported in Statement of Cash Flows as ______________.

Prepare Journal Entries based on the Following transactions:(10 POINTS)

A group of concerned citizen organized a voluntary health and welfare organization called Love Thy
Neighbors (LTN) in 2004. The transacions of this organization are as follows:
1.As part of its fund raising effort in 2005, LTN distributed decals to all residents in the community. The decals
cost LTN $145. As a result of the campaign, the organization received unrestricted cash contributions of $4000
and unconditional promises to give totaling $6000. Of this, $6000 contribution receivable, $2000
is not
collectible in 2006. A presumption exists that the $2,000 due in 2006 is restricted for use in 2006.
LTN
estimates that 10% of the pledges will uncollectible.
2.LTN collected $3,600 of the contributions receivable due in 2005 and wrote off the remaining $400 as
uncollectible.
3.LTN collects the full $2000 due in 2006 during the year. When the receivables are collected, LTN reports any
difference between the estimated amount of uncollectibles and the actual amount as gain or loss in the
appropriate net asset class. The implied time restriction is met, so LTN reclassifies $1,800 of temporarily
restricted net assets as unrestricted net assets.
4.A donor gives LTN $1,000 that is restricted for a playground project. LTN purchases supplies for the
playground project for $900 and reports the expenses as changes in unrestricted net assets. The organization
makes an entry to reclassify $900 of temporarily restricted net assets. The reclassification is entered even if
unrestricted resources were used to pay for the playground and supplies.
5.On January 1,2005 Martin Construction donated a used van to the organization. LTN has a policy of implying
a time restriction on donated fixed assets over the life of the asset. The fair value of the van is $1,500 and it has
a three year remaining useful life. The van will be used in the organization's community service program. LTN
initially records the donated van as temporarily restricted support. Later LTN records depreciation expense on
the van as a program expense. The amount of depreciation expense is reclassified from temporarily restricted
net assets to unrestricted net assets.
6.A fund raising event for LTN featured a dinner and dance. Ticket sales for the dinner totaled $950 and
expenses of the fund raiser amounted to $650.

SET A

SETB

1.B

1.b

2.C
3.B
4.B
5.B
6.b
7.C
8.D
9.D
10.B

2.C
3.D
4.D
5.B
6.B
7.C
8.B
9.B
10.B

1.Program Services
2.Management and General
3.Voluntary Health and Welfare Organizations
4.Contributed Services
5.financing activities
6.Statement of activities
7.NPO
8.Stewardship of resources
9.Plant fund
10.Term Endowment fund
1.Fund Raising Expense
Cash

1.Statement of activities
2.NPO
3.Stewardship of resources
4. Plant fund
5.Term Endowment fund
6. Program Services
7.Management and General
8. Voluntary Health and Welfare Organizations
9. Contributed Services
10.financing activities

145
145

Cash

Unrestricted support-Ser. Exp

650
Cash or Vouchers Payable

4000
4000

Unrestricted support-cont.
Cont Receivable
6000
Allowance for uncollectible cont
Unrestricted support-cont
Temp. Restricted support-cont

600
3600
1800

2.Cash
Allowance for uncollectible cont
Cont Receivable

4000

3600
400

3.Cash
Allowance for uncollectible cont 200
Cont Receivable
Unrestricted support-cont

2000
2000
200

Temp. Restricted Net Asset-Reclassification out

Unres. Net Asset-Reclassification in
4. Cash

1800
1800

1000
Temp. Restricted support-cont

Expenses- community service

Cash

1000
900
900

Temp. Restricted Net Asset-Reclassification out

Unres. Net Asset-Reclassification in

900
900

5.Equipment
Temp. Restricted support-cont

15000
15000

Depreciation expense-PS CS
AD- equipment

500
500

Temp. Restricted Net Asset-Reclassification out

Unres. Net Asset-Reclassification in
6. Cash

500
500

950
Unrestricted gains- special event

950

650