QUIZ – OTHER NPES

1. Chelsea does volunteer work for a local not-for-profit organization as a community service. She
replaces without charge an administrator who would have otherwise been paid P31,000. Which of the
following statements is true?
The organization should recognize public support of P31,000 as an increase in unrestricted
assets

Golden Path, a labor union, has the following receipts and expenses for the year ended, December 31,
2020.
Receipts:
Per capita dues 900,000
Initiation fees 120,000
Sales of organization supplies 80,000
Nonexpendable gift restricted by donor 50,000
for loan purposes for 10 years
Nonexpendable gift restricted by donor 60,000
for loan purposes in perpetuity
Expenses:
Labor negotiations 720,000
Fund-raising 150,000
Membership development 40,000
Administrative and general 250,000

The union constitution provides that 12% of the per capita dues be designated for the strike insurance
fund to be distributed for strike relief at the discretion of the union’s executive board.

2. In Golden Path’s statement of activities for the year ended December 31, 2020, the amount that should
be reported under the classification of revenue from unrestricted funds is ___________. 1100000
3. In Golden Path’s statement of activities for the year ended December 31, 2020, the amount that should
be reported under the classification of restricted net assets is ___________. 110000
4. In Golden Path’s statement of activities for the year ended December 31, 2020, the amount that should
be reported under the classification of supporting services is ___________.440000
5. In Golden Path’s statement of activities for the year ended December 31, 2020, the amount that should
be reported under the classification of program services is ___________.720000

On January 2, 2020, an NPE botanical society received a gift of an inexhaustible fixed asset with an
estimated useful life of 10 years and no salvage value. The donor’s cost of this asset was P20,000 and
its fair value at the date of the gift was P30,000
6. The amount of depreciation of this asset that the society should recognize in its 2020 financial
statements is _______ 0

On January 2, 2020, an NPE botanical society received a gift of an exhaustible fixed asset with an
estimated useful life of 10 years and no salvage value. The donor’s cost of this asset was P20,000 and
its fair value at the date of the gift was P30,000

7. The amount of depreciation of this asset that the society should recognize in its 2020 financial
statement is ___ 3000
8. The following expenditures were among those incurred by an NPE botanical society during 2020:
Printing of annual report 15,000
Unsolicited merchandise sent to encourage contributions 35,000
The amount that should be classified as fund-raising costs in the society’s statement of activities is
____________.
35000

9. An NPE receives two gifts. One is P80,000 and is restricted for paying salaries of teachers who help
children learn to read. The other is P110,000, which is restricted for purchasing playground equipment.
The organization spends both amount properly at the end of this year. The organization records no
depreciation this period and it has elected to view the equipment as having a time restriction. On the
statement of activities, what is reported for unrestricted net assets?
An increase of P80,000 and a decrease of P80,000

10. Contribution of a work of art in a museum for public exhibit would

Not be recognized as a contribution

11. On May 5, 2020, a donor contributed an equity security having a P500,000 fair value. The donor
stipulated that, (a) the NPE may sell the equity security and make other suitable in investments, (b) the
P500,000 must remain intact in perpetuity, and (c) the income and gains may be spent only on diabetes
research (no mention is made regarding the treatment of losses). The equity security had a fair value of
P530,000 at December 31, 2020. No dividends were received in 2020. Which of the following
categories of net assets is affected at December 31, 2020?
Increase temporarily restricted net assets by P30,000

12. In July 2020, Anthony donated P200,000 cash to a church with a stipulation that the revenue generated
from this gift be paid to him during his lifetime. The conditions of this donation are that after Anthony
dies, the principal may be used by the church for any purpose voted on by the church elders. The
church received interest of P16,000 which was remitted to Anthony in the church’s June 30, 2021
annual financial statements:
P200,000 should be reported as temporarily restricted net assets in the statement of financial
position and P216,000 should be reported as revenue in the statement of activities

13. The entry in the books of an NPE local ballet company to record receipt of a cash gift which is
designated by the donor to buy costumes for a new ballet staging includes a
Credit to Revenue-temporarily restricted contribution

14. To send a mailing, a private NPE charity spends P100,000. The mailing solicits donations and provides
educational and other information about the charity. Which of the following is true?
Under certain specified circumstances, the organization should allocate a portion of the
P100,000 to program service expenses.

15. Green trees, a community foundation, incurred P5,000 expenses during 2020 putting on its annual
fund-raising talent show. In the statement of activities, the P5,000 should be reported as
Part of fund-raising costs
 The following gifts are received in Year 1 by an NPE
I P2,000 specified by the donor to be used to pay salaries
II P10,000 for the new conference room furniture
III P5,000 to be held for one year before being expended

16. The increase in temporarily restricted net assets in Year 1 is _____. 7000

17. The amount to be reclassified on the statement of activities in year 2 from temporarily restricted column
is _____ 7000

18. In 2020, the board of trustees of Estimada foundation designated P100,000 from its current funds to
college scholarships. Also in the same year, the foundation received P200,000 from an estate of a
benefactor who specified that the bequest was to be used for hiring teachers to tutor handicapped
students.
The amount to be accounted for as temporarily restricted fund is _____. 200000

19. The entry in the books of an NPE to record pledges of P100,000 with an estimated 5% uncollectible,
includes a
Credit to unrestricted net assets-contribution of P95,000

20. In 2021, an NPE trade association enrolled five new member companies each of which was obligated to
pay nonrefundable fees of P1,000. These fees were receivable by the association in 202. Three of the
new members paid the initiation fees in 2021 and the others received by the association from all other
members have always covered the organization’s cost of services provided to its members. It can be
reasonably expected that future dues will cover all costs of the organization’s future services to
members. Average membership duration is ten years because of margins, attrition and economic
factors.
The amount of initiation fees from the five new members that should be recognized as revenue by the
association is____ 5000

Cute Paws organization, an NPE had the following cash flows during the year
a. P200,000 unrestricted contributions
b. P2.4M from fund-raising activities to support current operations
c. P400,000 from a donor who stipulated that the money be sent in accordance with the wishes of Cute
Paws governing board
d. P800,000 cash dividends restricted for the purchase of equipment
e. P800,000 expenditure to acquire equipment with cash dividends in (d)
f. P1.2M from a donor who stipulated that the contribution be invested indefinitely, income from the
contribution may be used in furtherance of Brownie’s mission

21. The net cash flows from operating activities is 3000000

22. The net cash flow from financing activities is 2000000

23. The net cash flow from investing activities is (800000)

24. Which account would be credited in recording a gift of medicine to a nursing home from an outside
party?
Other revenues-donations
25. Other NPEs provide three financial statements. Which of the following is not one of them?
Statement of functional expenses

26. A big corporation makes a donation of P10M to the local art museum foundation for the construction of
a new art museum provided the community can match the P10M with other donations. This is an
example of a/an
Conditional pledge

27. Leerick foundation received a nonexpendable endowment of P500,000 in 2020 from Von enterprises.
The endowment assets were invested in publicly traded securities von did not specify how gains and
losses from the dispositions endowment were to be treated. No restrictions were placed on the use of
the dividends received and interest earned on fund resources in 2021. Leerick realized gains of
P100,000 on sales of fund investments and received a total interest and dividend of P50,000 on fund
securities.
The amount of these capital gains interest and dividends available for expenditures by Leerick’s
unrestricted current fund is ___. 50000

28. Reporting requirements of other NPEs similar to those of which of the following entities?
A VHWO

29. QQ museum is a private NPE if it received a contribution of historical artifacts it need not recognize the
contribution if the artifacts are to be sold and it will use the proceed to
Acquire other items for collections

30. The Lopez family lost its home in a fire on December 25, 2020 a philanthropist sent money to AB
society an NPE specifically to purchase furniture for the Lopez family During January 2021 AB
purchased furniture for the Lopez family how should AB report the receipt of the money in its 2020
financial statement?
As a liability