7/21/2019 NPO - Govact

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7/21/2019 NPO - Govact

COR JESU COLLEGE

SUNDAY COLLEGE DEPARTMENT
9acred $eart Avenue, :igos !ity, 2hilippines

ACCOUNTING OR GO!ERNMENT AND NON"PROIT ORGANI#ATION

INAL E$AMINATION

INSTRUCTOR: ANGELO ANDRO M% SUAN& CPA

I% True 'r a(se

))*)))))+% Accounting for non-governmental non-prot organizations shall apply to

organizations for the direct benets of members.

)))t)))),% In Accounting for ;on-prot organization, All e*penses are reported as

unrestricted.

 / <. 2lant is recorded as either unrestricted or temporarily restricted, and depreciated but plant
cannot be recorded as permanently restricted

 / =. Funds to be invested indenitely and artwor that must be preserved are considered as
permanent restrictions.

 / >. In contrast to e*change transactions, in agency transactions, nothing is given by the

nonprot organization in return for a contribution.

 ?f??@. supporting services is a classication of service which relate to e*penses incurred in

providing the organization5s social service activities.

 ??t??. /he ;on 2rot &rganization is re'uired to present three general purpose nancial
statement, e*cept for #oluntary $ealth and %elfare &rganization which is re'uired to present
additional statement.

 ??f?? B. /he 9tatement of !ash Flows on ;2& provides information that a0ects the transactions
and other events and circumstances that change the amount and nature of net assets.

 t C. &perating e*penses of hospitals are reported on an accrual basis. And the ;2& regards Dad
debts as an e*pense.
F 7E. /he 2hilippine Accounting 9tandards set standards in accounting for ;2& in 2hilippines.

P(ant und N'n"-r'.t Statement C2arit3 Restri1ted C'ntra1tua

'rani0ati' '* inan1ia( Care und (
n P'siti'n Ser4i1es ad5ustmen
ts

Statement
'*  und Statement
'* End'7ment
*und Aen13
*unds Premium
*ees
un1ti'na(
E6-enses a1ti4ities
COA 8udet 1a(( a(('tment Im-rest a--r'-riati (u1tuatin
und 'n  und

D9M strai2t (ine O8(iati'n G'4ernmen A11rua( 9ureau '* 

Met2'd t 9asis Treasur3

Identi.1ati'n:

 ??????????????7. Is a non-stoc corporation that is organized for the benet of the public
as a whole rather than for the benet of an individual proprietor.

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 ??????????????8. An indenite revenue-producing investment, where only revenues from

these funds may be e*pended.
 ??????????????<. /hese are funds used in the ac'uisition of physical properties.
 ??????????????=. Available for current use but e*pendable only as authorized by the donor
of the asset.
 ??????????????>. /his is the additional statement for #oluntary $ealth and %elfare
&rganization.
 ??????????????@. Also nown as subscriber fees or capitation fees, are revenues from
agreements which a hospital provides any necessary patient services for a specic fee.
 ??????????????. /hese are services provided free of charge of patients who 'ualify under
hospital5s policy.
 ??????????????B. Resources received by the institution which belong to others, such as
student body fees.
 ??????????????C. /hese are discounts arranged with third party payors that fre'uently
have agreements to reimburse at less than established rates.
 ??????????????7E. It is the basic unit of the ;on-prot organization.

MULTIPLE COICE ;+< -ts%=

7. A ;2& gives donors a sweatshirt imprinted with its logo when they pay 27>E dues. /he
value of the sweatshirt is appro*imately 27>E. /his transaction is mostly liely reported as6
a. An e*change transaction
b. An agency transaction
c. !ontribution
d. A gift in ind

8. A statement of nancial position, which reports unrestricted temporarily restricted, and

permanently
I. restricted net assets, is re'uired for which one of the following organizations
2ublic university
II. A 2rivate, not-for-prot hospital
a. Doth I and II
b. I only
c. ;either I or II
d. II only

<. /he unconditional promise to give are recognized as contribution revenue when6
a. 2romise is received.
b. /he related receivable is collected
c. /he time or purpose restriction is satised
d. /he future event that binds the promisor occurs
=. ;et assets that are restricted by the governing board of a nongovernment not-for-prot
organization are reported as a part of6
a. 2ermanently restricted net assets
b. /emporarily restricted net assets
c. +nrestricted net assets
d. )ither permanent or temporarily restricted net assets depending on the term of 
restriction

>. Gohn +niversity, a private nonprot university, had the following cash in"ows during the
year ended :ecember <7, 8E7>.
I. 2>EE,EEE from students for tuition
II. 2<EE,EEE from a donor who stipulated that the money be invested indenitely
III. 27EE,EEE from a donor who stipulated that the money be spent in accordance to
the wishes of Gohn5s board of directors

&n Gohn5s university 9tatement of cash "ows for the year ended :ecember <7, 8E7> what
amount of these cash "ows should be reported as operating activities6

a. 2CEE,EEE c. 2BEE,EEE
b. 2=EE,EEE d. 2@EE,EEE

@. anila useum, a non prot organization received contributions restricted for research
totaling 2>E,EEE in 8E7=. Assume that the 2>E,EEE was not e*pensed in 8E7=. /hese
contributions were used to purchase 2<>,EEE of research e'uipment in 8E7>. As a result of 

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these transactions, for the year ended :ecember <7, 8E7>, anila useum will report on
its statement of activities a
a. 2<>,EEE increase in temporarily restricted net assets
b. 2>E,EEE increase in temporarily restricted net assets
c. 2<>,EEE increase in unrestricted net assets.
d. 27>,EEE increase in unrestricted net assets

. %hich ofaccounting
a. Fund the following should
and be accounting
accrual used in accounting for nonprot organization
b. Fund accounting but not accrual accounting
c. Accrual accounting but not fund accounting
d. ;either accrual nor fund accounting

B. Fund-raising e*penses of nonprot organizations are presented in the statement of activity

as6

2rogram 9ervices )*penses 9upporting )*penses

a. Hes Hes
b. Hes ;o
c.
d. ;o
;o Hes
;o

C. /he following are the e*amples of ;on-prot organizations, e*cept6

a. !ivic organization
b. +niversity of the 2hilippines
c. Religious &rganizations
d. abor unions

7E.A characteristic of ;2& which means that it depends on the voluntary contributions of 
citizenry e*cept for foundations established by wealthy individuals.
a. 2ublic service
b. ;o prot motives
c. Finance by the citizenry
d. 9tewardship of resources

77.In 8E7>, 9t. Angels $ospital received an unrestricted be'uest of common stoc with a fair
maret value of 2>E,EEE on the date of receipt of the stoc. /he testator had paid 28E,EEE
of this stoc in 8E7<. 9t Angels $ospital should record be'uest as
a% N'n"'-eratin re4enue '* P><&<<<
b. ;on-operating revenue of 2<E,EEE
c. ;on-operating revenue of 28E,EEE
d. A memorandum entry only

78.%hich prescribes the nancial statements of non-prot-organizations reporting

reclassications is caused by which of the following
I. )*piration of donor-imposed conditions
II. )*piration of donor-imposed restrictions
a. I only
b. Doth I and II
1% II 'n(3
d. ;either I nor II

7<.:uring 8E7>, +9/ $ospital purchased medicines for hospital use totaling 2BEE,EEE.
Included in this 2BEE,EEE was an invoice of 27E,EEE that was cancelled in 8E7> by the
vendor because the vendor wished to donate this medicine to +9/. /his donation of 
medicine should be recorded as6
a. 27E,EEE reduction of medicine e*pense
8% An in1rease in 't2er '-eratin re4enue '* P+<&<<<
c. A direct 27E,EEE credit to the general unrestricted funds balance
d. A 27E,EEE credit to the restricted fund balance.

7=.In Gune 8E7>, 9an Antonio $ospital purchased medicine from 2ar 2harmaceutical !o. at a
cost of 27,EEE. $owever, 2ar notied 9an Antonio that the voice was being cancelled and
that the medicines were being donated to 9an Antonio. 9an Antonio should record this
donation of medicines as

a% Ot2er '-eratin re4enue '* P+&<<<

b. A 27,EEE credit to operating e*penses
c. A 27,EEE credit to non-operating e*penses
d. A memorandum entry only

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7>.%illiams $ospital, a nonprot hospital aJliated with a religious group reported the
following information for the year ended :ecember <7, 8E7>6

1ross patient service revenue at the hospital5s full established rates 2CBE,EEE
Dad :ebts e*pense 7E,EEE
!ontractual AdKustments with third-party payors 7EE,EEE
Allowance for discounts to hospital employees 7>,EEE

&n the hospital5s statement of operations for the year ended :ecember <7, 8E77,
what amount should be reported as net patient service revenues.

a. 2B@>,EEE
b. 2BBE,EEE
c. 2B>>,EEE
d. 2C>>,EEE

2ro Forma )ntries6

Pr'8(em +: 's-ita(s

1ross patient service before charity care or contractual adKustments 28EE,EEE

!harity !are for poor and indigent persons patients 7>,EEE
!ontractual adKustment allowed to 2hilhealth patients <E,EEE
2rovision for doubtful accounts <E,EEE

Re'uired6
7. Record gross receipt patient revenue
8. Record contractual adKustments allowed to 2hilhealth
<. Record the provision of doubtful accounts

Pr'8(em ,: P(ede

A non-prot organization received unconditional pledges totaling to <EE,EEE in a fund raising

drive. 7EL of the pledges are considered to be doubtful of collection. ae the following Kournal
entries6

7. Record pledges received

8. Record the 7EL provision for doubtful pledges

Pr'8(em ?: C'((ees and Uni4ersities

1ross /uition
 /uition fees
waivers provided under fellowship program 2>EE,EEE>E,EEE
2rovision for doubtful accounts >L 8>,EEE

ae the following Kournal entries6

7. Record educational and general tuition fees
8. Record tuition waivers
<. Record provision for doubtful accounts

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