1. Military Family Center is a VHWO funded by contributions from the general public.

During
2020, unrestricted pledges of P800,000 were received, half of which is payable in 2020 with the
other half payable in 202` for use in 2021. It was estimated that 10% of these pledges would be
uncollectible. How much should Military Family Center report as net contribution revenues in
2020 with respect to the pledges?
720000

2. A VHWO receives P32,000 in cash from solicitations made in the local community. The
organization receives an additional P1,500 from members in payment of annual dues. Members
are assumed to receive benefits roughly equal in value to the amount of dues paid. How should
this money be recorded?
Public support of P32,000 and revenue of P1,500

3. Government grants that are essentially flow-through transactions would be recorded by a

VHWO as:
Liability

4. A VHWO developed and printed informational materials which were intended to both educate
the public about how its resources are used to help people in need and to also appeal for much
needed support. In this situation, the cost of informational materials should be:
Allocated between expenses for program services and fund-raising expense

5. Which of the following is a VHWO?

Charity raising money for underprivileged children

6. A contribution in 20x9 to a VHWO, which is restricted to usage to celebrate the millennium in

the year 20x0, is recorded as a credit to:
Revenue-permanently restricted

7. Which of the following is not a question individuals ask of a VHWO in considering whether to
make a contribution?
How much should this organization receive?

8. A VHWO received P200,000 pledges from donors on Feb. 15, 2020. The donors did not place
any time or use restrictions on the amount pledged. The governing board estimated that 10% of
the pledges would be uncollectible. During the remainder of fiscal year 2020, cash received
from pledges amounted to P184,000. For the year ended June 30, 2020, what amount should
the VHWO report as Contributions-unrestricted?
184000

9. Public support for a VHWO includes:

Legacies and bequests

10. In the absence of donor stipulations, revenues derived from an endowment would be

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 reported in the statement of activities of a VHWO as increases in:
Unrestricted net assets

11. A VHWO sends a mailing to all of its members including those who have donated in the past
and others who have not donated. The mailing which costs P22,000 asks for monetary
contributions to help achieve the organization’s mission. In addition, 80% of the materials
included in the mailing is educational in nature. Which of the following is true?
No part of the P22,000 should be reported as a program service cost because there is no
specific call to action

12. A VHWO received unrestricted cash donations of P20,000 from donors who attended a
dinner held for the benefit of the organization. The costs of the dinner, including room rental,
and other expenses, amounted to P7,000. On the statement of activities prepared by the
VHWO, the expenses of the dinner should be
Reported as fund-raising costs

13. The Philippine Heart Association is having its annual Heart Ball. This is a major annual event
of the organization. Any direct costs of the ball are considered:
Fund-raising expenses

14. On June 30, 2020, a VHWO received pledges from donors amounting to P50,000. The
donors did not place any time or use restrictions on the amount pledged. However, the donors
intended to give the money three months after making the pledge. It was estimated that 10% of
the pledges would not be collected. How should the VHWO report these pledges on the date the
pledge was received?
a. As contribution revenue-unrestricted for P50,000
b. As fund balance for P45,000
c. As contribution revenue-temporarily restricted for P45,000
d. As fund balance-unrestricted for P50,000
e. As contribution revenue-unrestricted for P45,000
f. As contribution revenue-temporarily restricted for P50,000

15. Bell Foundation, a VHWO supported by contributions from the general public, included the
following costs in its statement of functional expenses for the year ended December 31, 2020.

Fund raising P1,000,000

Administrative 600,000
Research 200,000

Bell’s functional expenses for 2020 program services included

200000

16. During the fiscal year ended June 30, 2020, Global Charities, a VHWO, received
unrestricted cash contributions of P500,000 and temporarily restricted cash contributions of

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 P300,000. All of the temporarily restricted contributions were restricted by the donors for
equipment acquisition. During the year ended, June 30, 2020, equipment costing P250,000 was
acquired with the restricted contributions. As a result of these two contributions, Global
Charities’ statement of cash flows prepared for the year ended June 30, 2020, would report an
increase in net cash provided by operating activities of
500000

17. A VHWO receives a gift of new furniture having a fair value of P2,100. The group then gives
the furniture to needy families following a flood. How should the organization record the receipt
and distribution of this donation?
Record public support of P2,100 and community assistance expense of P2,100

18. Which of the following expenses would be considered a program service expense for a local
cancer society?
Salary of a home care nurse

19. Catherine Dee is a social worker on the staff of Military Family Center, a VHWO. She earns
P42,000 annually for a normal workload of 2,000 hours. During 2020, she contributed an
additional 800 hours of her time to the Military Family Center at no extra charge. How much
should Military Family Center record in 2020 as contributed services expense?
16800

20. A donation was received by a VHWO specifically to care for indigent patients. Which of the
following should be used to record the gift?
Public support-temporarily restricted contributions

[A DONOR]]
A donor agrees to contribute P5,000 per year at the end of each year of the next five years to a
VHWO. The donor did not place any restrictions on the amount pledged. The stream of
payments is discounted at 6%. The first payment of P5,000 is received at the end of the first
year. The present value factor for a five-payment annuity due on June 30, 2020 at 6% is 4.2124.

21. The increase in present value of the contributions receivable recognized at the end of the
first year is:
1264

22. The journal entry to recognize present value at the time the pledge is received includes:
A debit to Pledges Receivable-Temporarily Restricted for P21,062

23. At the end of the first year, the pledged increased unrestricted net assets by:
5000

[TOWN SERVICE CENTER]

Town Service Center is a VHWO funded by contributions from the general public. During 2020,

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 unrestricted pledges of P800,000 were received. Half of this was received during 2020 and the
remaining half is promised by the donor to be given the following year. It was estimated that
10% of the pledges receivable would be uncollectible. In addition, Halley Larson, a social worker
on the VHWO staff with annual earnings of P30,000 for a normal workload of P1,500 hours
contributed an additional 600 hours of her time to the VHWO at no charge.

24. How much should Town report as net temporarily restricted contribution revenue for 2020
with respect to the pledges?
a. 400000
b. 760000
c. 800000
d. 360000

25. How much should Town report as unrestricted contribution revenue for 2020 with respect to
the pledges?
400000

26. How much should Town report as total unrestricted contribution revenue for 2020?
412000

27. How much should Town report as contribution service expense in 2020?
12000

[STATE CENTER HEALTH AGENCY]

On January 1, 2020, State Center Health Agency, a VHWO, received a bequest of P200,000
certificate of deposit maturing on December 31, 2024. The contributor’s only stipulations were
that the certificate be held to maturity and the interest revenue received annually be used to
purchase books for the children to read in the pre-school program run by the agency. Interest
revenue each year is P9,000, and this fully spent for books each year. When the certificate was
redeemed, the board of trustee’s adopted a formal resolution designing P150,000 of the
proceeds for future purchase of playground equipment for the pre-school program.

28. What should be reported in the December 31, 2024 statement of financial position for the
unrestricted fund?
Board-designated funds, P150,000

29. What should be reported in the December 31, 2024 statement of activities for the
unrestricted fund?
A. Investment income of P9,000
B. Contributions of P209,000
C. Transfers from restricted fund of P9,000
D. Transfers from restricted fund P209,000

Legacies and bequests of P200,000

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 30. What should be reported in 2020 statement of activities as unrestricted public support or/and
revenues?
Transfers from the restricted fund of P9,000

31. What would be reflected under temporarily restricted column of the statement of activities in
2020?
All of these

[LOCAL SERVICES]
Local Services, a VHWO had the following classes of net assets on July 1, 2020, the beginning
of its fiscal year:

Unrestricted P500,000
Temporarily restricted P100,000
Permanently restricted P1,000,000

During the year ended June 30, 2020, the following events occurred:
1. It purchased equipment costing P100,000, from restricted contributions for this purpose. The
contributions had been received from donors during June 2020.
2. It received P130,000 cash donations which were restricted for research activities. During the
year ended June 30, 2021, P90,000 of the contributions were expended on research.
3. It sold investments classified in the net assets as permanently restricted for a loss of
P40,000. Dividends and interest income earned on the investments amounted to P70,000.
There were no restrictions on how investment income is to be used.
4. It received cash contributions of P200,000 from donors who did not place either time or use
restrictions upon their donations.
5. Expenses, excluding depreciation expense, for program services and supporting services
incurred during the year ended June 30, 2021 was P260,000.
6. Depreciation expense for the year ended June 30, 2021 was P80,000.

32. The amount of permanently restricted net assets reported on the statement of financial
position would be:
960000

33. The amount of expenses under unrestricted column of the statement of activities would be:
340000

On the statement of activities for the year ended June 30, 2021, temporarily restricted net
assets:
Decreased 60000

Reclassifications on the statement of activities for the year ended June 30, 2021 would be:
190000

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 34. A VHWO has the following expenditures:
Research to cure disease 60000
Fund raising cost 70000
Work to help disabled 40000
Administrative salaries 90000
How much should the organization report these items?
Program service expenses of P100,000 and supporting service expenses of P160,000

35. A good reason for a VHWO to adopt fund accounting even though standards do not require
it is because
a. The funds are effectively utilized
b. The program services involved more than one type of revenue
c. The donated services are significant
d. The capital assets are significant

36. Which of the following organizations would be classified as a VHWO?

The sierra madre foundation, an environmental organization

37. A donation of materials to be used in providing services was received by a VHWO. How
should these donated materials be recorded?
As inventory

38. Greg takes a leave of absence from his job to work full time for a VHWO for six months. He
fills the position of finance director, a position that normally pays P88,000 per year. He accepts
no remuneration for his work. How should these donated services be recorded?
As public support of P44,000 and an expense of P44,000

39. A VHWO received P300,000 contribution on April 15, 2020 from a donor who stipulated that
the donation has to be invested permanently in stocks and bonds. The donor further stipulated
that the earnings from the investment be at the discretion of the governing board of the VHWO.
Earnings from the investment for the year ended, June 30, 2020 amounted to P6,000. How
would the VHWO report this information for the year ended June 30, 2020?
Increase in permanently restricted net assets of P300,000 and in unrestricted net assets
of P6,000

40. A VHWO is permitted to use building facilities for free. This should be recorded as
Both as contribution and rent expense at fair market value

41. A CPA donates her services to prepare the annual financial report of a VHWO. The services
should be recorded as:
Both as revenue-unrestricted and accounting expenses

42. A VHWO reports pledges receivable on its statement of financial position at the present

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 value of future cash collections. How is the increase in present value of the pledges receivable,
which is due to the passage of time, reported on the VHWO’s statement of activities?
As an increase in contributions-temporarily restricted

43. Which of the following financial statements is not required when reporting for a VHWO?
Statement of support, revenue, expenses and changes in fund balances

44. On the statement of functional expenses prepared for a VHWO, depreciation expense is
allocated to
I. Expenses for program services
II. Expenses for supporting services
Both I and II

45. Which of the following items is considered a special event support for a VHWO?
Bingo games and bake sales

46. What is the purpose of a VHWO’s statement of functional expenses?

Separates program service expenses from supporting service expense

47. What is the proper method of carrying investments of a VHWO?

Market value measured at year-end

48. Which basis of accounting should a VHWO use?

Accrual basis for all funds

49. On the statement of functional expenses of a VHWO, how are expenses classified?
Program service expenses and supporting services expenses

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