- Description
ACC 460 Wk 5 – Practice: Wk 1 Knowledge Check
A skilled carpenter installed a roof on a new administrative building for a private not-for-profit free of charge. The not-for-profit would have had to pay $1,800 for this service if not donated. What entry should the not-for-profit make?
Multiple Choice
No entry is required for this event.
Capital Expenditures $18,000
Contribution revenue $18,000
Building $18,000
Contribution revenue $18,000
Supporting Service expense $18,000
Contribution revenue $18,000
A donor gave $25,000 at the beginning of January 1, 2019 to a private not-for-profit organization to use for scholarships. In January 1, 2020, scholarships of $35,000 were awarded. How would scholarship expense be reported in the Statement of Activity for January 1, 2020?
Multiple Choice
$10,000 under net assets without donor restrictions.
$35,000 under net assets with donor restrictions.
$10,000 under net assets without donor restrictions and $25,000 under net assets with donor restrictions.
$35,000 under net assets without donor restrictions.
A donor gave $1,200,000 to a private not-for-profit organization to be held in endowment. In addition, the governing board permanently designated $500,000 to the endowment. In the Statement of Financial Position, how should these amounts be classified?
Multiple Choice
Net assets with donor restrictions: $700,000; Net assets without donor restrictions: $500,000
Net assets with donor restrictions: $1,900,000; Net assets without donor restrictions: $0
Net assets with donor restrictions: $0 ; Net assets without donor restrictions: $1,900,000
Net assets with donor restrictions: $1,200,000; Net assets without donor restrictions: $500,000
Tuition and fees for Northern University were assessed at $22,000,000. $1,600,000 of the amount due from students was later reduced by need based scholarships. Graduate assistantships and work-study stipends reduced the amounts collectible from student by an additional $1,000,000.
What is the journal entry to record tuition revenue?
Multiple Choice
Accounts receivable 20,400,000
Operating Revenue-Student Tuition & Fees 20,400,000
Accounts receivable 19,400,000
Operating Revenue-Student Tuition & Fees 19,400,000
Accounts receivable 21,000,000
Operating Revenue-Student Tuition & Fees 21,000,000
Accounts receivable 22,000,000
Operating Revenue-Student Tuition & Fees 22,000,000
On December 1, 2019, St. Sebastian University received cash of $30,000 and a pledge for another $60,000 to be paid in 2020. The amounts are to establish a permanent endowment to provide scholarships for music majors. How should this event be recorded on December 31, 2019, assuming St. Sebastian is a private university?
Multiple Choice
Restricted Cash 30,000
Contributions receivable 60,000
Contribution Revenue: With Donor Restrictions 90,000
Restricted Cash 30,000
Contributions receivable 60,000
Contribution Revenue: With Donor Restrictions 30,000
Deferred Revenues 60,000
Restricted Cash 30,000
Contributions receivable 60,000
Contribution Revenue: Temporarily restricted 90,000
Restricted Cash 30,000
Contribution Revenue: With Donor Restrictions 30,000
Private colleges are required to report residual equity in the following categories:
Multiple Choice
Unrestricted and Restricted.
Net Assets with Donor Restrictions, Net Assets without Donor Restriction.
Net Position with Donor Restrictions, Net Position without Donor Restriction.
Unrestricted Net Position, Restricted Net Position, and Net Investment in Capital Assets.
Which of the following is true with respect to hospitals. What amount should be reported in revenues and provision for bad debt for these items?
Multiple Choice
Private not-for-profit and for-profit hospitals record depreciation expense, but government-owned hospitals do not.
Private not-for-profit and for-profit hospitals report residual equity within the categories of Net Assets with Donor Restrictions or Net Assets without Donor Restrictions, but government-owned hospitals do not.
Private not-for-profit and for-profit hospitals may report cash flows from operating activities on the indirect method, but government-owned hospitals may not.
All of the choices are true.
Not-for-profit health care entities are distinguished from voluntary health and welfare organizations in the following manner:
Multiple Choice
Health care organizations are owned by governments while voluntary health and welfare organizations are not.
Health care organizations do not provide services to individuals who are unable to pay.
Health care organizations use accrual accounting whereas voluntary health and welfare organizations do not.
Health care organizations are considered to be primarily business-oriented (revenues are generated by services provided) whereas voluntary health and welfare organizations raise a significant portion of their money from voluntary contributions.
A private sector, not-for-profit hospital received a pledge of $150,000 in 2019 to be used for a building to be constructed in 2020 but contingent on the hospital being able to raise an equivalent amount from other donors. As of the end of 2019, two-thirds of the amount had been raised from other donors. In 2020, the hospital raised the remaining amount from other donors. The donor gave the $150,000 to the hospital in 2020 and the building was completed in 2021. In which year should the hospital recognize the $150,000 from the pledge?
Multiple Choice
$150,000 in 2020.
Correct
$150,000 in 2021.
$100,000 in 2020 and $50,000 in 2021.
$100,000 in 2019 and $50,000 in 2020.
During the month of December, Mary & David Memorial Hospital billed patients $45,000, billed 3rd parties $55,000, and provided $15,000 of charity care. How much should the hospital report as Patient Service Revenue?
Multiple Choice
$115,000.
$100,000.
$55,000.
$45,000.