Question: Alpha Hospital a large not for profit organization has adopted an accounting

Alpha Hospital, a large not-for-profit organization, has adopted an accounting policy that does not imply a time restriction on gifts of long-lived assets.

For items 1 through 6, indicate the effect of the transaction on Alpha’s financial statements by selecting the appropriate letter.

1. Received information that Alpha’s board had designated $1,000,000 to purchase investments whose income will be used for capital improvements.
2. Received income from investments in item 1, which was not previously accrued.
3. Received benefactor-provided funds for a building expansion.
4. Used funds in item 3 to purchase a building in the fiscal period following the period they were received.
5. Received annual financial statements prepared by an accounting firm without charge.
6. Received investments subject to the donor’s requirement that investment income be used to pay for outpatient services.

A. Increase in unrestricted revenues, gains, and other support
B. Decrease in expense
C. Increase in temporarily restricted net assets
D. Increase in permanently restricted net assets
E. No required reportable event

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  • CreatedMay 23, 2014
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