1. Under GAAP, when is an organization allowed to say that some of the costs of a...
Question:
1. Under GAAP, when is an organization allowed to say that some of the costs of a mailing that includes both educational material and fundraising requests should be treated as program expenses?
Never – if any part of the mailing was fundraising, all costs are considered fundraising | ||
Always – FASB has decided this is a matter for professional judgment of what is reasonable, and has declined to set specific criteria. | ||
Only if the mailing meets the FASB’s purpose, content, and audience criteria. | ||
As long as there is valid educational material in the mailing. |
2. Which financial statement is used by nonprofit organizations, not businesses?
Statements of functional expenses | ||
Statements of donors’ equity | ||
Balance sheets | ||
Cash flow statements under the indirect method |
3. In December, 2020, the Alzheimer’s Foundation received a $20,000 gift restricted to supporting a lecture series scheduled for the summer of 2021. In 2021, the Foundation spent the money to pay for speakers and expenses of the lecture series. Assume that the Foundation’s Statement of Activities has separate columns for unrestricted and for donor restricted activities. Which of the following statements is the best description of what would be shown in the 2021 statement of activities related to this $20,000? (This is the year the money got spent)
A $20,000 expense in the unrestricted column, and a $20,000 donation in the unrestricted column | ||
A $20,000 expense in the donor-restricted column, and no entries in the unrestricted column. | ||
A $20,000 expense in the unrestricted column, and no entries in the donor-restricted column. | ||
A $20,000 expense in the unrestricted column, and an indication in both columns that $20,000 of net donor-restricted assets were released and transferred to the unrestricted net assets. |
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin