Wiley CPA Exam Review 2013 Financial Accounting And Reporting 10th Edition O. Ray Whittington - Solutions

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The statement of operations for a private, nonprofit hospital should include a performance indicator that indicates the results of operations for a period. Which of the following items would be included in a hospital’s performance indicator reported on the statement of operations?I. Proceeds from
Unrealized gains on investments which are permanently restricted as to use by donors are reported by a private, nonprofit hospital on thea. Statement of operations.b. Statement of cash flows.c. Statement of changes in net assets.d. Statement of operations and statement of cash flows.
Which of the following financial statements of a private, nonprofit hospital reports the changes in unrestricted, temporarily restricted, and permanently restricted net assets for a time period?Balance sheet Statement of operationsa. Yes Yesb. Yes Noc. No Yesd. No No
Wilson Hospital, a nonprofit hospital affiliated with Wilson College, had the following cash receipts for the year ended December 31, 2012:Collections of health care receivables $750,000 Contribution from donor to establish a term endowment 250,000 Tuition from nursing school 50,000 Dividends
Tucker Hospital, a nonprofit hospital affiliated with Tucker University, received a donation of medical supplies during the year ended December 31, 2012. The supplies cost the vendor $10,000 and had a selling price of $15,000 on the date they were donated. The vendor did not place any restrictions
On the statement of operations for a nonprofit, nongovernmental hospital, which of the items below is included in the amount reported for “revenue and gains over expenses and losses” (the performance indicator)?I. Unrealized loss on other than trading securities. The securities are included in
The governing board of Smithson Hospital, a nonprofit hospital affiliated with a religious organization, acquired 100 BMI Company bonds for $103,000 on June 30, 2012. The bonds pay interest on June 30 and December 30. On December 31, 2012, interest of $3,000 was received from BMI, and the fair
Swathmore Hospital, a nonprofit hospital affiliated with Swathmore University, received the following cash contributions from donors during the year ended December 31, 2011:Contributions restricted by donors for research $ 50,000 Contributions restricted by donors for capital acquisitions 250,000
Michael Hospital, a nonprofit hospital affiliated with a private university, reported the following information for the year ended December 31, 2012:Cash contributions received from donors for capital additions to be acquired in 2013 $150,000 Proceeds from sales at hospital gift shop and snack bar
James Hospital, a nonprofit hospital affiliated with a private university, provided $200,000 of charity care for patients during the year ended December 31, 2012. The hospital should report this charity carea. As net patient service revenue of $200,000 on the statement of operations.b. As net
Kash Hospital, a private sector, not-for-profit organization, has gross patient service revenues of $750,000, charity care of $75,000, amounts disallowed by third-party payors of $63,000, and donor-unrestricted contributions of $110,000. What is the amount of net patient service revenue?a.
How are nonrefundable advance fees representing payments for future services to be accounted for by nonprofit continuing care retirement communities?a. As revenue.b. As a liability.c. As other financing sources.d. In a trust fund.
How is charity care accounted for on the financial statements of a not-for-profit private sector health care organization?a. As patient service revenue.b. As bad debt expense.c. As a separate component of revenue.d. Not included on the financial statements.
Which of the following would be acceptable as a performance indicator on a private sector health care entity’s statement of operations?a. Increase in unrestricted net assets.b. Net income.c. Increase in net assets.d. Excess of revenues over expenses.
When functional classifications are used by private sector health care organizations, they should be based ona. Net present value.b. Full cost allocations.c. Percentage allocations.d. Resale value.
If private not-for-profit health care entities do not use this expense classification on the operating statement, they must provide it in the notes.a. Natural.b. Character.c. Functional.d. Object.
Which of the following can be included in the performance indicator on the statement of operations for private sector health care organizations?a. Extraordinary items.b. Premium revenue from capitation agreements.c. Equity transfers.d. Contributions of long-lived assets.
Which of the following is not covered by the AICPA Audit and Accounting Guide, Health Care Organizations?a. Nursing homes.b. Home health agencies.c. Hospitals.d. Voluntary health and welfare organizations.
For private sector health care organizations, which of the following is included in patient service revenue?a. Contractual adjustments.b. Charity care.c. Significant revenue under capitation agreements (premium revenue).d. Unrestricted contributions.
Williams Hospital, a nonprofit hospital affiliated with a religious group, reported the following information for the year ended December 31, 2012:Gross patient service revenue at the hospital’s full established rates $980,000 Bad debts expense 10,000 Contractual adjustments with third-party
Elizabeth Hospital, a nonprofit hospital affiliated with a religious group, should prepare which of the following financial statements?Statement of changes in net assets Statement of operationsa. Yes Nob. No Yesc. Yes Yesd. No No
A not-for-profit organization receives an asset for which they have little or no discretion over the use of the asset. The organization should report the asset as a(n)a. Contribution.b. Agency transaction.c. Exchange.d. Conditional transfer.C. Health Care Organization Accounting—Private Sector
Depending on the extent of discretion that the not-for-profit recipient has over the use or subsequent disposition of the assets, gifts in kind may be treated as Agency transactions Contributionsa. No Nob. No Yesc. Yes Yesd. Yes No
Which of the following are considered to be capital additions in the statement of activity of a not-for-profit organization?I. Nonexpendable gifts, grants, and bequests restricted by donors to endowment funds.II. Legally restricted investment income on investments held in endowment funds that must
Under which of the following cases should joint costs be allocated between fund-raising and the appropriate program or management and general function?a. An appeal for funds accompanied by a statement of the mission of the not-for-profit entity.b. An appeal for funds accompanied by a brochure
An arrangement where a donor makes an initial gift to a trust or directly to the not-for-profit organization, in which the not-for-profit organization has a beneficial interest but is not the sole beneficiary is known as aa. Donor-imposed condition.b. Donor-imposed restriction.c. Share-the-wealth
The Taft family lost its home in a flood in October 2012. In November of 2012, Mary Wilson donated cash to Goodbody Benevolent Society to purchase furniture for the Taft family. In December 2012, Goodbody purchased this furniture for the Taft family. How should Goodbody report the receipt of the
Peter Smith made a cash donation in January 2012, to World-Wide Helpers, a nongovernmental, nonprofit organization that raises contributions for others. Peter specified the beneficiaries for his contribution, but provided variance power to World-Wide Helpers to use the donation for beneficiaries
A cash donation from a resource provider should be reported as contribution revenue by a recipient organization when which of the following exists?a. The recipient organization and beneficiary are not financially interrelated.b. The resource provider does not allow the recipient organization to use
World-Wide Helpers Foundation, a nonprofit entity, received a cash donation in 2012 from Herold Smith. World-Wide Helpers Foundation is controlled by World-Wide Helpers, a nonprofit entity that raises resources for others. The resources of World-Wide Helpers Foundation are used for the benefit of
Rose Smith made a cash donation for a specific purpose in December 2012, to United Ways, a nongovernmental, nonprofit organization that raises contributions for others. Assume United Ways was (1) not granted variance power by Rose Smith over her donation and (2) the beneficiaries of the donation
Jazz Planners, a private not-for-profit performing arts organization, has donor-restricted permanent endowment funds which include investments in equity securities. These equity securities all have readily determinable fair values because they are all traded on national security exchanges. Most of
The governing board of Crestfallen, a private not-for-profit voluntary health and welfare organization, acquired equity securities of BMZ Company at a cost of $35,000 on May 1, 2012. The governing board used unrestricted net assets to acquire this investment, and it intends to use the income from
How should a private not-for-profit hospital report its investments in debt securities that are classified as current assets and noncurrent assets on its statement of financial position (balance sheet)?Debt securities in current assets Debt securities in noncurrent assetsa. Fair value Amortized
Mary Egbart promised Columbus College, a private, not-for-profit college, that she would provide 80% of the funds needed to construct a new performing arts center, if the college could get the remaining 20% of the funds needed from other donors by July 1, 2012. The promise was made in 2011. At
Which of the following transactions or events would cause an increase in unrestricted net assets for the year ended December 31, 2012?I. A private not-for-profit voluntary health and welfare organization spent a restricted donation that was received in 2011. In accordance with the donor’s wishes,
During 2012, Margaret Billingsley, a prominent art collector, donated several items in her collection to the Darrwin Museum, a private, not-for-profit organization. Ms. Billingsley stipulated that her contribution be shown to the public, that it should be preserved, and not be sold. Darrwin’s
Benevolent Society, a private not-for-profit organization, should recognize contributed services on its statement of activities if which of the following conditions is(are) met?I. The contributed services create or enhance nonfinancial assets.II. The contributed services require specialized skills,
Which of the following transactions would result in an increase in unrestricted net assets for the year ended December 31, 2012?I. A private, not-for-profit hospital earned interest on investments that were board-designated.II. A private, not-for-profit voluntary health and welfare organization
In the financial statements of not-for-profit organizations, reporting reclassifications are caused by which of the following?I. Expiration of donor-imposed conditions.II. Expiration of donor-imposed restrictions.a. I only.b. Both I and II.c. II only.d. Neither I nor II.
A private not-for-profit voluntary health and welfare organization received a cash donation in 2009 that contained a donor-imposed restriction that stipulated that the donation could not be spent until 2011. The voluntary health and welfare organization spent the donation in 2011 on fund-raising
On November 30, 2011, Justin Barlow, an alumnus of Murry School, a private, not-for-profit high school, contributed $15,000, with the stipulation that the donation be used for faculty travel expenses during 2012. During 2012, Murry spent all of the donation in accordance with Mr. Barlow’s wishes.
A not-for-profit organization receives $150 from a donor. The donor receives two tickets to a theater show and an acknowledgment in the theater program. The tickets have a fair market value of $100. What amount is recorded as contribution revenue?a. $0b. $ 50c. $100d. $150
For a private, not-for-profit organization, when is a donor’s conditional promise to give considered to be unconditional?a. When the condition is partially met.b. When the possibility that the condition will not be met is remote.c. When the conditional promise is made.d. When cash or other assets
Darlin Hospital, a private not-for-profit hospital, had the following cash receipts for the year ended December 31, 2012:Patient service revenue $300,000 Gift shop revenue 25,000 Interest revenue restricted by donor stipulation for acquisition of equipment 50,000 As a result of these cash receipts,
On December 30, 2012, the Board of Trustees of Henry Museum, a private not-for-profit organization, designated $4,000,000 of unrestricted net assets for the construction of an addition to its building. What effect does this designation have on the museum’s unrestricted and temporarily restricted
On December 20, 2012, United Appeal, a private not-for-profit voluntary health and welfare organization, received a donation of computer equipment valued at $25,000 from a local computer retailer. The equipment is expected to have a useful life of three years. The donor placed no restrictions on
Child Care Centers, Inc., a not-for-profit organization, receives revenue from various sources during the year to support its day care centers. The following cash amounts were received during 2012:$2,000 restricted by the donor to be used for meals for the children. $1,500 received for
During the year ended December 31, 2012, the James Community Foundation, a private not-for-profit organization, received the following contributed services:I. Anderson & Anderson, attorneys-at-law, contributed their services which involved advice related to the foundation’s regular endowments.II.
On December 5, 2012, Jones Heating and Air Conditioning Service repaired the heating system in the building occupied by Good Hope, a private not-for-profit voluntary health and welfare organization. An invoice for $1,500 was received by Good Hope for the repairs on December 15, 2012. On December
Which of the following private, nonprofit entities is required to report expenses both by function and by natural classification?a. Hospitals.b. Colleges and universities.c. Voluntary health and welfare organizations.d. Performing arts organizations.
During the year ended December 31, 2012, a not-for-profit performing arts entity received the following donor-restricted contribution and investment income:Cash contribution of $100,000 to be permanently invested. Cash dividends and interest of $6,000 to be used for the acquisition of theater
During 2011, an alumnus of Smith College, a private not-for-profit college, transferred $100,000 to the college with the stipulation that it be spent for library acquisitions. However, the alumnus specified that none of the cash transferred could be spent until the college had matched the entire
Rosary Botanical Gardens, a private not-for-profit organization, established a $500,000 quasi endowment on September 1, 2012. On the garden’s statement of financial position at December 31, 2012, the assets in this quasi endowment should be included in which of the following classifications?a.
Which of the following classifications is required for reporting of expenses by all not-for-profit organizations?a. Natural classification in the statement of activities or notes to the financial statements.b. Functional classification in the statement of activities or notes to the financial
A large not-for-profit organization’s statement of activities should report the net change for net assets that are Unrestricted Permanently restricteda. Yes Yesb. Yes Noc. No Nod. No Yes
If the Pel Museum, a not-for-profit organization, received a contribution of historical artifacts, it need not recognize the contribution if the artifacts are to be sold and the proceeds used toa. Support general museum activities.b. Acquire other items for collections.c. Repair existing
The Jones family lost its home in a fire. On December 25, 2012, a philanthropist sent money to the Amer Benevolent Society, a not-for-profit organization, to purchase furniture for the Jones family. During January 2013, Amer purchased this furniture for the Jones family. How should Amer report the
On December 30, 2012, Leigh Museum, a not-for-profit organization, received a $7,000,000 donation of Day Co. shares with donor-stipulated requirements as follows:Shares valued at $5,000,000 are to be sold, with the proceeds used to erect a public viewing building. Shares valued at $2,000,000 are to
Financial statements of not-for-profit organizations focus ona. Basic information for the organization as a whole.b. Standardization of funds nomenclature.c. Inherent differences of not-for-profit organizations that impact reporting presentations.d. Distinctions between current fund and noncurrent
A storm broke glass windows in the building of Lea Meditators, a not-for-profit religious organization. A member of Lea’s congregation, a professional glazier, replaced the windows at no charge. In Lea’s statement of activities, the breakage and replacement of the windows shoulda. Not be
A statement of financial position (balance sheet), which reports unrestricted, temporarily restricted, and permanently restricted net assets, is required for which one of the following organizations?I. A public university.II. A private, not-for-profit hospital.a. Both I and II.b. I only.c. Neither
United Hope, a private not-for-profit voluntary health and welfare organization, received the following contributions in 2012:I. $500 from donors who stipulated that the money not be spent until 2013.II. $1,000 from donors who stipulated that the contributions be used for the acquisition of
The Jackson Foundation, a private not-for-profit organization, had the following cash contributions and expenditures in 2012:Unrestricted cash contributions of $500,000. Cash contributions of $200,000 restricted by the donor to the acquisition of property. Cash expenditures of $200,000 to acquire
For Guiding Light, a nongovernmental nonprofit religious organization, net assets that can be expended in accordance with the wishes of the governing board of the organization should be reported as I. Unrestricted.II. Temporarily restricted.III. Permanently restricted.a. I only.b. Both I and II.c.
On December 31, 2012, Hope Haven, a private not-for-profit voluntary health and welfare organization, received a pledge from a donor who stipulated that $1,000 would be given to the organization each year for the next five years, starting on December 31, 2013. Present value factors at 6% for five
Catherine College, a private not-for-profit college, received the following contributions during 2012:I. $5,000,000 from alumni for construction of a new wing on the science building to be constructed in 2012.II. $1,000,000 from a donor who stipulated that the contribution be invested indefinitely
Which of the following transactions of a private not-for-profit voluntary health and welfare organization would increase temporarily restricted net assets on the statement of activities for the year ended June 30, 2012?I. Received a contribution of $10,000 from a donor on May 15, 2012, who
Clara Hospital, a private not-for-profit hospital, earned $250,000 of gift shop revenues and spent $50,000 on research during the year ended December 31, 2012. The $50,000 spent on research was part of a $75,000 contribution received during December of 2011 from a donor who stipulated that the
Sea Lion Park, a private not-for-profit zoological society, received contributions restricted for research totaling $50,000 in 2011. None of the contributions were spent on research in 2011. In 2012, $35,000 of the contributions were used to support the research activities of the society. The net
Stanton College, a not-for-profit organization, received a building with no donor stipulations as to its use. Stanton does not have an accounting policy implying a time restriction on donated fixed assets. What type of net assets should be increased when the building is received?I. Unrestricted.II.
Pharm, a nongovernmental not-for-profit organization, is preparing its year-end financial statements. Which of the following statements is required?a. Statement of changes in financial position.b. Statement of cash flows.c. Statement of changes in fund balance.d. Statement of revenue, expenses and
The statement of cash flows for a private not-for-profit hospital should report cash flows according to which of the following classifications?I. Operating activities.II. Investing activities.III. Financing activities.a. I, II, and III.b. II and III.c. I only.d. I and III.
United Ways, a private not-for-profit voluntary health and welfare organization, received a contribution of $10,000 from a donor in 2011. The donor did not specify any use restrictions on the contribution; however, the donor specified that the donation should not be used until 2012. The governing
Save the Planet, a private nonprofit research organization, received a $500,000 contribution from Ms. Susan Clark. Ms. Clark stipulated that her donation be used to purchase new computer equipment for Save the Planet’s research staff. The contribution was received in August of 2012, and the
Gamma Pi, a private nonprofit fraternal organization, should prepare a statement of financial position and which of the following financial statements?I. Statement of activities.II. Statement of changes in fund balances.III. Statement of cash flows.a. I, II, and III.b. III only.c. II and III.d. I
Albert University, a private not-for-profit university, had the following cash inflows during the year ended June 30, 2012:I. $500,000 from students for tuition.II. $300,000 from a donor who stipulated that the money be invested indefinitely.III. $100,000 from a donor who stipulated that the money
On the statement of activities for a private not-for-profit performing arts center, expenses should be deducted from I. Unrestricted revenues.II. Temporarily restricted revenues.III. Permanently restricted revenues.a. I, II, and III.b. Both I and II.c. I only.d. II only.
Good Hope, a private not-for-profit voluntary health and welfare organization, received a cash donation of $500,000 from Mr. Charles Peobody on November 15, 2012. Mr. Peobody directed that his donation be used to acquire equipment for the organization. Good Hope used the donation to acquire
Kerry College, a private not-for-profit college, received $25,000 from Ms. Mary Smith on April 30, 2012. Ms. Smith stipulated that her contribution be used to support faculty research during the fiscal year beginning on July 1, 2012. On July 15, 2012, administrators of Kerry awarded research grants
Chicago Museum, a private nonprofit organization, has both regular and term endowments. On the museum’s statement of financial position (balance sheet), how should the net assets of each type of endowment be reported?Term endowments Regular endowmentsa. Temporarily restricted Permanently
The statement of financial position (balance sheet) for Founders Library, a private nonprofit organization, should report separate dollar amounts for the library’s net assets according to which of the following classifications?a. Unrestricted and permanently restricted.b. Temporarily restricted
A statement of functional expenses is required for which one of the following private nonprofit organizations?a. Colleges.b. Hospitals.c. Voluntary health and welfare organizations.d. Performing arts organizations.
. Which of the following is true regarding the Statement of Revenues, Expenses, and Changes in Net Position for a public college choosing to report as a special-purpose entity engaged in business-type activities only?a. State appropriations should be reported as nonoperating income.b. An operating
. A public college had tuition and fees of $20,000,000. Scholarships, for which no services were required, amounted to $1,000,000. Employee discounts, which were provided in exchange for services, amounted to $2,000,000. The amount to be reported as net tuition and fees by the public college would
. In accordance with GASB 35, a public college or university that chooses to report both governmental and business-type activities should report Fund financial statements Government-wide financial statementsa. No Yesb. Yes Noc. Yes Yesd. No No
. In accordance with GASB 35, a public college or university that chooses to report only business-type activities should present only the financial statements required fora. Enterprise funds.b. Government funds.c. Internal service funds.d. Enterprise and internal service funds.
. During the year ended December 31, 2012, the town of Harrisville had the following selected transactions:The general fund made a permanent transfer of $100,000 to an enterprise fund. The enterprise fund used the amount transferred to acquire capital assets.The general fund transferred $1,000,000
. During the year ended December 31, 2012, the town of Jamestown had the following selected transactions:The general fund made a $100,000 advance to an internal service fund. The internal service fund will repay the advance in 2013.The water utility enterprise fund billed the general fund $25,000
. In accordance with GASB 34 (as amended), Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, what types of interfund transactions are included in the amount reported for transfers on the government-wide statement of activities?I. Yearly
. To record the 2012 pension contribution of $11,000, what debit is required in the governmental-type fund used in connection with employer pension contributions?a. Other Financing Uses Control.b. Expenditures Control.c. Expenses Control.d. Due to Pension Trust Fund.V. Reporting Interfund Activity
. What account should be credited in the pension trust fund to record the 2012 employer contribution of $11,000?a. Additions.b. Other Financing Sources Control.c. Due from Special Revenue Fund.d. Pension Benefit Obligation.
. Grove County collects property taxes levied within its boundaries and receives a 1% fee for administering these collections on behalf of the municipalities located in the county. In 2012, Grove collected $1,000,000 for its municipalities and remitted $990,000 to them after deducting fees of
. Which of the following is not Required Supplementary Information for the financial statements of a defined-benefit pension plan under GASB 67?a. A ten-year schedule of changes in pension liability.b. A ten-year schedule of the amounts of total pension liability, fiduciary net position, net
. The following fund types used by Green Township had total assets at June 30, 2012, as follows:Agency funds $ 300,000 Debt service funds 1,000,000 Total fiduciary fund assets amount toa. $0b. $ 300,000c. $1,000,000d. $1,300,000
. Hill City’s water utility fund held the following investments in US Treasury securities at June 30, 2012:In the fund’s balance sheet, what amount of these investments should be reported as cash and cash equivalents at June 30, 2012?a. $0b. $ 30,000c. $ 80,000d. $180,000 U. Accounting for
. If the equipment is used in internal service fund operations and the lease payments are financed with internal service fund revenues, what account or accounts should be debited in the internal service fund for the December 31, 2012 lease payment of $65,000?a. Expenditures Control $65,000b.
. If the equipment is used in enterprise fund operations and the lease payments are to be financed with enterprise fund revenues, what account should be debited for $150,000 in the enterprise fund at the inception of the lease?a. Expenses Control.b. Expenditures Control.c. Other Financing Sources
. What account should be debited for $150,000 in the general fund at inception of the lease if the equipment is a general fixed asset and Rock does not use a capital projects fund?a. Other Financing Uses Control.b. Equipment.c. Expenditures Control.d. Memorandum entry only.
. The orientation of accounting and reporting for all proprietary funds of governmental units isa. Income determination.b. Project.c. Flow of funds.d. Program.Rock County has acquired equipment through a noncancelable lease-purchase agreement dated December 31, 2012. This agreement requires no down

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Wiley CPA Exam Review 2013 Financial Accounting And Reporting 10th Edition O. Ray Whittington - Solutions

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