1. A term endowment is a gift

a. The principal of which must be returned to the donor after a specified period of time

b. The principal of which is available for expenditure after a specified period of time

c. The income from which must be expended within a specified period of time

d. The income of which must be added to the principal for a specified period of time

2. A not-for-profit organization maintains an endowment of $1 million, the income from which must be used for research into substance abuse. In a particular year, the endowment had income of $60,000, all of which was expended in accord with the donor’s specifications. The expense should be reported as a decrease in

a. Permanently restricted net assets

b. Temporarily restricted net assets

c. Unrestricted net assets

d. Any of the above

3. A private think tank receives a gift of $100,000 that must be used to fund a symposium on federal accounting. When the institution conducts the symposium, which of the following accounts should be debited in a temporarily restricted fund?

a. Program expense

b. Deferred revenue

c. Net assets released from restriction

d. Deferred program expense

4. The statement of cash flows of a not-for-profit should be divided into which of the following categories of cash flows?

a. Operating activities, noncapital financing activities, capital and related financing activities, investing activities

b. Operating activities, capital activities, investing activities

c. Operating activities, financing activities, capital activities

d. Operating activities, financing activities, investing activities