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GENERAL PRINCIPLES ON ACCOUNTING FOR NPES Which of the following is not a condition to be satisfied for nonrecognition of contributed collection items? None of these Income earned from permanent endowments that can be spent only on certain programs but has not yet been spent would be recorded in the...

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GENERAL PRINCIPLES ON ACCOUNTING FOR NPES 1. Which of the following is not a condition to be satisfied for nonrecognition of contributed collection items? None of these 2. Income earned from permanent endowments that can be spent only on certain programs but has not yet been spent would be recorded in the statement of activities as Temporarily restricted 3. Which of the following is not a required external financial statement of an NPE? Management Discussion and Analysis 4. When are conditional promises to give cash recognized in the financial statements? When the promise becomes unconditional in status 5. The fair value of contributions cannot be determined by using None of the above 6. Which of the following contributions are recognized in the statement of activities? Contributions of services that enhance nonfinancial assets 7. Which of the following contributed services are not recognized in the financial statements? Contributed services performed by persons not having specialized skills 8. Which statement is not correct? Depreciation expense is not recognized by an NPE 9. Your answer should be a whole number. Do not use comma, decimal, and peso sign. Maxi Organization, an NPE disclosed the following in its 20x1 notes to the financial statements. a. Received shares valued at P8,000,000 to be retained with the dividends used to support current operations b. Net resources of P4,000,000 invested in plant assets c. Received equipment valued at P20,000,000 which is to be sold with the proceeds used to renovate the children’s playground d. Board-designated fund of P2,400,000 e. Received P80,000 cash from a donor who did not specify any purpose restrictions on the contribution however, the donor specified that the donation should be used until 20x2 f. Received P3,200,000 from a donor who stipulated that the contribution shall be invested indefinitely and that the earnings shall be used for scholarships. Investment income in 20x1 amounted to P200,000 The total permanently net assets is: 11200000 10. Your answer should be a whole number. Do not use comma, decimal, and peso sign. Use parentheses to indicate DECREASE. K2, an NPE, had the following transactions during 20x1: a. Received contribution of P800,000 to be used for student scholarships. Of this amount, P480,000 was expended during the year b. Expended P200,000 for student scholarships from a P240,000 grant received in previous year The net effect of the transactions in K2’s 20x1 unrestricted net assets is: 0 11. Your answer should be a whole number. Do not use comma, decimal, and peso sign to encode your answer. GreenThinkers Organization, a non-profit organization, received the following donations during the period: a. January 1, 20x1: Land with fair value of P4,000,000 to be used at the discretion of GreenThinkers b. February 15, 20x1: Cash of P8,000,000, restricted for the acquisition of a truck. The truck will be used

in GreenThinker s outreach programs c. March 1, 20x1: Investment in equity securities with fair value of P2,000,000 to be held indefinitely. Only the investment income shall be used by GreenThinkers on its current operations d. May 1, 20x1: JPIA and JPAMA members from different universities contributed services in a treeplanting activity initiated by GreenThinkers. Although the volunteers rendered their services for free, GreenThinkers estimates that the fair value of these services would amount to P20,000 On June 30, 20x1, GreenThinkers acquired a truck for P8,000,000 and received dividends of P240,000 from the equity securities. The net effect of the transactions in the year-end unrestricted net assets (ignore depreciation) is: 12240000 12. In the absence of donor’s stipulations, gains recognized on an endowment would be reported in the statement of financial activities as increases in Unrestricted net assets 13. Which of the following categories of net assets is not required to be shown in the statement of financial position? Board-restricted 14. A local citizen gives a not-for-profit entity a cash donation that is restricted for research activities. The money shall be returned to the donor if the NPE fails to meet the condition. The money should be recorded as Deferred revenue 15. Reciprocal transfers where both parties give and receive something of value are Exchange transactions 16. Your answer should be a whole number. Do not use comma, decimal, and peso sign to encode your answer. GreenThinkers Organization, a non-profit organization, received the following donations during the period: a. January 1, 20x1: Land with fair value of P4,000,000 to be used at the discretion of GreenThinkers b. February 15, 20x1: Cash of P8,000,000, restricted for the acquisition of a truck. The truck will be used in GreenThinker’s outreach programs c. March 1, 20x1: Investment in equity securities with fair value of P2,000,000 to be held indefinitely. Only the investment income shall be used by GreenThinkers on its current operations d. May 1, 20x1: JPIA and JPAMA members from different universities contributed services in a treeplanting activity initiated by GreenThinkers. Although the volunteers rendered their services for free, GreenThinkers estimates that the fair value of these services would amount to P20,000 On June 30, 20x1, GreenThinkers acquired a truck for P8,000,000 and received dividends of P240,000 from the equity securities. The permanently restricted contributions revenue is: 2000000

17. Which of the following is not a required characteristic of a private not-for-profit organizations per the definition given by GAAP An organization dedicated to service for the public good 18. Your answer should be a whole number. Do not use comma, decimal, and peso sign. Maxi Organization, an NPE disclosed the following in its 20x1 notes to the financial statements. a. Received shares valued at P8,000,000 to be retained with the dividends used to support current operations b. Net resources of P4,000,000 invested in plant assets c. Received equipment valued at P20,000,000 which is to be sold with the proceeds used to renovate the children’s playground d. Board-designated fund of P2,400,000 e. Received P80,000 cash from a donor who did not specify any purpose restrictions on the contribution however, the donor specified that the donation should be used until 20x2 f. Received P3,200,000 from a donor who stipulated that the contribution shall be invested indefinitely and that the earnings shall be used for scholarships. Investment income in 20x1 amounted to P200,000 The total unrestricted net assets is: 6400000 19. Your answer should be a whole number. Do not use comma, decimal, and peso sign to encode your answer. GreenThinkers Organization, a non-profit organization, received the following donations during the period: a. January 1, 20x1: Land with fair value of P4,000,000 to be used at the discretion of GreenThinkers b. February 15, 20x1: Cash of P8,000,000, restricted for the acquisition of a truck. The truck will be used in GreenThinker’s outreach programs c. March 1, 20x1: Investment in equity securities with fair value of P2,000,000 to be held indefinitely. Only the investment income shall be used by GreenThinkers on its current operations d. May 1, 20x1: JPIA and JPAMA members from different universities contributed services in a treeplanting activity initiated by GreenThinkers. Although the volunteers rendered their services for free, GreenThinkers estimates that the fair value of these services would amount to P20,000 On June 30, 20x1, GreenThinkers acquired a truck for P8,000,000 and received dividends of P240,000 from the equity securities. The temporarily restricted contributions revenue is: 8000000 20. Investments are reported by NPEs at Fair value 21. Your answer should be a whole number. Do not use comma, decimal, and peso sign to encode your answer. GreenThinkers Organization, a non-profit organization, received the following donations during the period: a. January 1, 20x1: Land with fair value of P4,000,000 to be used at the discretion of GreenThinkers b. February 15, 20x1: Cash of P8,000,000, restricted for the acquisition of a truck. The truck will be used in GreenThinker’s outreach programs c. March 1, 20x1: Investment in equity securities with fair value of P2,000,000 to be held indefinitely. Only the investment income shall be used by GreenThinkers on its current operations d. May 1, 20x1: JPIA and JPAMA members from different universities contributed services in a treeplanting activity initiated by GreenThinkers. Although the volunteers rendered their services for free, GreenThinkers estimates that the fair value of these services would amount to P20,000 On June 30, 20x1, GreenThinkers acquired a truck for P8,000,000 and received dividends of P240,000 from the equity securities. The net effect of the transactions in the year-end permanently restricted net assets is: 2000000

22. The following gifts are received in Year 1 by an NPE: a. P2,000 specified by the donor to be used to pay salaries b. P10,000 for new conference room furniture c. P5,000 to be held for one year before being expended The salaries are paid in Year 2 and the conference room furniture is purchased in Year 1. How much should be shown as increases in Temporarily Restricted Net Assets in Year 1? P7,000.00 23. Donor-restricted contributions are recognized in the financial statements when Received 24. The following gifts are received in Year 1 by an NPE: a. P2,000 specified by the donor to be used to pay salaries b. P10,000 for new conference room furniture c. P5,000 to be held for one year before being expended The salaries are paid in Year 2 and the conference room furniture is purchased in Year 1. How much should be reclassified on the Statement of Activities in Year 2 from the Temporarily Restricted Net Assets to the Unrestricted column? P7,000.00 25. Your answer should be a whole number. Do not use comma, decimal, and peso sign. Fighting Organization, an NPE, received the following contributions during 20x1: a. P400,000 cash restricted for the purchase of equipment b. P1,000,000 cash restricted for the renovation of an old building owned by Fighting Fighting made the renovation in 20x2 and acquired the equipment in 20x3. Net assets released from restrictions in Fighting’s 20x2 statement of activities is: 1000000 26. When are unconditional promises to give recognized as revenue? In the period the promise is received 27. Your answer should be a whole number. Do not use comma, decimal, and peso sign to encode your answer. GreenThinkers Organization, a non-profit organization, received the following donations during the period: a. January 1, 20x1: Land with fair value of P4,000,000 to be used at the discretion of GreenThinkers b. February 15, 20x1: Cash of P8,000,000, restricted for the acquisition of a truck. The truck will be used in GreenThinker’s outreach programs c. March 1, 20x1: Investment in equity securities with fair value of P2,000,000 to be held indefinitely. Only the investment income shall be used by GreenThinkers on its current operations

d. May 1, 20x1: JPIA and JPAMA members from different universities contributed services in a treeplanting activity initiated by GreenThinkers. Although the volunteers rendered their services for free, GreenThinkers estimates that the fair value of these services would amount to P20,000 On June 30, 20x1, GreenThinkers acquired a truck for P8,000,000 and received dividends of P240,000 from the equity securities. The “net assets released from restrictions” in 20x1 is: 8000000 28. A contribution is a(an) Unconditional transfer of cash 29. Unconditional promise to give that include promises of payments due in future periods are reported as Restricted revenues 30. A nonprofit organization’s restricted fund typically is established in rationale to Provisions of a contribution to the organization 31. On the financial statement of an NPE, “fund balance” is replaced by Net assets 32. Your answer should be a whole number. Do not use comma, decimal, and peso sign to encode your answer. GreenThinkers Organization, a non-profit organization, received the following donations during the period: a. January 1, 20x1: Land with fair value of P4,000,000 to be used at the discretion of GreenThinkers b. February 15, 20x1: Cash of P8,000,000, restricted for the acquisition of a truck. The truck will be used in GreenThinker’s outreach programs c. March 1, 20x1: Investment in equity securities with fair value of P2,000,000 to be held indefinitely. Only the investment income shall be used by GreenThinkers on its current operations d. May 1, 20x1: JPIA and JPAMA members from different universities contributed services in a treeplanting activity initiated by GreenThinkers. Although the volunteers rendered their services for free, GreenThinkers estimates that the fair value of these services would amount to P20,000 On June 30, 20x1, GreenThinkers acquired a truck for P8,000,000 and received dividends of P240,000 from the equity securities. The unrestricted contributions revenue is: 4000000 33. Alice makes a cash gift which has no strings attached to a political party. It is recorded as Revenue-unrestricted contribution 34. Which of the following donated services would not be recognized as contributions in the statement of activities? Services contributed by lay volunteers manning a phone bank 35. Contributions are reported in the statement of activities using all of the following categories except Board-restricted 36. Which of the following contributions are not recognized in the statement of activities? None of these 37. Income earned from temporary endowments that can be spent only on certain programs but has not yet been spent would be reported in the statement of activities as Temporarily restricted 38. Your answer should be a whole number. Do not use comma, decimal, and peso sign.

Revlove Organization, an NPE, received the following during 20x1: a. Land with fair value of P40,000,000 to be sold to acquire a bus b. Shares of stocks with fair value of P12,000,000 to be retained indefinitely. The dividends from the shares will be used to support current operations. As a result of these donations, Revlove should report an increase in temporarily restricted net assets in the amount of: 40000000 39. One characteristic of NPEs that is comparable with that of government entities is Stewardship of resources 40. Your answer should be a whole number. Do not use comma, decimal, and peso sign. Maxi Organization, an NPE disclosed the following in its 20x1 notes to the financial statements. a. Received shares valued at P8,000,000 to be retained with the dividends used to support current operations b. Net resources of P4,000,000 invested in plant assets c. Received equipment valued at P20,000,000 which is to be sold with the proceeds used to renovate the children’s playground d. Board-designated fund of P2,400,000 e. Received P80,000 cash from a donor who did not specify any purpose restrictions on the contribution however, the donor specified that the donation should be used until 20x2 f. Received P3,200,000 from a donor who stipulated that the contribution shall be invested indefinitely and that the earnings shall be used for scholarships. Investment income in 20x1 amounted to P200,000 The total temporarily restricted net assets is: 20280000 41. How would the expiration of a prior-year donor restriction as to purpose be reflected in the current year’s statement of activities? A separate line item reclassification between the temporarily restricted and unrestricted categories 42. Which of the following contributions are credited to a Deferred Revenue account until spending occurs? None of these 43. Your answer should be a whole number. Do not use comma, decimal, and peso sign. Fighting Organization, an NPE, received the following contributions during 20x1: a. P400,000 cash restricted for the purchase of equipment b. P1,000,000 cash restricted for the renovation of an old building owned by Fighting Fighting made the renovation in 20x2 and acquired the equipment in 20x3. Total revenue recognized on the contributions in 20x1 is: 1400000 44. How would spending of money donated in the prior year for spending in the current year be reported in the statement of activities?

As an expense in the unrestricted category 45. Your answer should be a whole number. Do not use comma, decimal, and peso sign. Use parentheses to indicate DECREASE. K2, an NPE, had the following transactions during 20x1: a. Received contribution of P800,000 to be used for student scholarships. Of this amount, P480,000 was expended during the year b. Expended P200,000 for student scholarships from a P240,000 grant received in previous year The net effect of the transactions in K2’s 20x1 temporarily restricted net assets is: 120000 46. Your answer should be a whole number. Do not use comma, decimal, and peso sign to encode your answer. GreenThinkers Organization, a non-profit organization, received the following donations during the period: a. January 1, 20x1: Land with fair value of P4,000,000 to be used at the discretion of GreenThinkers b. February 15, 20x1: Cash of P8,000,000, restricted for the acquisition of a truck. The truck will be used in GreenThinker’s outreach programs c. March 1, 20x1: Investment in equity securities with fair value of P2,000,000 to be held indefinitely. Only the investment income shall be used by GreenThinkers on its current operations d. May 1, 20x1: JPIA and JPAMA members from different universities contributed services in a treeplanting activity initiated by GreenThinkers. Although the volunteers rendered their services for free, GreenThinkers estimates that the fair value of these services would amount to P20,000 On June 30, 20x1, GreenThinkers acquired a truck for P8,000,000 and received dividends of P240,000 from the equity securities. The net effect of the transactions in the year-end temporarily restricted net assets (ignore depreciation) is: 0 47. Unconditional transfers of cash or other resources to an NPE in a voluntary nonreciprocal transaction is the definition of Contributions 48. A gift in kind for which there is little or no discretion on disposition should be accounted for by an NPE as An agency transaction 49. Which of the following contributions are credited directly to the entity’s net assets when received? None of these 50. A pledge is unconditional if it Depends only on the passage of time (ITO ANG SAGOT KAPAG WALA SA CHIOCES YUNG NASA #51) 51. A pledge is unconditional if it Depends only on the passage of time or depends on the demand by the university to be paid

ACCOUNTING FOR NPES - HOSPITALS 1. The governing board of Simplicity Hospital, which is operated by a religious organization, designated P500,000 of cash for future expansion of the hospital. On the hospital's statement of financial position, the cash designated for future plant expansion would be disclosed in which of the following classes of net assets? Unrestricted net assets 2. Faith Hospital, an NPE, rendered P2,400,000 in services to patients, P2,000,000 of which is charged to PhilHealth. It is estimated that only P2,120,000 will be collected. Of the P280,000 difference, P140,000 is the estimated contractual agreements with PhilHealth, P20,000 is allowance for discounts to hospital employees, P80,000 is charity care, and P40,000 is the uncollectible accounts. The net patient revenue is: 2160000

3. The following accounts are taken from ledger balances of Caring & Loving Hospital, an NPE: Gross patient service revenue, P11,049,200 Research grant revenue to the extent expended, P361,000 Revenues from sale of cafeteria meals to guest and employees, P108,000 Donated services of nurses and physicians (otherwise purchase), P145,000 Unrestricted gifts and grants, P100,200 Unrestricted endowment income, P12,000 Gifts restricted for equipment purchase, P540,000 Donor-restricted investments for permanent endowment, P150,000 Temporarily restricted endowment income, P25,000 Revenues from parking lot, P31,000 Revenues from vending machine, P68,000 Income on investment whose use is limited by the board for capital improvements, P207,000 Contributions restricted by donor for pediatric unit operations, P225,000 Contractual adjustments, P1,328,500 Courtesy allowances/...