5. Which statement below is not correct for financial statements of not-for-prof

ID: 2587729 • Letter: 5

Question

5. Which statement below is not correct for financial statements of not-for-profit entities?

MULTIPLE CHOICE
a. Pledged contributions are recognized in the accounting period in which pledged by donors.

b. A not-for-profit entity’s Statement of Financial Position includes a section specifically for net assets.

c. Contributed assets are recognized by a not-for-profit entity as public support contribution revenue.

d. Depreciation expense is not recognized by not-for-profit entities.

e. Not-for-profit entities issue a Statement of Activities.

9. Prior to ASU 2016-14, what are the three categories of net assets required by GAAP in reporting of a not-for-profit entity?

MULTIPLE CHOICE

a. Unrestricted, Temporarily Restricted, and Permanently Restricted.

b. Unrestricted, Restricted, and Fund Balance.

c. Restricted, Permanently Restricted, and Fund Balance.

b. Unrestricted, Temporarily Restricted, and Fund Balance.

c. None of these answer choices are correct.

10. On a Statement of Activities for a not-for-profit entity, what is the minimum required classification for categories of expenses?

MULTIPLE CHOICE

a. Fund-raising expenses and operating expenses.

b. Program services expenses and administrative services expenses.

c. Program services expenses and supporting services expenses.

d. Operating expenses and supporting services expenses.

e. Operating expenses and administrative expenses.

5. d. Depreciation expense is not recognized by not-for-profit entities

9. a. Unrestricted, Temporarily Restricted, and Permanently Restricted.

10. c. Program services expenses and supporting services expenses.

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