E22 - 2 4. Unconditional promises to give that are collectible within one year o

Question

E22 - 2

4. Unconditional promises to give that are collectible within one year of the financial statement date:

a. should be reported at their gross amount

b. Should be reported at the gross less an allowance for uncollectible accounts

c. Should be reported at the present value of the amounts expected to be collected, using the donor's incremental borrowing rate

d. Should not be reported until collected

5. In preparing the statement of cashe flows for a nongovernmental not-for-profit entity, cash contributions that are restricted for long-term purposes are classified as:

a. Operating activities

b. Investing activities

c. Financing activities

d. None of the above

Explanation / Answer

Ans 4 d. Should not be reported until collected

Unconditional promises to give that are collectible within one year of the financial statement date Should not be reported until collected.

Ans 5 c. Financing activities

Since these are received they are Cash inflows and since they are received as contributions, these must be considered as Financing activity.

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