E22-3 1. Which of the following statements is not required for nongovernmental v

Question

E22-3

1. Which of the following statements is not required for nongovernmental voluntary health and welfare organizations that issue financial statements in accordance with GAAP?

a. Balance sheet

b. Statement of support, revenues, and expenses, and changes in retained earnings

c. Statememtn of functional expenses

d. Statement of cash flows

2. Voluntary health and welfare organizations:

a. Are required to use fund accounting principles to segregate unrestricted and restricted net assets

b. May report fund accounting information as additional information

c. Must report by funds if fund accounting principles are used for internal accounting purposes

d. Are prohibited from reporting by funds, even if fund accounting is used for internal accounting purposes

3. Fund-raising costs of voluntary health and welfare organizations are classified as:

a. Functional expenses

b. Program services

c. Supporting services

d. Management and general expenses

4. Volunteers collect money and nonperishable food for the Food Pantry, a nongovernmental VHWO, by going house to house once each year for donations. The services of the volunteers should be accounted for as follows:

a. The fair value of the service is estimated and recorded as contributions that increase unrestricted net assets

b. The fair value of the service is estimated and recorded as contributions that increase either unrestricted net assets or temporarily restricted net assets, depending on donor-imposed restrictions on the resources collected.

c. The per diem wage rages of the donors are recorded in unrestricted net assets

d. none of the above.

5. Unconditional promises to give (pledges) of nongovernmental voluntary health and welfare organizations are recognized as revenue and support in the period which:

a. The pledges are received

b. Cash is received from the pledges

c. All restrictions on pledged resources have been removed

d. Pledged resources are expended

Explanation / Answer

1. option (A) Balance sheet

2. option (D) Are prohibited from reporting by funds, even if fund accounting is used for internal accounting purposes

3. option (C) Supporting services

4. option (B) The fair value of the service is estimated and recorded as contributions that increase either unrestricted net assets or temporarily restricted net assets, depending on donor-imposed restrictions on the resources collected.

5. option (A) The pledges are received

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