32. In 2017, a private, nonprofit university received a donation of a work of ar

Question

32.       In 2017, a private, nonprofit university received a donation of a work of art that was estimated to be worth $1,500,000. The university does not have a collection. of art. Which of the following statements is correct?

A.The contribution will be reported as an increased in permanently restricted net assets on the 2017 Statement of Changes in Net Assets.

B.The university can sell the work of art in the future as long as it replaces the work of art with a similar asset.

C.A and B.

D.Neither A nor B.

34.       A nonprofit, private university incurred $20,000 of expenses for research activities in 2017. During 2017, the university received $24,000 of donations that were restricted for research, and it expected to spend all of the donations during the year. On the university’s Statement of Changes in Unrestricted Net Assets for 2017, which of the following statements is correct if the university reported the $24,000 donated as unrestricted?

A.There is no effect on the amount reported by the university for revenues and other additions.

B.The $4,000 not spent is reported as a reclassification to temporarily restricted net assets—establishment of program restrictions.

C.A and B.

D.Neither A nor B.

35. One difference between the financial statements of private, nonprofit hospitals and those of voluntary health and welfare organizations is:

A.         Hospitals are not required to prepare a Statement of Functional Expenses.

B.         Voluntary health and welfare organizations do not have to report a performance Indicator on their Statement of Activities.

C.        A and B

D.        Neither A nor B.

35. One difference between the financial statements of private, nonprofit hospitals and those of voluntary health and welfare organizations is:

A.         Hospitals are not required to prepare a Statement of Functional Expenses.

B.         Voluntary health and welfare organizations do not have to report a performance Indicator on their Statement of Activities.

C.        A and B

D.        Neither A nor B.

Explanation / Answer

Q32) the correct treatment for the given transaction shall be option A) the contribution shall be reported as increased in permanently restricted net assets on the 2017 statement of changes in Net Assets.

Q34) the correct answer for the given transaction shall be b)

Q35) the correct answer for the given transaction shall be D) neither A nor B

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