EASY

1. Net assets that are restricted by the governing board of a non-government, not-for-profit
organization are reported as a part of?
2. How will a nongovernment, not-for-profit entity record an agency transaction in which it
receives resources Asset account
3. In preparing the statement of cash flows for a nongovernment, not-for-profit entity, cash
contributions that are restricted for a long term purposes are classified as? Financing activities
4. On the statement of activities for a non-for-profit performing arts center, expenses should not
be deducted from
I. Unrestricted Revenues
II. Temporarily restricted revenues
III. Permanently restricted revenues
5. Funds received by a college from donors who have stipulated that the principal is
nonexpendable but that the income generated may be expended by current operating funds
would be accounted for in the? Endowment fund
6. University of Santo Tomas unrestricted current funds comprised the ff:
Assets
Liabilities (including deferred revenues of P100,000)

P5,000,000
3,000,000

The fund balance of net assets of University of Santo Tomas unrestricted current fund was

7. For the 2011 summer session, Far Eastern University assessed its students P300,000 for
tuition and fees. However, the net amount realized was only P290,000 because of the ff.
reductions:
Tuition remissions granted to faculty members families

P3,000

Class cancellation refunds

7,000

How much unrestricted current funds revenues from tuition and fees should Far Eastern
University report for the period?

8. Which of the ff. funds are usually, encountered in a not-for-profit private university?
Loan funds

Life income funds

No

Yes

No

No

Yes

No

Yes

Yes

9. Tina Hospitals patient service revenues for services provided in 2011, at established rates,
amounted to P8,000,000 on the accrual basis. For internal reporting, Tina uses the discharge
method. Under this method, patient service revenues are recognized only when patients are
discharged, with no recognition given to revenues accruing for services to patients not yet
discharged. Patient service revenues at established rates using the discharged method
amounted to P7,000,000 for 2011. According to generally accepted accounting principle. Tina
should report patient service revenues for 2011 f

10. FEU Hospital a nonprofit hospital affiliated with FEU University, received the ff. cash
contributions from donors during the year ended December 31, 2011.
Contributions restricted by donors for research
Contributions restricted by donors for capital acquisitions

P50,000
250,000

AVERAGE
1. No ways, a voluntary health and welfare organization, received a contribution of P10,000
from a donor in 2016. The donor didn't specify any use restrictions on the contributions;
however, the donor specified that the donation should not be used until 2017. The governing
board of No Ways spent the contribution in 2017 for fun raising expenses. For the year ended
December 31, 2016. No ways should report the contribution on its?

2. Seniors Association is a not for profit organization that provide services to senior citizens.
Seniors employs a full-time staff of 10 people at an annual cost of 150,000. In addition, two
volunteers works as part-time secretaries replacing last years' full time secretary who earned
10,000. Services performed by volunteers for special events had an estimated value of 15,000.
These volunteers were employees of local businesses and they received small value items for
their participation. What amount should Seniors report for salary and wage expenses?

3. Ginmiguel, a not-for-profit organization, received the following pledges:

Unrestricted

200,000

Restricted for capital additions 150,000

All pledges are legally enforceable; however, Ginmiguel experience indicates that 10% of all
pledges prove to be uncollectable. What amount should Ginmiguel report as pledges receivable,
net of any required allowance account
4. On December 30, 2011 Portal Museum, a not-for-profit organization, received a P7,000,000
donation of Night Co., shares with donor-stipulated requirements as follows:

Shares valued at P5,000,000 are to be sold with the proceeds used to erect a
public viewing building.
Shares valued at P2,000,000 are to be retained with the dividends used to
support current operations.

As a consequence of the receipt of the Night shares, how much should Portal report as
temporarily restricted net assets in the statement of financial position (balance sheet)?
5. Tau Gamma, a fraternal organization, should prepare a statement of financial position and
which of the ff financial staements?
I. Statement of activities
II. Statement of changes in fund balances
III. Statement of each flows

6. Williams Hospital, a nonprofit hospital affiliated w/ a religious group reported the ff.
information for the year ended December 31, 2011:
Gross patient services revenue at the hospitals full
established rates

P980,000

Bad debts expense

10,000

Contractual adjustments w/ third-party payors

100,000

Allowance for discounts to hospital employees

15,000

On the hospitals statement of operations for the year ended December 31, 2011, what amount
should be reported as net patient service revenue?
7. Clara Hospital, a private not-for-profit hospital, earned P250,000 of gift shop revenues and
spent on research during the year ended December 31, 2012. The P50,000 spent on research
was part of a P75,000 contribution received during December of 2011 from a donor who
stipulated that the donation be used for medical research. Assume none of the gift shop
revenues were spent in 2012. For the year ended December 31, 2012, what was the increase in
unrestricted net assets from the events occurring during 2012?

8. Albert University, a private not-for-profit university, had the ff. cash inflows during the year
ended June 30, 2011:
(1) P500,000 from students for tuition.
(2) P300,000 from a donor who stipulated that the money be invested indefinitely.
(3) P100,000 from a donor who stipulated that the money be spent in accordance with
the wishes of Alberts governing board.
On Albert Universitys statement of cash flows for the year ended June 30,2011, what amount of
these cash flows should be reported as operating activities?
9. Which of the ff. transactions would result in an increase in unrestricted net assets for the year
ended December 31, 2011?
I. A private not-for-profit hospital earned interest on investments which were boarddesignated.
II. A voluntary health and welfare organization received unconditional promises to give
(pledges) which will not be received until the beginning of 2012. The donors placed no
restrictions on their donation.
10. On March 1, 2011, Katkat Ong established a P100,000 endownment fund, the income from
which is to be paid to Cebu Hospital for general operating purposes. Cebu does not control the
funds principal. Katkat Ong appointed Philippine National Bank as trustee of this fund. What
journal entry required by Cebu to record the establishment of the endownment?

DIFFICULT
1. On December 31, 2011, FAITH HEAVEN, a voluntary health and welfare organization,
received a pledge from a donor who stipulated that P 1,000 would be given to the
organization each year for the next 5 years, starting on December 31, 2012. Present
value factors at 6% for 5 periods are presented below:
Present Value of an ordinary annuity 5 periods at 6%......4.21236
Present Value of an annuity due 5 periods at 6%.............4.46511
For the Year ended December 31, 2011, FAITH HEAVEN should report, on its statement
of activities (Account title and amount)
2. Sienna College, a private not-for-profit college, received the following contributions
during 2011:
I.
P5, 000,000 from alumni for construction of a new wing on the science
building to be constructed in 2012.
II.
P1, 000,000 from a donor who stipulated that the contribution be invested
indefinitely and that the earnings be used or scholarships. As of
December 31, 2011, earnings from investments amounted to P50, 000.
For the year ended December 31, 2011, what amount of these contributions should be
reported as temporarily restricted revenues on the statement of activities?
3. In 2011, Manila Health, a voluntary health and welfare organization, received a bequest
of a P200, 000 certificates are held until maturity in 2012. The testators only stipulations
were that the interest revenue be used to finance salaries for a preschool program.
Interest revenue for 2012 was P16, 000. When the certificate matured and was
redeemed, the board of trustees adopted a formal resolution designating P40, 000 of the
proceeds for the future purchase of equipment for the pre-school program. What amount
should manila report in its 2012 year-end current funds balance sheet as fund balance
designated for the pre-school program?
4. During 2011, Ms. Forendo, a prominent art collector, donated several items in her
collection to the Davao Museum, a private, not-for-profit organization. Ms. Florendo
stipulated that her contribution be shown to the public that it should be preserved and
not be sold. Davaos accounting policy is to capitalize all donations of art, historical
treasures, and similar items. On the date of donation; what was the effect of Ms.
Florendos donation on Davaos financial statements?
a. Temporarily restricted net assets increased
b. Reclassification caused a simultaneous increase in permanently restricted net
assets and a decreased in temporarily restricted net assets
c. There was no effect on any class of Davaos net assets
d. Permanently restricted net assets increased
5. In April 2011, Mal lush donated P100, 000 cash to her church with the stipulation that the
income generated from this gift is to be paid to Mal Lush during her lifetime. The
conditions of this donation are that, after Mal Lush dies. The principal can be used by the

church received interest of P8, 000 on the P100, 000 for the year ended March 31, 2012,
and the interest was remitted to Mal Lush. In the churchs March 31, 2012 financial
statements.
a. P 8,000 should be reported under support and the revenue in the activity
statement.
b. P 9, 200 should be reported under support and revenue in the activity
statement.
c. P 100, 000 should be reported as deferred support in the balance sheet.
d. The gift and its terms should be disclosed only in notes to financial
statements.
6. During the year ended December 31, 2011, The Mars foundation received the following
contributed services:
I.
Tamayo and Bonafe, attorneys-at-law, contributed their services which
involved advice related to the foundations regular endowments.
II.
Senior citizens participated in a telethon to raise money for a new music
building.
Which of these contributed services should be included in unrestricted revenues, gains
and other support on Mars foundations statement of activities for the year ended
December 31, 2011?
7. The Mahal Foundation, a not-for-profit organization, has the following cash contributions
and expenditures in 2011.
Unrestricted cash contributions of P500, 000.
Cash contributions of P200, 000 restricted by the donor to the acquisition
of property.
Cash expenditures of P 200, 000 to acquire property with the donation in
the above item.
Mahal statement of cash flows should include what amounts in the following Operating,
Investing and Financing Activities respectively.
8. Charity Fund is a voluntary welfare organization funded by contributions from the
general public. During 2011, unrestricted pledges of P100, 000 were received, half of
which were payable in 2011, with the other half payable in 2012 for use in 2012. It was
estimated that 20% of these pledges would be uncollectible. With respect to the
pledges , the amount that should be reported for 2011 as net contributions under public
support, is?

9. Mild Care Centers, Inc., a not-for-profit organization, receives revenue from various
sources during the year to support its day care center. The following cash amounts were
received during 2011:
P2, 000 restricted by the donor to be used for meals for the children

P1, 500 received for subscriptions to a monthly child care magazine with
a fair market value to subscribes of P1, 000.
P1, 000 to be used only upon completion of a new playroom that was
75% complete at December 31, 2011.

What amount should Mild Care Centers record as contribution revenue in its 2011
Statement of Activities?
10. During the year ended December 31, 2011 a not-for-profit performing arts entity received
the following donor-restricted contribution and investment income:
I.
Cash contribution on P 100, 000 to be permanently invested.
II.
II. Cash dividends and interest of P 6, 000 to be used for the
acquisition of theater equipment.
As a result of these cash receipts, the statement of cash flows for the year ended
December 31, 2011, would report an increase of (amount) from (what activity)?

ANSWER KEY:
Easy
1. C
2. D
3. C
4. A
5. I only
6. 2,000,000
7. 293,000
8. D
9. 8,000,000
10. 300,000
Average
1. D
2. 160,000
3. 315,000
4. 5,000,000
5. Both I and II
6. 865,000
7. 250,000
8. 600,000
9. I only
10. Memorandum Entry Only
Difficult
1. Temporarily restricted revenues of P4,212
2. 5,050,000
3. 40,000
4. D
5. C
6. I Only
7. 500,000-(200,000)-200,000
8. 40,000
9. 2,500
10. P106,000 from Financing Activities