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FINAL
EXAM REVIEWER
Questions Answers
The Weyman Hospital, a private, not- 880000
for-profit institution, reported the
following information: Gross
patient service revenue $1,000,000 Allowance for discounts to hospital
employees 20,000 Bad debt
expense 40,000 Contractual
adjustments 100,000 What
amount should the hospital report as
net patient service revenue?
Which one of the following is not a Statement of Fund Balance

required financial statement for a
private voluntary health and welfare
organization?
Cash flows from a public university Cash flows from operations.

bookstore would appear on the
statement of cash flows as
Which of the following types of health Yes yes yes

care organizations recognize
depreciation expense? Investor-
Owned; Not-for-Profit Organizations;
Governmental Health Care
Which of the following transactions of I Only

a private voluntary health and
welfare organization would increase
temporarily restricted net assets in the
statement of activities for the current
year? I. Received a contribution of
$20,000 from a donor in the current
year who stipulated that the money
not be spent until the following year.
II. Spent $25,000 for fund raising during
the current year from a donation from
the previous year.
In November 20x1 Gilmore Heating An increase in unrestricted revenues

and Air Conditioning Service repaired and an increase in expenses on the
the air conditioning system for statement of activities.

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GenCare, a voluntary health and
welfare organization and mailed an
invoice for $3,000. On December 25,
a note was received by GenCare
indicating that Gilmore was canceling
the invoice and that repairs were
being donated. For the year ended,
December 31, 20x1, GenCare should
report these contributed services as:
CIBA, a non-profit performing arts Temporarily restricted and

organization, received a contribution Permanently restricted respectively
of a term endowment and a regular
endowment. These endowments
should be reported on the statement
of activities in Term Endowments and
Regular Endowments as :
On December 30, 19X4, Leigh 5000000

Museum, a not-for-profit organization,
received a $7,000,000 donation of
Day Co. shares with donor stipulated
requirements as follows: Shares
valued at $5,000,000 are to be sold
with the proceeds used to erect a
public viewing building. Shares
valued at $2,000,000 are to be
retained with the dividends used to
support current operations. Leigh adopted of FASB Statement
No. 117, Financial Statements of Not-
for-Profit Organizations. As a
consequence of the receipt of the
Day shares, how much should Leigh
report as temporarily restricted net
assets on its 19X4 statement of
financial position?
Which of the following statements is The GAM for NGAs requires the
incorrect? Collecting Officer to issue an official
receipt to acknowledge the receipt
of the Notice of Cash Allocation.

FINAL EXAM REVIEWER
Which of the following is a non- Collection of taxes
exchange transaction?
Which of the following is not an It is subsequently measured at fair

essential characteristic of a financial value.
instrument?
A hospital has the following account

balances: Revenue from
newsstand $ 50,000 Amounts 690000
charged to patients 800,000 Interest income 30,000 Salary
expense – nurses 100,000 Bad
debts 10,000 Undesignated gifts
80,000 Contractual adjustments
110,000 What is the hospital’s net
patient service revenue? 
Ellen College, a private not-for-profit Temporarily restricted revenue.

institution, received a $100,000 grant
for faculty research in 20x1. The grant
money was not spent until 20x2. For
20x1, Ellen College should report the
contribution as:
Which of the following statements is Appropriation is also called

incorrect? obligational authority.
An NPO hospital has the following 430000

account balances: Amount
charged to patients $500,000 Revenue from newsstand 15,000 Undesignated gifts 40,000 Contractual adjustments 70,000 Interest income 12,000 Salaries
expense – nurses 120,000 Bad
debts 8,000 What is the hospital’s
net patient service revenue? 
Which of the following information is Effects of current period errors.

not reported in the statement of
changes in net assets/equity?

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Entity A is a government hospital. upon billing, when goods are
Entity A operates a pharmacy within transferred to the buyer.
the hospital. Entity A would most likely
recognize revenue from sales of
medicines in the pharmacy
It is an authorization issued by the Allotment

DBM to NGAs to incur obligations. It is
also referred to as Obligational
Authority.
Which of the following does not affect closing of the “Cash-Treasury/Agency

the amount of surplus or deficit that is Deposit, Regular” account
reported in the statement of financial
performance?
The 8-digit Revised Chart of Accounts None of these

(RCA) Code for revenues starts with
number
Entity A, a government entity, has an DR) Subsidy from National
unused NCA of ₱50,000 at the end of Government CR) Cash-Modified
the current year. The entry to record Disbursement System (MDS), Regular
the reversion of unused NCA is
Which of the following would result to The repayment of a loan payable is

an increase or decrease in the forgiven.
revenue reported by a government
entity in its statement of financial
performance?
A government entity derecognizes Fully depreciated PPE

which of the following?
Home Care, Inc., a nongovernmental 250000

voluntary health and welfare
organization, received two
contributions in 2003. One
contribution of $250,000 was restricted
for use as general support in 2004. The
other contribution of $200,000 carried
no donor restrictions. What amount
should Home Care report as

FINAL EXAM REVIEWER
temporarily restricted contributions in
its 2003 statement of activities.
A statement of functional expenses is Fraternal Organization

required for which of the following
private not-for-profit institutions? (use
SFAS 117 in answering this question)
This type of budget is prepared in Balanced budget

such a way that estimated revenues
exceed estimated expenditures.
The Johnson Hospital, a private not- 80000

for-profit hospital, received the
following revenues in the current
year: Proceeds from sales of the
Hospital’s flower shop $60,000 Dividends and interest revenue not
restricted $20,000 Cash
contributions for the renovation of the
children’s ward in the Hospital
$200,000 Which of these
amounts should be reported as other
revenues and gains (other revenue)
on the Statement of Operations? 
On December 31, 20X1, the Board of No effect for both

Trustees of a private, not-for-profit
college designated $5,000,000 of
unrestricted net assets for the
construction of an addition to the
music building. What effect does this
designation have on the college’s
unrestricted and temporarily restricted
net assets shown on the statement of
financial position on December 31,
20X1? For Unrestricted Net Assets and
Temporarily restricted Net Assets
During the period, Entity A, a None of these

government entity, withheld ₱100,000
taxes from its payments to employees

FINAL EXAM REVIEWER
and suppliers. On September 14 of the
current year, Entity A remitted the
taxes withheld to the BIR through Tax
Remittance Advice. The entry to
record the remittance includes
If plotted on a graph, the periodic downward line sloping to the right

interest expenses recognized on
bonds issued at a premium will show
a: (X axis – time; Y axis - ₱)
The operator in a service concession private entity

arrangement is a
Gerlack College, a private, not-for- Refundable advance.

profit institution, received a donation
of $2,000,000 as a challenge grant. If
the college raises an additional
$2,000,000 within the next two years, it
may keep the donation. If it fails, the
$2,000,000 must be returned to the
donor. How would the college record
the receipt of the grant?
Arrange the following steps in the IV, I, V, II and III

budget process according to the
sequence that they appear in the
budget cycle. Allotment Disbursement authority Disbursement Appropriation Incurrence of
obligation
A private not-for-profit hospital Only in the notes to the financial

provided $150,000 in charity care for statements.
the current year. The hospital should
report this charity care as
The following contributions were A retired college professor donated

received by a private voluntary reading services to senior citizens. The
health and welfare organization. organization would not have paid for
Which of these would not be these services if they had not been
donated.

FINAL EXAM REVIEWER
recorded as an increase in
unrestricted revenue?
According to the GAM for NGAs, Heritage assets

these assets are those which have
historical, cultural and environmental
significance, and are intended to be
preserved for future generations.
Entity A, a government entity, Appropriation

receives notice that for the current
year, the maximum amount it can
spend on maintenance and other
operating expenses is ₱10B. This event
can be described as
When determining depreciation, an

entity considers all of the following Whether the asset is classified as with
except finite or indefinite useful life.
Which of the following statements is Unreleased checks are perforated.

incorrect regarding the accounting
for unreleased checks by a
government entity?
The main purpose of the statement of to enhance the transparency of

comparison of budget and actual financial reporting of the government.
amounts is
Electra, a not-for-profit performing arts Fair value and Equity method

organization, held some donor respectively
restricted endowment funds which
are invested in stocks that are listed
on the NY Stock Exchange, so the fair
values are readily determinable. Most
of the investments represent amounts
between 2% and 5% of the
outstanding common stock of the
investee corporations. However,
Electra does own stock in one
company that gives it the ability to
exercise significant influence over the
operating and financing policies of

FINAL EXAM REVIEWER
the investee company. How should
these two types of investments be
reported on Electra’s Statement of
Financial Position at year end? Equity
Securities 2% - 5% ownership and for
Equity Securities. significant influence
A journal entry with a credit to the Check Disbursements Journal

“Cash-Modified Disbursement System
(MDS), Regular” account will most
likely be recorded in the
Lessee enters into a lease contract The lease transfers ownership of the
with Lessor. Which of the following leased asset to the Lessee if the
would most likely indicate a Lessee pays the Lessor the leased
substantial transfer of risks and asset’s fair value, to be determined
rewards incidental to ownership of an on payment date.
asset?
Entity A exchanges an item of PPE Add the cash paid to the initial
with Entity B. How should Entity A measurement of the asset received.
account for any cash paid or
received from the exchange?
Vista, a voluntary health and welfare Unrestricted revenue.

organization, received a donation of
$100,000 to be spent in accordance
with the wishes of the institution’s
Board of Trustees. This donation should
be reported on the statement of
activities as:
On the statement of activities for a Decrease in temporarily restricted

private not-for-profit institution, the and increase in unrestricted net
account, net assets released from assets.
restrictions, would be shown under
revenues, gains, and other support as
a (use SFAS 117 in answering this
question)
Arrange the following steps in the V, II, IV, I and III

budget process according to the
sequence that they appear in the

FINAL EXAM REVIEWER
budget cycle. Allotment Bicameral deliberations Budget accountability reports President’s enactment of the
GAA Budget hearings with the
DBM
Guil College, a private not-for-profit 500000

college, received the following cash
inflows: Guil College, a private not-for-
profit college, received the following
cash inflows: $400,000 from
students for tuition. $200,000
from a donor who stipulated that the
money be invested indefinitely and
the earnings used for student
scholarships. $100,000 from a
donor who stipulated that the money
be spent according to the wishes of
the Board of Trustees. Which
amounts of these cash flows should
be shown on the cash flow statement
as cash from operating activities?
Entity A spends ₱20,000 on the repair As a minor repair

of one of its equipment. It is not clear
whether the repair is a major repair or
a minor repair. In accordance with
the GAM for NGAs, how should Entity
A account for the repair cost?
Which of the following is not one of Sales Journal

the special journals prescribed by the
GAM for NGAs?

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FINAL

Which one of the following is not a Statement of Fund Balance

Cash flows from a public university Cash flows from operations.

Which of the following types of health Yes yes yes

Which of the following transactions of I Only

In November 20x1 Gilmore Heating An increase in unrestricted revenues

CIBA, a non-profit performing arts Temporarily restricted and

On December 30, 19X4, Leigh 5000000

Which of the following is not an It is subsequently measured at fair

A hospital has the following account

Ellen College, a private not-for-profit Temporarily restricted revenue.

Which of the following statements is Appropriation is also called

An NPO hospital has the following 430000

Which of the following information is Effects of current period errors.

It is an authorization issued by the Allotment

Which of the following does not affect closing of the “Cash-Treasury/Agency

The 8-digit Revised Chart of Accounts None of these

Which of the following would result to The repayment of a loan payable is

A government entity derecognizes Fully depreciated PPE

Home Care, Inc., a nongovernmental 250000

A statement of functional expenses is Fraternal Organization

This type of budget is prepared in Balanced budget

The Johnson Hospital, a private not- 80000

On December 31, 20X1, the Board of No effect for both

During the period, Entity A, a None of these

If plotted on a graph, the periodic downward line sloping to the right

The operator in a service concession private entity

Gerlack College, a private, not-for- Refundable advance.

Arrange the following steps in the IV, I, V, II and III

A private not-for-profit hospital Only in the notes to the financial

The following contributions were A retired college professor donated

According to the GAM for NGAs, Heritage assets

Entity A, a government entity, Appropriation

When determining depreciation, an

Which of the following statements is Unreleased checks are perforated.

The main purpose of the statement of to enhance the transparency of

Electra, a not-for-profit performing arts Fair value and Equity method

A journal entry with a credit to the Check Disbursements Journal

Vista, a voluntary health and welfare Unrestricted revenue.

On the statement of activities for a Decrease in temporarily restricted

Arrange the following steps in the V, II, IV, I and III

Guil College, a private not-for-profit 500000

Entity A spends ₱20,000 on the repair As a minor repair

Which of the following is not one of Sales Journal

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