Questions
Questions
Questions
2. Statement 1: Temporarily restricted funds include resources that are available for use by
authority of the Board of Directors but designated for specified purposes. F
Statement 2: United Hope, a private not-for-profit voluntary health and welfare
organization, received the following contributions in 2013: P50,000 from donors who
stipulated that the money not be spent until 2014 and P10,000 from donors who
stipulated that the contributions be used for the acquisition of equipment, none of which
was acquired in 2013. Both contributions increased unrestricted net assets for the year
ending December 31, 2013. F
GHI, a national government agency unit incurs an obligation for the purchase of garbage truck
for P450,000 on March 15, 2013. The dump truck is to be delivered on March 31, 2013 and the
motor form has agreed for a 30-day, interest free-delayed payment. i.e. payable on April 30,
2013. Assume a 12% tax on the purchase covered by TRA:
a. Equipment 450,000
Accounts payable 450,000
b. Equipment 450,000
Accounts payable 396,000
Subsidy income for NG 54,000
c. Equipment 450,000
Accounts payable 396,000
Due to BIR 54,000
d. Memorandum entry in RAOCO
a. Equipment 450,000
Accounts payable 450,000
b. Equipment 450,000
Accounts payable 396,000
Subsidy income for NG 54,000
c. Equipment 450,000
Accounts payable 396,000
Due to BIR 54,000
d. Memorandum entry in RAOCO
5. On April 30, 2013, the entry to be recorded by GHI will be:
6. The entry by GHI to record subsequent disposal of the withheld tax will be:
7. The statement of financial position (balance sheet) for Founders Library, a private
nonprofit organization, should report separate peso amounts for the librarys assets
according to which of the following classifications?
8. Statement 1: Temporarily restricted funds include resources that are available for use by
authority of the Board of Directors but designated for specified purposes. F
Statement 2: On November 30, 2013, Ms. X, an alumnus of ABC School, a private not-
for-profit high school, contributed P300,000, with the stipulation that the donation be
used for faculty travel expenses during 2014. During 2014, ABC spent all of the donation
in accordance with Ms. Xs wishes. For the year ended December 31, 2014, unrestricted
assets will decrease. F
a. Option A
b. Option B
c. Option C
d. Option D
10. What is the appropriate entry to record cash overage in the viewpoint of the NG?
a. I only
b. II only
c. Both I and II
d. Neither I nor II
12. Chicago Museum, a private nonprofit organization, has both regular and term
endowments. On the museums statement of financial position, how should the net assets
of each type of endowment be reported?
13. Mario is an employee of a national government agency. Mario was granted and received
cash advance of P30,000 for its travel. Mario liquidated the cash advance as follows (P):
The amount advanced had an un-liquidated balance of P2,000. What is the appropriate
entry to record the liquidation of the cash advance?
14. Statement 1: Under pure endowment fund, a principal may be expended on the basis of
passage of time. F
Statement 2: A storm broke glass windows in the building of New Life Meditators, a not-
for-profit religious organization. A member of congregation, a professional glazier,
replaced the windows at no charge. In New Life Meditators statement of activities, the
breakage and replacement of the windows should be reported as an increase in expenses
and in contributions revenue at the same time. T
I. Services requiring specialized skills, provided by individuals with those skills, that
otherwise would have to be purchased.
II. Services that create or enhance non-financial assets, which also require specialized
skills.
a. I only
b. II only
c. Either I or II
d. Neither I nor II
16. Statement 1: Contributed services are always recognized both as expenses and
contribution revenues if one of the conditions or requirements has been met. F
Statement 2: Philippine Museum, a private nonprofit organization, has both regular and
term endowments. On the museums statement of financial position, they are classified as
temporarily restricted and permanently restricted, respectively. F
17. W, a national government agency received cash allotment from its head agency totaling
P1,000,000. Of the total amount received, W distributed P100,000 to one of its operating
units as subsidy. What entry should be prepared to record the distribution of the subsidy
to Ws operating units?
19. Kerry College, a private not-for-profit college, received P25,000 from Ms. Mary Smith
on April 30, 2013. Ms. Smith stipulated that her contribution be used to support faculty
research during the fiscal year beginning on July 1, 2014. On July 15, 2014,
administrators of Kerry awarded research grants totaling P25,000 to several faculty in
accordance with the wishes of Ms. Smith. For the year ended June 30, 2014, Kerry
should report the P25,000 contribution as
21. According to FASB 124, not-for-profit entities should report investments in the financial
statements at:
I. fair market value.
II. lower of cost or market.
a. I only
b. II only
c. Either I or II
d. Neither I nor II
a. I only
b. I and II only
c. I and III only
d. I, II and III
X, a national government agency, established a petty cash fund of P20,000. During the month,
P12,000 of the petty cash liquidated but was not replenished. The total amount liquidated
pertains to the following (P):
Of the P4,000 office supplies, P1,500 is on hand at the end of the month.
24. How much should be reported as petty cash at the end of the month assuming that a
financial report is to be prepared?
a. P20,000 c. P8,000
b. P12,000 d. P1,500
25. What is the appropriate entry to record the liquidation of the petty cash fund?
26. A private university offers graduate assistantships to qualified students each year. In
exchange for the waiver of tuition, graduate assistants are required to assist faculty
members with research and other activities. Assume a graduate assistant received a
P4,000 tuition waiver for the current academic year. Based on these facts, the university
should record
27. Pera University, a private nonprofit university, had the following cash inflows during the
year ended June 30, 2013:
On Pera Universitys statement of cash flows for the year ended June 30, 2013, what
amount of these cash flows should be reported as operating activities?
a. P900,000 c. P500,000
b. P400,000 d. P600,000
28. Worldwide Foundation, a nonprofit private entity, received a cash donation for a specific
purpose in December of 2013 from Herold Smith. Worldwide Foundation is controlled
by Worldwide Helpers, a nonprofit entity that raises contributions for others. The
resources of Worldwide Foundation are used for the benefit of Worldwide Helpers. How
should Worldwide Foundation account for the cash contributions?
Agency A is a National Government with an NCA from the DBM for MOOE amounting to
P5,500,000. Of the total amount, P4,675,000 was obligated and 80% was paid. The remaining
20% was recognized as accounts payable.
29. How much is the un-obligated balance that should be shown in the Registry of Allotment
and Obligation MOOE?
a. P825,000 c. P1,760,000
b. P935,000 d. P110,000
a. 80% c. 85%
b. 20% d. 38%
31. What entry should be prepared to record the unutilized subsidy income from national
government?
The hospitals statement of cash flows for 2013 would report an increase in operating
activities of:
a. P325,000 c. P350,000
b. P375,000 d. P300,000
33. Rose Smith made a cash donation for a specific purpose in December 2013 to United
Ways, a private nonprofit organization that raises contribution for others. Assume United
Ways was (1) not granted variance power by Ms. Smith over her donation and (2) the
beneficiaries of the donation are not financially related to United Ways. How would
United Ways account for the donation?
34. Sea Lion Park, a private nonprofit zoological society, received contributions restricted for
research totaling P50,000 in 2013. None of the contributions were spent in 2013. In 2014,
P35,000 of the contributions were used to support the research activities of the society.
The net effect on the statement of activities for the year ended December 31, 2014, for
Sea Lion Park would be
35. Statement 1: On the statement of financial position for a private not-for-profit performing
arts center, expenses should be deducted from unrestricted revenue only. F
Statement 2: If the not-for-profit hospital has a total service revenue of P750,000 from its
patients, P35,000 of which is classified as charity care, the patients revenue to be
reported as part of the organizations net income on its statement of activities was
P715,000. F
36. Statement 1: A nonprofit organization is organized for the benefit of the public as well as
of the benefit of an individual proprietor, or a group of partners or stockholders. F
Statement 2: Unrestricted fund includes all assets of a nonprofit organization that are
available for use as authorized by board of directors. T
37. A private not-for-profit university generally must depreciate all tangible fixed assets,
except:
I. works of art and other historical treasures.
II. administration buildings.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
38. Clara Hospital, a private not-for-profit hospital, earned P250,000 of gift shop revenues
and spent P50,000 on research during the year ended December 31, 2014. The P50,000
spent on research was part of a P75,000 donor who stipulated that the donation be used
for medical research. Assume none of the gift shop revenues were spent on 2011. For the
year ended December 31, 2014, what was the increase in unrestricted net assets from the
events occurring during 2014?
a. P300,000 c. P250,000
b. P200,000 d. P275,000
41. Which of the following transactions of a private not-for-profit voluntary health and
welfare organization would have a net increase in temporarily restricted net assets on the
statement of activities for the year ended June 30, 2013?
I. Received a contribution of P10,000 from a donor on May 15, 2013, who stipulated
that the donation not be spent until August of 2013.
II. Spent P25,000 for fund raising on June 20, 2013. The amount expended came from a
P25,000 on March 12, 2013. The donor stipulated that the contribution be used for
fund-raising activities.
43. What is the appropriate entry to record receipt of NCA from the DBM?
44. What is the appropriate entry to record issuance of check for payment of payroll with net
amount of P600,000 received by the disbursing officer?
45. Statement 1: The concept of net income can be a primary objective of organizing a
nonprofit organization. F
Statement 2: In the statement of financial position, the balances of the Contractual
Adjustments account and the Expenditures Student Aid account are to be deducted
from the total service revenues to compute for the net service revenue for the month. F
47. For the year ended June 30, 2013, a private college received contributions from alumni
which were restricted for faculty research stipends to be awarded during the next fiscal
year. For the year ended June 30, 2013, these contributions should be disclosed on the
statement of activities of the private college as an increase in:
48. A private, not-for-profit university should prepare which of the following financial
statements?
49. The process of analyzing, classifying, summarizing and communicating all transactions
involving the receipt and disposition of government funds and property and interpreting
the results thereof is
a. The accounting of money collected is not separate and independent from the
accounting of the use or disbursement of said money collected
b. As to the basis of accounting, it is either cash or accrual basis not a combination of
both
c. Budgetary and real accounts are used and estimates are recorded and accounted
for
d. Depreciation of fixed assets is considered an overhead expense
51. A feature of government accounting that provides for the ceiling or maximum amount an
agency can spend or incur in the performance of its functions.
a. Always establish and maintain complete self-balancing account for each fund
b. Use only the cash basis of accounting
c. Not record depreciation expense in any of its funds
d. Use only the modified accrual basis of accounting
53. Catherine College, a private nonprofit college, received the following contributions
during 2013:
I. P5,000,000 from alumni for construction of a new wing on the science building to
be constructed in 2013
II. P1,000,000 from a donor who stipulated that the contribution be invested
indefinitely and that the earnings be used for scholarships. As of December 31,
2013, earnings from investments amounted to P50,000
For the year ended December 31, 2013, what amount of these contributions should be
reported as temporarily restricted revenues on the statement of activities?
a. P50,000 c. P5,000,000
b. P5,050,000 d. P6,050,000
54. For Guiding Light, a nongovernmental nonprofit religious organization, net assets that
can be expended in accordance with the wishes of the governing board of the
organization should be reported as
I. Unrestricted
II. Temporarily restricted
III. Permanently restricted
55. Statement 1: Program activities are goods and services provided to beneficiaries or
customers that fulfill the purpose of the organization. F
Statement 2: An endowment fund is used to account for assets held by a nonprofit
organization as a custodian. The assets are disbursed only as instructed by their owner. F
57. An authorization from a legislative body to make payments out of the National Treasury
under specified conditions and for specific purposes
58. The Jackson Foundation, a not-for-profit private organization, had the following cash
contribution and expenditures for 2013:
Jacksons statement of cash flows should include which of the following amounts?
59. As specifically provided for in the New Constitution, no money shall be paid out of the
National Treasury except in pursuant of a
a. Budget
b. Presidents directive or letter of instruction (LOI)
c. Fund
d. Appropriation
e. Cash allotment
60. United Hope, a private not-for-profit voluntary health and welfare organization, received
the following contributions in 2013:
I. P500 from donors who stipulated that the money not be spent until 2011
II. P1,000 from donors who stipulated that the contributions be used for the
acquisition of equipment, none of which was acquired in 2013
Which of the above events increased temporarily restricted net assets for the year ending
December 31, 2013?
a. I only c. II only
b. Both I and II d. Neither I nor II
61. Unrestricted gifts and endowment income of a private university are reported as
a. increases in the unrestricted current fund balance on the statement of changes in fund
balances
b. unrestricted revenues on the statement of current funds revenues, expenditures, and
other changes
c. unrestricted revenues on the statement of activities
d. increases in the unrestricted current fund balance on the statement of activities
62. A not-for-profit private college in Virginia created a separate foundation responsible for
obtaining financial support from alumni and others. Foundation assets are used for the
benefit of the college. Donations made to the foundation and subsequently transferred to
the college should be:
63. This is a sum of money or other government resources set aside for the purpose of
carrying out specific activities or attaining certain objectives in accordance with specific
regulations, restrictions, or limitations, and constitutes an independent fiscal and
accounting entity.
64. The agency responsible with the duty to keep the general accounts of the Government,
promulgate accounting rules and regulations, and to submit to the President and to
Congress an annual financial report of the Government including its subdivisions
a. Department of Finance
b. Department of Budget and Management
c. Bureau of Treasury
d. Commission on Audit
65. The term fund as used in government or fund accounting usually denotes a (an)
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 Day shares, how much
should Leigh report as temporarily restricted net assets on its 2013 statement of financial
position (balance sheet)?
a. P0 c. P5,000,000
b. P2,000,000 d. P7,000,000
68. Which agency of the government is in charge of the accounting receipt of the proceeds of
foreign and domestic loans as well as the servicing thereof?
69. On the statement of operations prepared for a private, not-for-profit hospital, patient
service revenue earned during the year is reported net of amounts for which of the
following items?
I. Contractual adjustments
II. Bad debts expense
a. I only
b. II only
c. I and II
d. Neither I nor II
70. A private, not-for-profit geographic society received cash contributions which were
restricted by the donors for the acquisition of fixed assets. In which section of the
statement of cash flows would these cash contributions be reported?
a. Financing activities
b. Investing activities
c. Operating activities
d. Capital and related financing activities
73. When reporting for governmental units, what type of costs should be presented in the
financial statements
75. Bridger Hospital, which is operated by a religious organization, provides charity care for
the indigent living in the region served by the hospital. How should Bridger report the
amount of its charity care on its financial statements?
76. When reporting for governmental units, what type of costs should be presented in the
financial statements?
a. Historical
b. Historical adjusted for price-level changes
c. Current appraisal
d. Historical and current presented in two separate columns
78. Michael Hospital, a nonprofit hospital affiliated with a private university reported the
following information for the year ended December 31, 2013:
Cash contributions received from donors for capital addition to be acquired in 2015,
P150,000
Proceeds restricted by donors for capital acquisitions, P75,000
Dividend revenue not restricted by donors or by law, P25,000
What amount should be reported as other revenues and gains on the hospitals
statement of operations?
a. P25,000 c. P100,000
b. P75,000 d. P250,000
79. A private, not-for-profit hospital uses a fund structure which includes a general fund and
donor restricted funds. The hospital's revenues from nursing programs and gift shops
should be accounted for in the:
80. A private, not-for-profit hospital uses a fund structure which includes a general fund and
donor restricted funds. Contributions received from donors for research to be conducted
by the hospital should be accounted for in the: