Question: Select the best answer for each of
Select the best answer for each of the following multiple-choice questions:
1. A VHWO receives a donation that is restricted to its endowment and another donation that is restricted to use in acquiring a child care center. How should these donations be reported in the year received, assuming neither donation is expended in that year?
2. Donor-restricted contributions that have been given to a VHWO for the purpose of purchasing fixed assets should be recorded as increases to
a. Unrestricted Net assets.
b. Temporarily Restricted Net assets.
c. Permanently Restricted Net assets.
d. Fund Balance—Restricted.
3. The following correct entry is found on the books of a VHWO:
Unrestricted Net assets—Undesignated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . XXX
Unrestricted Net assets—Designated for AIDS Research. . . . . . . . . . . . . . . . . . . . . XXX
From the entry, one should conclude that the board of directors has
a. designated a portion of the unrestricted net assets for a future AIDS research program.
b. designated a portion of the restricted net assets for a future AIDS research program.
c. transferred resources to an AIDS research program.
d. directed that unused resources previously assigned to an AIDS research program be returned to the unrestricted net asset classification.
4. Friends of the Forest received a donation of marketable equity securities from a member. The securities had appreciated in value after they were purchased by the donor, and they continued to appreciate through the end of Friends of the Forest’s fiscal year. At what amount should Friends of the Forest report its investment in marketable equity securities in its year-end balance sheet?
a. Donor’s cost
b. Fair value at the date of receipt
c. Fair value at the balance sheet date
d. Fair value at either the date of receipt or the balance sheet date
5. The investments of a VHWO are carried at fair value. At the end of the period, there is a decrease in total fair value. The fair value decrease should
a. not be recorded until the loss is realized.
b. be debited to Realized Loss on Pooled Investments.
c. be debited to Endowment Fund Balance.
d. be debited to Net Decrease in Carrying Value of Investments.
Transcribed Image Text:
Donation for Endowment Donation for Child Care Center Contributions-Temporarily Restricted b. Deferred Capital Additions Contributions-Temporarily Restricted Capital Additions Contributions Unrestricted a. C. Contributions-Unrestricted d. Capital Additions Deferred Contributions Permanently Restricted Capital Additions Contributions-Temporarily Restricted e.
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