Review

Question 1

Management’s evaluation of the entity’s ability to continue as a going concern should:

Answer 1

Occur for each annual and interim reporting period

Question 2

What SEC form is not a periodic filing?

Answer 2

8K

Question 3

Debt Securities that are classified as Held-to-Maturity are reported at

Answer 3

Amortized Cost

Question 4

Debt Securities that are classified as Available-for-sale are reported at

Answer 4

Fair value

Question 5

First Commerical Bank received a cash contribution to establish an irrevocable charitable trust for the sole benefit of the Olde Towne Museum, a not-for-profit organization. The terms of the trust name First Commerical as the trustee, require distribution of income earned on the trust each year for three years, and, at the end of the three year period, require distribution of the principal to the museum. The museum would account for this transaction as:

Answer 5

a beneficial interest in the assets of the trust at fair value as a temporarily restricted contribution.

Question 6

According to the FASB conceptual framework, for financial reporting to be useful, it must:

Answer 6

Provide information useful for making business and investment decisions

Question 7

A corporation prepares its 2nd quarter interim report under U.S. GAAP. In preparing the reports, Lester will most likely:

Answer 7

Prepare the interim report with less due diligence that it would use for the annual report in order to issue it faster. Timeliness is emphasized

Question 8

Journal Entry to record compensation cost for Stock Options.

Answer 8

DR Compensation Expense

CR APIC - Stock Options

Question 9

Journal Entry to record the exercise of the Stock Options.

Answer 9

DR Cash
DR APIC - Stock Options
CR Common Stock (shs x par)
CR APIC - Capital in excess of par

Question 10

Required Financial Statements for Not-For-Profit

Answer 10

Statement of Financial Position
Statement of Activities
Statement of Cash Flows
*Statement of Functional Expenses (Required for Voluntary Health and Welfare organizations only)

Question 11

Program Services are:

Answer 11

the activities for which the organization is chartered. Examples:

• Universities: Education and Research
• Hospitals: Patient care and education
• Union: Labor negotiations and training
• Day Care: child care

Question 12

Support Services are:

Answer 12

Include everything not classified as a program service. Examples:

• Fundraising
• Management and general (admin expenses)
• Membership development

Question 13

Donated Services should be recorded as a contribution and expense at fair value if the services meeting the following criteria:

Answer 13

• Specialized skills are required and possessed by donor
• Otherwise needed by the organization
• Measurable
• Easily (at fair value)

SOME

Question 14

Governmental funds are accounted for using the:

Answer 14

• Modified Accrual basis of accounting

- Current financial resources measurement focus