Private grants, like Ube Grants, which are essentially 22,000 is deemed to be charity care.

What is the
pass-through financial aid to students are accounted for hospital’s net patient revenue? 103,000
as
On December 31, 2009, Gawad Kalinga, a non-stock
a. Temporary restricted funds
non-profit organization, received a 1M fund for a
b. Unrestricted funds
philanthropist who impost the condition that said fund
c. Agency funds
shall only be used for the research project of the
d. Loan funds
organization. On December 31, 2010, Gawad Kalinga
used 100,000 of the said funds for the research project.
In 2020, Wells Hospital received an unrestricted
What is of the transaction on net assets of Gawad
bequest of common stock with a fair market value of
Kalinga for the year ended December 31, 2010?
50,000. The testator paid 20,000 for the stock in 2018.
a. Increase in unrestricted net asset by 100,000
Wells should record the bequest to
b. Decrease in temporarily restricted net asset by
a. Increase unrestricted net assets by 50,000
100,000
b. Increase temporarily restricted net assets by
c. Increase in temporarily restricted net asset by
50,000
1,000,000
c. Increase temporarily restricted net assets by
d. Decrease in unrestricted net asset by 100,000
20,000
d. Increase unrestricted net assets by 20,000
On January 1, 2020, Red Cross Inc. a non-profit
organization received 10M cash donation from Richy
A voluntary health and welfare organization has the
Rich who stipulated that the amount be invested
following expenditures:
indefinitely in revenue producing investment. The deed
Research to cure disease: 90,000
of donation also provides that the dividend income shall
Fund-raising costs: 60,000
be used for the acquisition of computers of NPO. On
Work to help disabled: 70,000
December 31, 2020, Red Cross received a 200,000 cash
Administrative salaries: 40,000
a dividend income from the investment of the fund. On
How much should be reported by the organization as
January 1, 2021 Red Cross Inc. acquired a personal
program service expenses? 160,000
computer at a cost of 50,000 with a useful life of 5 years
without residual value. How shall the cash flows be
A private not-for-profit organization spends 100,000 to
reported in NPO’s statement of cash flows for the year
send out a mailing. The mailing solicits donations and
ended December 31, 2021?
provides educational and other information about the
a. Cash receipts from operating activities by
charity. Which of the following is true?
200,000
a. No part of the 100,000 can be reported as
b. Cash receipts from financing activities by
program services.
10,200,000
b. Some part of the 100,000 must be reported as
c. Cash disbursements for investing activities by
program service expense.
50,000.
c. No autoritative guidance exits, so the
d. Cash disbursements for investing activities by
organization can allocate the cost as it believes
10,000,000
best.
d. Under certain specified circumstances, a
On January 1, 2020, Red Cross Inc. a non-profit
portion of the 100,000 should be allocated to
organization received 10M cash donation from Richy
program service expenses.
Rich who stipulated that the amount be invested
indefinitely in revenue producing investment. The deed
A not-for-profit hospital provides its patient with
of donation also provides that the dividend income shall
services that would normally be charged at 125,000.
be used for the acquisition of computers of NPO. On
However, a 15,000 reduction is estimated because of
December 31, 2020, Red Cross received a 200,000 cash
contractual adjustments. Another 13,000 reduction is
a dividend income from the investment of the fund. On
expected because of bad debts. Finally, an amount of
January 1, 2021 Red Cross Inc. acquired a personal
computer at a cost of 50,000 with a useful life of 5 years Share valued at 2,000,000 are to be retained with the
without residual value. How shall the transaction be dividends used to support current operations.
reported in NPO’s statement of activities for the year As a consequence of the receipt of the Day shares, how
ended December 31, 2020? much Leigh reported temporarily restricted net assets
a. There shall be increase in unrestricted net on its 2004 statement of financial position?
assets by 50,000 5,000,000
b. There shall be decrease in temporary restricted
net assets by 200,000 A voluntary health and welfare organization produces a
c. There shall be decrease in temporary restricted statement of functional expenses. What is the purpose
net assets by 50,000 and increase in temporary of this statements?
restricted net assets a. Separates current unrestricted and current
d. There shall be increase in temporarily restricted funds.
restricted net assets by 10M and increase in b. Separate program service expenses from
temporarily restricted net assets by 200,000 supporting service expenses.
c. Separates cash expenses from non-cash
The general purpose financial statements of non-
expenses.
government not-for-profit organizations would include
d. Separates
the following statements:
Pel museum is a not-for-profit organization. If Pel
a. Balance sheet; operating statement; sources
received a contribution of historical artifacts, it need not
and uses statement and statement of functional
recognize the contribution if the artifacts are to be sold
expenses
and the proceeds used to
b. Statement of financial position; statement of
activities; and statement of cash flows a. Support general museum activities
c. Statement of financial position; statement of b. Acquire other items for collections
activities; and sources and uses statement c. Repair existing collection
d. None of the above d. Purchase building to house collection

Mercy west, a not-for-profit health care facility located Which of the following events will increase temporarily
in Seattle, USA, charged a patient of 8,600 for services. restricted net assets on the statement of activities:
This amount was actually billed to a third-party payor. Receipts of 500 from a donor who stipulated that the
The third party payor submitted a check for 7,900 with a money should not be spent until next year.
note stating that “reasonable amount paid in full” which Receipts of 1,000 from donors who stipulated that the
of the following statement is true? contributions be used for the acquisition of equipment,
none of which was acquired in the current year.
a. The patient was responsible for paying the
a. Both I and II
remaining 700
b. Neither I nor II
b. The health car facility will rebill the third-party
c. I only
payor for the remaining 700
d. II only
c. The 700 was retained by the third-party payor
and will be conveyed to the health care facility
San Pedro Hospital, non profit hospital affiliated
at the start of the next fiscal period
with a religious group, reported the followings
d. The health care facility recorded the 70 as a
information for the year ended December 31, 2020:
contractual adjustment that will not be
Gross patient service revenue 1,530,000
collected.
Bad debts expense 50,000
Contractual adjustments 102,630
On December 30, 2004, Leigh Museum, a not-for-profit
On hospital’s statement of activities for the year
organization, received a 7,000,000 donation of Day Co.
ended December 31, 2020, what amount should be
shares with donor-stipulated requirements as follows:
reported as net patient service revenue?
Share valued at 5,000,000 are to be sold with the
a. 1,480,000
proceeds used to erect a public viewing building.
b. 1,377,370
 c. 1,427,370 otherwise provide, such as wheeling patients in the park
d. 1,737,730 and reading to them. At a minimum wage rate, these
services would amount to 21,320, but there actual
A private not-for-profit university charges its students
market value is estimated to be 27,400. In the nursing
tuition for 1,000,000. However, financial aid grants total
home’s statement of revenues and expenses, what
220,000. In addition, the school receives a 100,000
amount should be reported as public support? 0
grant that is restricted for faculty salaries. Of this
amount, 30,000 is spent appropriately this year. On the
A private not-for-profit hospital received a contribution
statement of activities, the school reports three
of 40,000 on June 15, 2020. The donor restricted the
categories: (1) revenues and support, (2) net assets
contribution to funding research activities currently
reclassified, and (#) expenses. Which of the following is
being performed by the hospital. For the year ended
not true?
December 31, 2020, the hospital spent 30,000 of the
a. In the unrestricted net assets, an increase of contribution to research activities. The hospital
30,000 should be shown for net assets expended the remaining 10,000 on research in January
reclassified 2021. On the statement of changes in net assets
b. In the unrestricted net assets, the revenues prepared for the year ended December 31, 2020. The ea
and support should total 1,000,000. vents described would
c. In the unrestricted net assets, expenses of a. Increase temporarily restricted net assets by
30,000 should be recognized. 10,000
d. In the unrestricted net assets, the 220,000 is b. Decrease temporarily restricted net assets by
shown as direct reduction to the tuition 10,000
revenue balance. c. Increase unrestricted net assets by 10,000
d. Decrease unrestricted net assets by 10,000
In health care accounting, restricted net assets are
a. Not available unless the directors remove the
restrictions.
b. Restricted as to use by the donor, grantor, or
other source of the resources.
c. Restricted as to use only for board-designated
purposes.
d. Not available for current operating, however,
the income granted is available for current
operating use.

Theresa Johnson does volunteer work for a local not-

for-profit organization as a community service. She
replaces without charge an administrator who would
have otherwise been paid 31,000. Which of the
following statements is true?
a. A restricted gain 31,000 should be recognized.
b. Public support of 31,000 should be recognized as an
increase in unrestricted net assets.
c. An expense reduction of 31,000 should be
recognized.
d. No entry should be made.

An organization of high school seniors performs services

for patients at a nearby home. These students volunteer
to perform services that nursing home would not