Question

True or false question:

1.Nonprofit organizations are required to record donated materials at fair value

2.Nonprofit organizations are required to separate their net assets on their statements of financial position into the following three categories: Endowment, Unrestricted; and Temporarily restricted

3.The accounting rules for private nonprofit organizations are set by the Government Accounting Standards Board

4.One of the FASB’s goals for accounting rules for nonprofit organizations is that the rules should normally be comparable to those for for-profit organizations, unless there are important differences in the nature of the transactions, or the information needs of financial statement users.

5.Nonprofit museums never show the value of their art collections on their balance sheets.

6.Under the FASB’s revenue recognition rules, part of the process of recording revenues is determining the transaction price. True or false: In determining a transaction price, a nonprofit hospital would reduce because of contractual adjustments and because of an expected level of bad debts.

Answer 1

1). True - Nonprofits are required to record donated materials/services at fair market value.

2). False - Under the new revised rules, Net assets are categorised as net assets with donor restrictions and net assets without donor restrictions.

3). False - FASB establishes accounting rules for nonprofit organizations and public and private companies in the United States.

4). True - One of the goals for nonprofit accounting rules is that as much as possible, rules are comparable to those for for-profit organizations.

5). True - Nonprofit museums do not show the value of their art collections on their balance sheets.