Guidelines for Accounting Charitable Donations and Fundraising
School
Defence Authority College of Business**We aren't endorsed by this school
Course
ACCOUNTING 123
Subject
Accounting
Date
Dec 10, 2024
Pages
3
Uploaded by SargentRose25212
Accounting for Charitable Donations and Fundraising Income1.When a donor provides a pledge of $5,000 to a non-profit but does not specify any restrictions, how should the donation be recognized in the financial statements?oA) As unrestricted revenueoB) As temporarily restricted revenueoC) As a liability until receivedoD) As a noncurrent asset2.What is the correct treatment for a donor’s pledge that is received in writing but not yet fulfilled?oA) Recognized immediately as revenueoB) Recorded as a receivableoC) Recorded as a liability until paidoD) Excluded from financial statements until paid3.In fund-raising accounting, when should a grant with conditions be recognized as revenue?oA) When the conditions are fulfilledoB) When the grant is awardedoC) When the money is receivedoD) When the grant is pledged4.How should a contribution be classified if it is given with an explicit instruction to support a capital project over the next five years?oA) Temporarily restricted revenueoB) Permanently restricted revenueoC) Unrestricted revenueoD) Conditional revenue5.A donation is received for a specific program, but the donor has not provided a timeline for when the funds must be spent. How should this donation be classified?oA) Temporarily restrictedoB) UnrestrictedoC) ConditionaloD) Permanently restricted6.Which of the following is a required disclosure for restricted donations in fund-raising accounting?oA) The donor’s nameoB) The nature of the restrictionoC) The amount of unrestricted revenueoD) The total number of donations received7.What is the accounting treatment for donated goods that are sold at a fundraising event?
oA) Recorded as revenue at the sale priceoB) Recorded at the donor’s cost basisoC) Recognized at the fair market value at the time of receiptoD) Not recorded until sold8.If a donor commits to a multi-year pledge, what should the non-profit organization do in year one?oA) Record the full pledge amount as revenueoB) Record the revenue for the first year onlyoC) Record the entire pledge as a receivableoD) Defer recognition of the pledge until the entire amount is received9.A donor provides a donation of land to a nonprofit. What is the correct accounting treatment for this donation?oA) Record the land at its fair market valueoB) Record the land at the donor’s book valueoC) Record the land at zero valueoD) Record the land as a liability until sold10.Which of the following is a key difference between restricted and unrestricted donations?oA) Restricted donations are for specific purposes or programs, while unrestricted donations can be used for any purposeoB) Restricted donations are reported on the balance sheet, while unrestricted donations are notoC) Unrestricted donations must be reported on the statement of activities, while restricted donations do notoD) Restricted donations can only be used for capital expenditures11.What is the best method for recognizing income from fundraising events?oA) Recognize revenue only when all expenses are paidoB) Recognize revenue based on the net income from the eventoC) Recognize revenue when tickets are soldoD) Recognize revenue as soon as funds are received12.How should direct costs for a fundraising event be accounted for in the financial statements?oA) As a reduction of the event’s revenueoB) As an expense under fundraising costsoC) As program expensesoD) As a noncurrent liability13.If a donor restricts their donation to be used for research activities, the organization should:oA) Record the donation as permanently restricted revenueoB) Record the donation as temporarily restricted revenue
oC) Treat the donation as unrestricted revenueoD) Refund the donation if not used for research14.When should in-kind donations be recorded in the financial statements?oA) Only when they are soldoB) When they are donated and at their fair market valueoC) When the organization uses the goodsoD) Only when the organization has a receipt from the donor15.A non-profit organization receives a significant bequest that is unrestricted. How should it be recognized?oA) As permanently restricted revenueoB) As temporarily restricted revenueoC) As unrestricted revenueoD) As a conditional contribution