Quiz on Voluntary Health and Welfare Organizations

Name: ____________________________________________ TRUE OR FALSE:

Date: ___________________________

___________ 1. Special objective support is one of the accounts used to record receipt of assets in the public support category. ___________ 2. Voluntary Health and Welfare Organizations (VHWO) depend majority of its resources on Public Support. ___________ 3. A primary source of revenue of VHWO should be contributions from donors who themselves benefit from the organizations programs. ___________ 4. A significant aspect of accounting for VHWO is that financial reports must show expenses on a program basis. ___________ 5. Contributions are recognized as public support in the period received and as assets, decrease in liabilities, or expenses depending on the form of the benefits received. ___________ 6. Cash collections that do not involve a previous promise to give are credited to the account contributions. ___________ 7. A provision and an allowance for estimated uncollectible pledges are to be established based on historical collection experience on pledges receivable. ___________ 8. A conditional gift or promise to give is treated as contribution before the condition is met. ___________ 9. Securities and other property received should be recorded at fair value at the time of receipts. ___________ 10. Donated materials to be processed for sale should be recorded as inventory. ___________ 11. Permanent restrictions do not expire. ___________ 12. The objective of VHWO is to render services or to conduct programs. ___________ 13. Donated services to VHWO should be recorded only if they are significant. ___________ 14. Special fund raising event is a form of public support. ___________ 15. Donors may make contributions through their wills.

PRO-FORMA ENTRIES: 1. Entry to record payment of fund raising expenses (2pts.)

2. Entry to reclassify net assets for which the implied time restriction has been met (2pts.)

3. Entry to record cash donation for specific purpose (2pts.)

4. Entry to record revenue and support contribution from members (4pts.)