Quiz NPO

MULTIPLE CHOICE
1. Tina hospitals patient service revenues for services provided in 2020, at established rates,
amounted to P8,000,000 on accrual basis. For internal reporting, Tina uses the discharge
method. Under this method patient service revenues are recognized only when patients are
discharged, with no recognition given to revenues accruing for services to patients not yet
discharged. Patient service revenues at established rates using the discharge method amounted
to P7,000,000 for 2020. According to GAAP, Tina should report patient service revenues for 2020
of
a. Either 8,000,000 or 7,000,000, at the option of the hospital
b. P 8,000,000
c. P 7,500,000
d. P 7,000,000

2. Land valued at P400,000 and subject to a P150,000 mortgage was donated to Makati Medical
Hospital without restriction as to use. Which of the following entries should Makati Medical
make to record this donation?
a. Land……………………………………………………400,000
Mortgage payable……………………………...150,000
Contribution Revenue- Permanent……..250,000

b. Land……………………………………………………400,000
Debt Fund Balance……………………………...150,000
Contribution Revenue………………….……..250,000

c. Land……………………………………………………400,000
Debt Fund Balance……………………………...150,000
Contribution Revenue – Permanent.…..250,000

d. Land……………………………………………………400,000
Mortgage payable ……………………………...150,000
Contribution Revenue - Unrestricted…...250,000

3. Williams Hospital, a non profit hospital affiliated with religious group, reported the following
information for the year ended December 31, 2020:

Gross patient service revenues at the hospitals

full established rates……………………………………………….. P 980,000
Bad debts expense……………………………………………………………….. 10,000
Contractual adjustments with third party payors…………………. 100,000
Allowance for discounts to hospital employees…………………... 15,000
 On the hospitals statement of operations for the year ended December 31, 2020, what amount
should be reported as net patient service revenue?

a. P865,000
b. 880,000
c. 855,000
d. 955,000

4. University of Santo Tomas unrestricted current funds comprised the following:

Assets…………………………………………………………………………… P 5,000,000
Liabilities (including deferred revenues of P100,000)…… 3,000,000

The fund balance of net assets of University of santo Tomas unrestricted net assets was
a. P 1,900,000
b. 2,000,000
c. 2,100,000
d. 5,000,000

5. For the summer session of 2020, Siliman University assessed its students P 1,700,000 (net of
refunds), covering tuition fees for educational and general purposes. However, only P1,500,000
was expected to be realized because scholarships totaling P150,000 were granted to students,
and tuition remissions of P50,000 were allowed to faculty members’ children attending Silliman.
What amount should Silliman include in the unrestricted revenues from students tuition and
fees?
a. P 1,500,000
b. 1,550,000
c. 1,650,000
d. 1,700,000

6. Liway College, a private not-for-profit college, received P25,000 from Ms. Mary Basilio on April
30,2020. Ms. Basilio stipulated that her contribution be used to support faculty research during
the fiscal year beginning on July 1,2020. On July 15, 2020, administrators of Liway awarded
research grants totaling P25,000 to several faculty in accordance with the wishes of Ms. Basilio.
For the year ended June 30,2020. Liway College should report the P25,000 contribution as

a. Temporarily restricted revenues on the statement of activities.

b. Unrestricted revenue on the statement of activities
c. Temporarily restricted deferred revenue on the statement of activites.
d. An increase in fund balance on the statement of financial position.

7. An alumnus donates securities to San Sebastian college and stipulates that the principal be held
in perpetuity and revenues be used for faculty travel. Dividends received from the securities
should be recognized as revenues in
a. Endowment funds
b. Quasi-endowment funds
 c. Restricted current funds
d. Unrestricted current funds

8. In the loan fund of a college, each of the following types of loans would be found except
a. Faculty
b. Computer
c. Staff
d. Student

9. Charity fund is a voluntary welfare organization funded by contributions from the general public.
During 2020, unrestricted pledges of P100,000 were received, half of which were payable in
2020, with the other half payable in 2021 for use in 2021. It was estimated that 20% of these
pledges would be uncollectible. With respect to the pledges, the amount that should be
reported for 2020 as net contributions, under public support, is
a. P100,000
b. 80,000
c. 50,000
d. 40,000

10. A statement of functional expenses is required for which one of the following private non-profit
organizations?
a. Colleges
b. Hospitals
c. Voluntary health and welfare organizations
d. Performing arts organizations

PROBLEMS

PROBLEM I

The following events occurred to the Cancer Research Foundation during the fiscal year ended June 30,
2020:

1. Unrestricted pledges for P300,000 were received. It is estimated that 10% will not be collectible.
2. P260,000 was collected on pledges. It is estimated that another P10,000 will be collected next
year.
3. The Foundation received P40,000 from Manila Bulletin. The amount was net of P5,000 for fund-
raising expenses.
4. The foundation invested P35,000 in certificates of deposit. During the year it collected P2,000 in
interest; at year-end accrued interest amounted to P1,000.
5. The Foundation collected P5,000 in cash from sales of its booklet “How to Cope with Cancer.”
6. Expenses paid in cash during the year were as follows:
Salaries P 90,000
Employee Fringe Benefits 15,000
Payroll Taxes 16,000
Supplies 7,000
Telephone 1,500
 Utilities 6,000
Rent 10,000
Conferences, Conventions, and Meetings 5,000
Cost of Booklet “How to Cope with Cancer” 1,000
Miscellaneous 3,000
7. Accrued expense at year-end amount to P1,000 for utilities and P5,000 for salaries.
8. The Board of Directors Specified that P10,000 be used to purchase a new computer for research
purposes.

Required:

Prepare Journal entries to record the above events in the Unrestricted Current Fund.

PROBLEM II

Among the transactions and events of the General Fund of Santa Maria Hospital, a nonprofit
organization, for the month of October, 2020 were the following:

1. Gross patient service revenues of P80,000 were billed to patients, Indigent patient charity care
amounted to P4,000, of which amount P2,500 was receivable from Social Medicare of P6,000.
And doubtful accounts of P8,000
2. Contributed services approximating P10,000 at going salary rates were received from volunteer
nurses. Meals costing P200 were served to the volunteer nurses at no charge by the Santa Maria
Hospital cafeteria.
3. New unrestricted pledges, due in three months, totaling P5,000 were received from various
donors. Collections on pledges amounted to P3,500, and the provision for doubtful pledges for
October 2020 was P800.
4. The amount of P3,000, received from the restricted fund, was expanded for new surgical
equipment, as authorized by the donor.

Required:

Prepare Journal Entries for October, 2020 transactions and events of Santa Maria Hospital
General Fund.