AMERICAN INSTITUTE OF CERTIFIED PUBLIC
ACCOUNTANTS{AICPA} FINAL EXAM 2025 80
QUESTIONS AND CORRECT ANSWERS// ALL YOU NEED
TO PASS AICPA EXAM// GRADED A+
When should a conditional pledge to a nongovernmental not-for-profit organization be recognized as
revenue?
A. Immediately.
B. When the cash is received.
C. When the pledge conditions are met.
D. At the beginning of the next fiscal period. - ANSWER-C. When the pledge conditions are met.
What is the appropriate characterization of the net assets of a nongovernmental not-for-profit
organization?
A. Residual interest.
B. Ownership interest.
C. Donor's interest.
D. Equity interest. - ANSWER-A. Residual interest.
A nongovernmental, not-for-profit organization had the following investments:
Investment
Bonds
Stock A (100 shares) Stock B (200 shares)
Cost
$9,900
$50 per share $40 per share
Fair Value (Beginning of Year)
$10,000 $45 $41
Fair Value (End of Year)
$9,950 $51 $49
,What amount should be the total value of investments reported in the year-end statement of
financial position?
A. $24,850
B. $24,800
C. $23,800
D. $22,900 - ANSWER-A. $24,850
The purpose of a statement of financial position for a nongovernmental not-for-profit entity is to
provide relevant information about
A. The cash receipts and cash payments during a period in time.
B. The effects of transactions and other events and circumstances that change the amount and
nature of net assets.
C. The assets, liabilities, and net assets, and about their relationships to one another at a moment in
time.
D. The changes in permanently restricted net assets, temporarily restricted net assets, and
unrestricted net assets for a period of time. - ANSWER-C. The assets, liabilities, and net assets, and
about their relationships to one another at a moment in time.
The net asset reclassifications of a nongovernmental not-for-profit organization would be reported
on which of the following?
A. Statement of financial position.
B. Statement of activities.
C. Statement of cash flows.
D. Statement of functional expenses. - ANSWER-B. Statement of activities.
The Cats and Dogs League was organized as a nongovernmental not-for-profit organization. The
League received a pledge of $10,000 to be used to build an addition to the kennel. This donation will
not be received for three years. How should this pledge be recorded?
A. As temporarily restricted support of the present value of $10,000.
B. As temporarily restricted support of $10,000.
C. As a conditional promise to give of $10,000.
D. It should not be accounted for until it is received - ANSWER-A. As temporarily restricted support
of the present value of $10,000.
, A donor provided a $10 million gift for a specific program to a nongovernmental, not-for-profit
organization. The organization cannot spend the $10 million, but it may use the income on the gift
for the donor-specified program. In the organization's statement of activities, the gift should be
reported as part of the change in
A. Temporarily restricted net assets.
B. Permanently restricted net assets.
C. Restricted - nonspendable.
D. Unrestricted net assets. - ANSWER-B. Permanently restricted net assets.
During the current year, a nongovernmental, not-for-profit hospital received a gift of $10 million to
be used for an addition to the physical therapy unit. In addition, the hospital also received an
investment valued at $3 million with a donor-imposed restriction allowing only the use of the
investment earnings for paying the salary of an additional physical therapist. As of the end of the
current year, a physical therapist had not been hired, and earnings on the investment for the year
were $150,000. What amount should be reported as temporarily restricted net assets in the year-end
statement of financial position?
A. $150,000
B. $10,000,000
C. $10,150,000
D. $13,150,000 - ANSWER-C. $10,150,000
A statement of financial position for a nongovernmental not-for-profit organization reports amounts
for which of the following classes of net assets?
A. Current.
B. Long-term.
C. Permanently restricted.
D. Temporarily unrestricted. - ANSWER-C. Permanently restricted.
A nongovernmental not-for-profit college has a portfolio of bond investments that had an original
cost of $2,000,000. The college's board of trustees voted to hold the principal of this fund intact in
perpetuity and designated the earnings to reimburse faculty for travel to academic conferences.
During the year, interest of $50,000 was earned in cash. The fair value of the bonds was $1,980,000.
What amount should the college report as permanently restricted net assets at year end?
A. $0
B. $1,980,000
