D. All of Them

Ryan Capistrano
AC181
LEARNING ACTIVITIES
I. Multiple Choice. Select the best answer.
MC 9-1. Which of the following groups can form a not-for-profit organization?
Group 1: pedicab drivers Group 2: lawyers
Group 3: market vendors Group 4: subdivision homeowners
a. Groups 1 and 3 c. Group 2 only
b. Group 2 and 4 d. all of them
MC 9-2. A not-for-profit organization receives bonds as donation. The deed of donation allows the use of
earnings therefrom in the normal operations. The bonds may be disposed of after 5 years and the
proceeds may then be transferred to the general fund. The donation is classified as:
a. pure endowment c. term endowment
b. quasi-endowment d. special endowment
MC 9-3 Which of the following is an example of a support service?
a. welfare program for families c. conducting a fund-raising campaign
b. art class at a museum d. research program at a university
MC 9-4 Royal Cross, a community foundation, incurred P5,000 in management and general expenses
during 2019. In the foundation’s statement of operation and changes in net assets for the year
ended December 31, 2019, the P5,000 should be reported as
a. part of program services

b. part of supporting services
c. a contra account offsetting revenue and support
d. a direct reduction of fund balance
MC 9-5. A voluntary health and welfare organization received unrestricted cash donations of P20,000
from
donors who attended a dinner held for the benefit of the organization. The costs of the dinner,
including room rental, and other expenses, amounted to P7,000. On the statement of activities
prepared for the voluntary health and welfare organization, the expenses of the dinner should be:
a. reported as management and general expenses.
b. netted against the P20,000 of contribution revenue.
c. reported as fund raising costs.
d. reported as programmatic expenses.
PS 9-2. Listed below are transactions relating to Infectious Diseases Research Foundation during the
fiscal year ended April 30, 2020:
a. Unrestricted pledges for P3,000,000 were received. It is estimated that 10% will not be
collectible.
b. P2,600,000 was collected on pledges. It is estimated that another P100,000 will be collected
next year.
c. The Foundation received P400,000 from Manila Bulletin as part of its fund-raising. The
amount was net of P50,000 for fund-raising activities.
d. The Foundation invested P350,000 in certificates of deposit. During the year it collected
P20,000 in interest; at year-end, accrued interest amounted to P10,000.
e. The Foundation collected P50,000 in cash from sales of its booklet “How to Avoid Infectious
Diseases”.
f. Expenses paid in cash during the year were as follows:
Salaries P900,000
Employee Fringe Benefits 150,000
Payroll Taxes 160,000
Supplies 70,000
Telephone 15,000
Utilities 60,000
Rent 100,000
Conferences, Conventions and Meetings 50,000
Cost of Booklet, “How to Avoid Infectious Diseases” 10,000
Miscellaneous 30,000
g. Accrued expenses at year-end amounted to P10,000 for utilities and P50,000 for salaries.
h. The Board of Directors specified that P100,000 should be used to purchase a new computer
for research purposes.
Required:
Prepare journal entries to record the above transactions in the unrestricted current fund. Use the
following ledger account titles, where applicable.
Cash
Fund Raising Expenses
Pledges Receivable
Cost of Sales to Public
Allowance for Uncollectible Pledges
Salaries
Interest Receivable
Employee Fringe Benefits
Investment
Payroll Taxes
Accounts Payable
Supplies
Accrued Expenses
Payable Telephone
Fund Balance-Unrestricted
Utilities
Fund Balance – Restricted for Purchase of Equipment
Rent
Contribution Revenue
Conference, Conventions and Meetings
Fund Raising Revenue
Miscellaneous
Sales – Public Revenue
Interest Income
a. Unrestricted pledges for P3,000,000 were received.

It is estimated that 10% will not be
collectible.
Pledges Receivables 3,000,000
Contribution Revenue 2,700,000
Allowance for 300,000
Uncollectible Pledges
b. P2,600,000 was collected on pledges. It is

estimated that another P100,000 will be collected
next year.
Cash 2,600,000
Pledges Receivable 2,600,000
c. The Foundation received P400,000 from Manila

Bulletin as part of its fund-raising. The
amount was net of P50,000 for fund-raising activities.
Cash 400,000
Fund Raising Expenses 50,000
Fund Raising Revenue 450,000
d. The Foundation invested P350,000 in certificates of

deposit. During the year it collected
P20,000 in interest; at year-end, accrued interest
amounted to P10,000.
Investment 350,000
Cash 350,000
Cash 20,000
Interest Receivable 10,000
Interest Income 30,000
e. The Foundation collected P50,000 in cash from

sales of its booklet “How to Avoid Infectious
Diseases”.
Cash 50,000
Sales – Public Revenue 50,000
f. Expenses paid in cash during the year were as

follows:
Salaries P900,000
Employee Fringe Benefits 150,000
Supplies 70,000
Telephone 15,000
Utilities 60,000
Rent 100,000
Conferences, Conventions and Meetings 50,000
Cost of Booklet, “How to Avoid Infectious Diseases”
10,000
Miscellaneous 30,000
Salaries Expense 900,000
Employee Fringe Benefit 150,000
Supplies Expense 70,000
Telephone Expense 15,000
Utilities Expense 60,000
Rent Expense 100,000
Conference, Conventions 50,000
and Meetings
Cost of Sales to Public 10,000
Miscellaneous Expense 30,000
Cash 1,545,000
g. Accrued expenses at year-end amounted to

P10,000 for utilities and P50,000 for salaries.
Utilities Expenses 10,000
Salaries Expenses 50,000
Accrued Expenses 60,000
h. The Board of Directors specified that P100,000
should be used to purchase a new computer
for research purposes.
Fund Balance – 100,000
Unrestricted
Fund Balance – 100,000
Restricted for Purchase
of Equipment

D. All of Them

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Ryan Capistrano

I. Multiple Choice. Select the best answer.

MC 9-1. Which of the following groups can form a not-for-profit organization?

Group 1: pedicab drivers Group 2: lawyers

Group 3: market vendors Group 4: subdivision homeowners

a. Groups 1 and 3 c. Group 2 only

b. Group 2 and 4 d. all of them

a. pure endowment c. term endowment

b. quasi-endowment d. special endowment

MC 9-3 Which of the following is an example of a support service?

a. welfare program for families c. conducting a fund-raising campaign

b. art class at a museum d. research program at a university

ended December 31, 2019, the P5,000 should be reported as

a. part of program services

c. a contra account offsetting revenue and support

d. a direct reduction of fund balance

a. reported as management and general expenses.

b. netted against the P20,000 of contribution revenue.

c. reported as fund raising costs.

d. reported as programmatic expenses.

fiscal year ended April 30, 2020:

amount was net of P50,000 for fund-raising activities.

P20,000 in interest; at year-end, accrued interest amounted to P10,000.

f. Expenses paid in cash during the year were as follows:

Payroll Taxes 160,000

Conferences, Conventions and Meetings 50,000

Cost of Booklet, “How to Avoid Infectious Diseases” 10,000

for research purposes.

following ledger account titles, where applicable.

Fund Raising Expenses

Cost of Sales to Public

Allowance for Uncollectible Pledges

Employee Fringe Benefits

Fund Balance – Restricted for Purchase of Equipment

Conference, Conventions and Meetings

Fund Raising Revenue

Sales – Public Revenue

a. Unrestricted pledges for P3,000,000 were received.

b. P2,600,000 was collected on pledges. It is

c. The Foundation received P400,000 from Manila

d. The Foundation invested P350,000 in certificates of

e. The Foundation collected P50,000 in cash from

f. Expenses paid in cash during the year were as

g. Accrued expenses at year-end amounted to

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