The Transactions Described in the Following Questions Occurred in a Voluntary

question 8

Multiple Choice

The transactions described in the following questions occurred in a voluntary health and welfare organization during the year ended December 31,20X8.For each transaction,indicate its effect(s) on the organization's statement of activities prepared for the year ended December 31,20X8.List all effects of transactions affecting more than one class of net assets.Indicate your choice(s) by entering the letter corresponding to the effects listed here:
Effects of Transactions on Statement of Activities
-Received cash contributions restricted by donors for research.

• A)Increases net assets with donor restrictions.
• B)Decreases net assets with donor restrictions.
• C)Increases net assets without donor restrictions.
• D)Decreases net assets without donor restrictions.
• E)Transaction is not reported on the statement of activities.

Recognize the correct treatment of prepaid expenses and unearned revenues in accounting entries.

Understand the impact of cash and accrual transactions on the financial statements.

Know the differentiation between the cash basis and accrual basis of accounting, including the implications for financial reporting.

Apply the expense recognition (matching) principle to determine when expenses should be recognized in the income statement.

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Definitions:

Inductive

An intellectual procedure that involves synthesizing a number of premises, deemed true or usually validated, to achieve a distinct conclusion.

Prosocial Behavior

Actions intended to benefit others, including helping, sharing, donating, cooperating, and volunteering.

Subcontrary Propositions

In traditional logic, propositions that cannot both be false but can both be true.

Existential Import

The assumption within a statement that asserts the existence of the subject matter it mentions.