Which of the Following Statements Is False with Respect to Private

question 101

Multiple Choice

Which of the following statements is false with respect to private not-for-profit organizations?

• A) Exchange transactions should be recorded on the accrual basis of accounting where the revenues are recognized when earned.
• B) An intention to give should be recorded as revenue when the intention is communicated to the not-for-profit.
• C) In certain situations, contributed services should be recognized as revenue.
• D) FASB statement 124 requires that investments in equity securities with readily determinable values be reported at fair market value.

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Definitions:

Discount Rate

The discount rate is the interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Salvage Value

The predicted remaining value of an asset at the termination of its functional life.

Working Capital

The amount by which current assets exceed current liabilities, indicating the liquidity level available to a business for day-to-day operations.

Salvage Value

The calculated resale value an asset holds once it ceases to be useful.