Expenses. Select the best answer for each of the following multiple-choice items.

1. In the statement of activities of a not-for-profit, depreciation expense should

a. be included as an element of expense.

b. be included as an element of other changes in fund balances.

c. be included as an element of support.

d. not be included.

2. Environs, a community foundation, incurred $10,000 in management and general expnses

during 20X1. In Environs’ statement of activities for the year ended December 31, 20X1, the

$10,000 should be reported as

a. a direct reduction of unrestricted net assets.

b. part of supporting services expense.

c. part of program services expense.

d. a contra account to offset revenue and support.

3. Super Seniors is a not-for-profit organization that provides services to senior citizens. Super employs a full-time staff of 10 people at an annual cost of $150,000. In addition, two volunteers work as part-time secretaries replacing last year’s full-time secretary who earned $10,000.

Services performed by other volunteers for special events had an estimated value of $15,000.

These volunteers were employees of local businesses, and they received small-value items for their participation. What amount should Super report for salary and wage expenses related to the above items?

a. $150,000

b. $160,000

c. $165,000

d. $175,000

4. The League, a not-for-profit organization, received the following pledges:

Unrestricted	$200,000
Restricted for capital additions	150,000

All pledges are legally enforceable; however, the League’s experience indicates that 10% of all ledges prove to be uncollectible. What amount should the League report as pledges receivable net of any required allowance account?

a. $135,000

b. $180,000

c. $315,000

d. $350,000

5. When a nonprofit organization combines fund raising efforts with bona fide educational efforts or program services, the total combined costs incurred are

a. reported as program services expenses.

b. allocated between fund-raising and program services expenses using an appropriate allocation basis.

c. reported as fund-raising costs.

d. reported as management and general expenses.