Question

1. Nonprofit Y sends a mailing to 10,000 people. The mailing contains information about cancer, and also asks the people to make donations. Under GAAP, what are the rules about how the costs of this mailing should be classified?
   1. The organization must always consider all the costs to be fundraising, since there was a fundraising message
   2. The organization may allocate some of the costs to program expense if all three of the following tests are met: the purpose test; the content test; and the audience/recipient test.
   3. The organization may allocate some of the costs to program expense if any one of the following tests are met: the purpose test; the content test; and the audience/recipient test.
   4. As long as the mailing has some program purpose, the organization is free to allocate costs between programs and fundraising – there are no special tests to be considered

Answer 1

0 Answer:- Summatized the information provided prethe question; nonprofit y sends a mailing to Rules of Non-profit organisation for accounting Theatment: -> main object is to determine suróplus of deficit -> Financial statements are prepated every year comprising of • Receipts Con Payments account • Income & Expenditerde account: • And Balance sheet → Income an Expenditures are accountid only at the time of accural. → NO poofit loss. it has to show suroplus or deficit ~ Suoplus of deficit as the case may be is either added to or deducted from capital fund in the balance sheet. ✓ Records those expenses and incomes which relate to the current accounting à It records only cash items and non- cach items like depreciations are ignoted. @ all costs to be fundraising in Fundoaising expenses. period.

Q 6 test cost incurred for programs to fundraising ade program Expenses. © test cost incurred for programs to fundraising arbe program Expenses. @ mailing has some program peopose -cost to be allocated between poogcom expenses and fundraising expenses. - In non profit B case nuose supervisoos 'salcoy classified as Administrative & General Expenses. *
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