F6 - NFP Accounting & Govt Accounting

Question 1

Support Services EXp

Answer 1

Management & General Exp
Fundraising Exp
Membership Dev Exp

Question 2

Program Services Exp

Answer 2

Salaries & Wages of Staff who are directly involved with program
Supplies & Mats
Costs of Services
Printing & Advertising
Space Rental
Travel & Transportation
Grants or Awards
Depreciation & Utilities

Question 3

Perpetual Endowment

Answer 3

Donor Restricted Endowment

Question 4

NFP Stmt of Financial Position

Answer 4

Assets
Liabilities
Net Assets (Equity)

Question 5

Stmt of Activities in NFP
Operating Exp

Answer 5

Decreases in Net Assets w/o donor restrictions
Operating Exp are listed separately under “Exp and Losses” in the Stmt of Activities

Donor restricted resources eligible for expenditure are reclassified to without donor restrictions and their use is reported as an expense to derive the change in net assets without donor restrictions.

Question 6

Rule: Donor-imposed restrictions that are met in the same period they are received may be recorded as support (contribution revenue) without donor restrictions, provided that the organization discloses and consistently applies this accounting policy.

Question 7

Quasi Endowment

Answer 7

A fund that the Board of Directors set aside
Not Donor Restricted
Net Assets W/O Donor Restrictions

Question 8

Endowment in Perpetuity

Answer 8

Original Principal is required to be maintained forever
Donor Restricted
Income (Interest generated) can be used by the ORG

Question 9

Depreciation is included as an element of expense in a

Answer 9

“statement of activity” in all NFP Orgs

Question 10

As with commercial accounting, a cash flow statement prepared using the indirect method will not present cash payments for

Answer 10

interest as a separate line item in the cash flow from operations section of the cash flow statement.

Interest paid will be specifically included as a supplemental disclosure.

Question 11

In order for not-for-profit organizations to be financially interrelated as defined by FASB ASC 958-605,

Answer 11

Their relationship must share both characteristics:
One organization must be able to influence the operating and financial decisions of the other
AND
Have an ongoing economic interest in the net assets of the other.

Question 12

For NFP HOSPITAL
In regards to Revenues

Answer 12

Credit Loss Provision is considered as an expense

Question 13

Unconditional pledges that will be collected over more than one year should be

Answer 13

Reported as pledges receivable, valued at their present value.