F8

Question 1

What is the basic EPS Formula

Answer 1

Income avialable to common shareholders / Weighted Average number of common shares outstanding

Question 2

What instruments could be potentially dilutive and thus affect dilutive EPS

Answer 2

Stock options and warrants
Bonds or preferred stock (convertible stocks)
Contracts that may be settled in cash and stock
Contingent issuable shares

Question 3

What kind of capital structure is associated with basic EPS, what about for diluted EPS?

Answer 3

Basic EPS: Simple capital structure

Diluted EPS: Complex capital structure

Question 4

What is the equation for the diluted EPS

Answer 4

Income avail. to common shareholders assuming the conversion of all dillutive securities DIVIDED BY Weighted Average Common Shares Outstanding after the conversion of all dillutive shares

Question 5

Where is the basic EPS and diluted EPS listed on the financial statements

Answer 5

The face of the income statement

Question 6

What are the three sections of the statements of cash flows and what components are included within each

Answer 6

Operating activities: Cash flows from income statement transactions and current assets/liabilities
Investing Activities: Cash Flows from non-current assets
Financing Activities: Cash flows from debt and equity

Question 7

If you are using the direct method of cash flows, what additional item is included as a supplement

Answer 7

Reconciliation of net income to net cash provided by operations as a supplemental schedule (Not required under IFRS)

Question 8

What are the most common classes of cash receipts and disbursements included in cash flows from operating activities using the DIRECT Method

Answer 8

Cash received from customers
cash paid to suppliers/emplyees
interest received and paid
dividends received
Purchases/sales of trading securities
income taxes paid

Question 9

Name the common adjustments made to cash flows from operating activities using the indirect method
CLAD

Answer 9

Current Assets and Liabilities
Losses and gains
Amortization and depreciation
Deferred Items

Question 10

Identify the basis of accounting for not-fo-profit organizations

Answer 10

full accrual basis

Question 11

Name the primary authoritative source for GAAP for not-for-profit orgs

Answer 11

FASB baby

Question 12

What financial statements are prepared for NONGOVERNMENTAL Not For Profit orgs

Answer 12

Statement of financial position
statement of activities
statement of cash flows

Question 13

Name the classifications of net assets

Answer 13

Net assets with or without donor restrictions

Question 14

Can you define what a donor imposed restriction is

Answer 14

The represent donor stipulations that specify a use for a contribution, this specific use is more specific then the usual mission of the not-for profit

Question 15

What are the two different types of donor imposed restrictions

Answer 15

temporary or perpetual

Question 16

What are the three sections of the statement of activities for not-for-profit orgs

Answer 16

Change in total assets
Change in net assets without donor restrictions
change in net assets with donor restrictions

Question 17

Name the classifications of the statement of cash flows for not-for profit orgs

Answer 17

operating, investing, and financing

Question 18

Name the funcitonal classification of expenses commonly used in not for profit orgs

Answer 18

Program expenses
Support expenses: the following fall under support expenses- Fundraising, management and general, and membership development expenses

Question 19

What is the recognition criteria for cash contributions

Answer 19

recognized as revenues or gains in the period which they are received, measured at FV at the date of gift

Question 20

What is the recognition criteria for unconditional promises (pledges)

Answer 20

Pledge receivable and related contribution revenue are recognized at FV when received

Question 21

What is the recognition criteria for conditional promises (pledges)

Answer 21

No recognition of receivable or revenue occurs until the condition (future event) is met

Question 22

What is the recognition criteria for multi year pledges

Answer 22

pledge receivable and associated contribution revenue are recognized at net present value at the date of pledge, with future collections considered restricted

Question 23

When are donated services displayed as a contribution and expense on the FS of a not for profit org at Fair Value of those service being performed

SOME

Answer 23

Recognized donated services must meet the following:

Specialized skill was required to deliver the service
Otherwise needed service (would have been purchased anyway)
Measured Easily

Question 24

What criteria must be met in order to NOT RECORD the donation of works of art or historical treasures for both not for profit and governmental

Answer 24

if they are protected by the organization, held by the organization for display, and, if sold, the proceeds of the sale are designated for the aquisiton of other work

Question 25

How are pledges accounted for

Answer 25

unconditional pledges to contribute in the future are reported as restricted support, at present value of future cash flow using a discount rate

Question 26

For a university, identify common revenues without donor restrictions

Answer 26

``` student tuition and fees government aid gifts and private grants endowment income sales and servies of educational depts. revenue of auxilitary enterprises ```

Question 27

If student tuition and fees are displayed at gross amount, what happens to scholarships and tuition waivers?

Answer 27

The waivers may be displayed as expenditures or as a contra revenue line item

Question 28

What are the three revnue accounts for health care entities

Answer 28

patient services revenue operating revenue such as tution from schools, donated supplies, and specific purpose grants nonoperating revnue like gains and losses, investment activities and unrestricted grants

Question 29

Describe the treatment of charity care in a health care organization, what is charity care

Answer 29

Charity care is not recognized as either revenue or expense on the FS of a health care org Charity care represents serives for which the health care orgs. do not anticipate any cash flows

Question 30

Describe the treatment of patient service revenue in a health care organization.

Answer 30

Patient services revenue is recorded on the gross basis using established rates.

Question 31

What does the term variance power mean in the context of not-for-profit accounting and reporting

Answer 31

the unilateral authoirty to redirect assets to another beneficiary

Question 32

In considering transferring assets from a recipient organization to a beneficiary organization, when are the assets received recognized as revenue by the recipient organization

Answer 32

when assets are transferred with variance power, which gives the recipient organization the unilateral authoirty to redirect assets to another beneficiary, the transfer s recognized as revenue

Question 33

How are marketable securities reported

Answer 33

Fair value

Question 34

Where are gains and losses on investments reported for a not for profit org

Answer 34

reported in the statement of activites as increased or decreases in net assets without donor restrictions, unless the use of the investment is restricted by explicit donor stipulations or by law

Question 35

is depreciation expense recorded in the FS of a not for profit

Answer 35

depreciation expense and accumulated depreciation are recorded in not-for-profit orgs in a manner consistent with recognition used in commercial enterprises

Question 36

What is an endowment funds

Answer 36

its an established fund of assets to provide income for the maintenence of a not for profit entity, they are GENERALLY restricted to provide a source of income in perpetuity, or for a specified period

Question 37

Can you tell me what an underwater endowment fund is

Answer 37

its a donor restricted endowment fund for which the FV of the fund at the reporting date is less than either the original gift amount or the amount required to be mainteained either by law or donor restriction

Question 38

How are STOCK DIVIDENDS that happened in the middle of the year treated for the purpose of calculating EPS

Answer 38

Treated as if they existed all year, like as in Jan 1

Question 39

What makes dilutive EPS 'dilutive' as it relates to the basic EPS

Answer 39

it's dilutive if the security will produce an EPS less than the basic EPS

Question 40

IF you have a stock split in year two, would you need to go back to year one and restate the EPS based on this new split

Answer 40

YUHHHHH

Question 41

When finding diluted EPS, what could be added back to the numerator NET OF TAX?

Answer 41

You add interest expense for bond net of tax (meaning you subtract the tax implications)

Question 42

What is the order of the Operating section of the statement of cash flows

Answer 42

``` Net Income +Depreciation & Amortization +Losses -Gains -Amortization of Bond Premium -Equity Earnings - (+/-) operating assets + (+/-+ operating liabilities ```

Question 43

Under GAAP What is interest and/or dividends received classified under in the statement of cashflows? What about under IFRS

Answer 43

``` GAAP = CF Operating IFRS = CF Operating or Investing ```

Question 44

Under GAAP What is interest and/or dividends paid classified under in the statement of cashflows? What about under IFRS

Answer 44

``` GAAP = CF Operating IFRS = CF Operating or Financing ```

Question 45

For the statement of cash flows, what is the rule for the increase/decrease of CA and CL and if they are +/-

Answer 45

Increase CA --> Subtract Decrease CA --> Add Increase CL --> Add Decrease CL --> Subtract

Question 46

When you choose the indirect method, what do you have to disclose as a supplemental disclosure

Answer 46

interest and taxes

Question 47

What are not included in financial statements for a not for profit

Answer 47

funds are excluded

Question 48

What are some examples of natural classifications of expenses for a not for profit

Answer 48

stuff like salary, rent, utilities, that shit

Question 49

What are the three components of the Statement of Financial Position as it relates to a not for profit

Answer 49

Assets, Liabilities, and Net Assets (equity)

Question 50

Are internal board-designated funds for a not for profit considered restricted or unrestricted funds

Answer 50

unrestricted since the decision came from internal

Question 51

How do you record the two entries for satisfying of a donor restriction and the use of resources for a not-for-profit

Answer 51

Satisfication: DR: Satisfaction of program restriction - donor restriction CR: Satisfaction of program restriction - W/O donor restriction REsources : DR: Program Expense CR: Program Revenue

Question 52

On the statement of cash flows, where do donor contributions without restrictions go, and where do donations with restrictions go

Answer 52

without restrictions: Operating | With restrictions: Financing

Question 53

So you were given money for a not for profit to spend it on something specific (with restrictions), you do spend it, and on the right stuff (good job) it was sitting in Net Assets with restrictions, now where does it get reclassified to

Answer 53

as an increase to net assets without restrictions

Question 54

What does charity care do to revenue

Answer 54

DECREASES IT YOU GOTTA SUBTRACT CHARITY CARE

Question 55

When should a CONDITIONAL pledge made to a nongovernmental not for profit be recognized as revenue

Answer 55

NEVER, you gotta wait until it becomes unconditional/when the condition is met