Flashcards in NFP Accounting Deck (44)
What are the 4 types of NPOs?
1. Voluntary health and welfare orgs
2. Health care orgs
3. Colleges and Universities
4. Other NPOs
VHWOs are characterized as those that provide free or low cost services with financial support derived from voluntary ______ and______.
Contributions and grants, resource providers are not the primary beneficiary of the services
ONPOs essentially benefit their own members. TF
NPOS follow GASB or FASB?
In general, FASB
Can governments can also run healthcare and college/university NPOs? If so, which org sets the rules?
FASB sets the standards for which types of entities?
For profit and Not for profit
GASB sets the standards for which types of entities?
State and Local government entities
NPOs use modified accrual accounting with a current financial resources measurement focus when reporting. TF
False, full accrual, economic resources focus
The purpose of NFP financial reporting is to all external users to assess: stewardship and ______, as well as services and _____.
What are the 3 types of NPO net asset categories?
2. Temporarily Restricted
3. Permanently Restricted
The four required statements are:
1. Statement of Financial Position
2. Statement of Activities
3. Statement of Cash flows
4. Statement of Functional expenses (VHWOs only)
Expenses are only reported in the unrestricted net assets category? TF
What are the two categories of expenses?
Program services, and supporting services
Gains and losses are related to the main activities of the NFP. TF
Revenues are reported only for unrestricted net assets. TF
False, the are reported for all asset catergories
In good practice ____ of revenues should go to programs. .
Fund raising expenses are classified as a (program/supporting services) expense?
The statement of position includes what financial categories?
Assets, Liabilities, and net assets
Management and general expenses are a type of _____ expense.
A contribution for the construction of a new building would be considered a cash flow from investing activities. TF
False, financing activities. Any contributions for long-term purposes falls under financing.
Exchange transactions are reported under Unrestricted Net Assets in the SoA. TF
Debt proceeds are reported as cash inflows under ______ activities.
Purchase of capital assets are reported as cash ______ from _______ activities.
What is a regular endowment?
A permanently restricted net asset
Term endowments are donated by an external party to be invested and that can be ______________.
Spent after a passage of time
Quasi endowments are set aside by the NFP and are accounted for as an unrestricted net asset. TF
In regards to endowments, which two questions are to be answered?
Who donated it, and must the principal remain intact?
Gains and losses on investments purchased with permanently restricted net assets should be reported in the SoA as increases and decreases in unrestricted net assets. TF
How should NFPs report investments in debt securities?
Fair Value (Market Price)
Donated securities are reported at their donated FMV on the end of year financial statements? TF
False, mark to market at year end
If there is an outstanding condition to a contribution, revenue cannot be recognized until that condition is met. TF
To be considered contribution revenue, the contribution must be (reciprocal, non reciprocal)
Contributions must be voluntarily made to meet the definition. TF
What are the 3 main types of contributions?
Donanted assets are recorded at ___ value.
Implied time restrictions are in reference to what type of donation?
Pledges are recognized. TF
True, and net of uncollectibles
A contribution is restricted until year 2. In year 1 how should this contribution be recorded?
As year 1 income. No footnote required.
For donated services to be considered as contribution revenue the services must require special skills that would likely of had to been purchased if not donated. TF
Pledges designated for use during the current year, with no other factors involved, are classified as what type of net asset?
Contributions with a matching stipulation are to be classified as temporarily unrestricted support. TF
False, as a refundable advance.
Collections (such as art) must be capitalized and presented on the statement of financial position. TF
False, they do not need to be capitalized
As long as the contributions have been pledged, the receipt of cash does not impact revenue recognition. TF