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Flashcards in NFP Accounting Deck (44)
1

What are the 4 types of NPOs?

1. Voluntary health and welfare orgs
2. Health care orgs
3. Colleges and Universities
4. Other NPOs

2

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

3

ONPOs essentially benefit their own members. TF

True

4

NPOS follow GASB or FASB?

In general, FASB

5

Can governments can also run healthcare and college/university NPOs? If so, which org sets the rules?

Yes, GASB

6

FASB sets the standards for which types of entities?

For profit and Not for profit

7

GASB sets the standards for which types of entities?

State and Local government entities

8

NPOs use modified accrual accounting with a current financial resources measurement focus when reporting. TF

False, full accrual, economic resources focus

9

The purpose of NFP financial reporting is to all external users to assess: stewardship and ______, as well as services and _____.

performance, sustainability

10

What are the 3 types of NPO net asset categories?

1. Unrestricted
2. Temporarily Restricted
3. Permanently Restricted

11

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)

12

Expenses are only reported in the unrestricted net assets category? TF

True

13

What are the two categories of expenses?

Program services, and supporting services

14

Gains and losses are related to the main activities of the NFP. TF

False

15

Revenues are reported only for unrestricted net assets. TF

False, the are reported for all asset catergories

16

In good practice ____ of revenues should go to programs. .

85%

17

Fund raising expenses are classified as a (program/supporting services) expense?

Supporting services

18

The statement of position includes what financial categories?

Assets, Liabilities, and net assets

19

Management and general expenses are a type of _____ expense.

Supporting services

20

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.

21

Exchange transactions are reported under Unrestricted Net Assets in the SoA. TF

True

22

Debt proceeds are reported as cash inflows under ______ activities.

Financing

23

Purchase of capital assets are reported as cash ______ from _______ activities.

outflow, investing

24

What is a regular endowment?

A permanently restricted net asset

25

Term endowments are donated by an external party to be invested and that can be ______________.

Spent after a passage of time

26

Quasi endowments are set aside by the NFP and are accounted for as an unrestricted net asset. TF

True

27

In regards to endowments, which two questions are to be answered?

Who donated it, and must the principal remain intact?

28

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

True

29

How should NFPs report investments in debt securities?

Fair Value (Market Price)

30

Donated securities are reported at their donated FMV on the end of year financial statements? TF

False, mark to market at year end

31

If there is an outstanding condition to a contribution, revenue cannot be recognized until that condition is met. TF

True

32

To be considered contribution revenue, the contribution must be (reciprocal, non reciprocal)

Non reciprocal

33

Contributions must be voluntarily made to meet the definition. TF

True

34

What are the 3 main types of contributions?

Donated assets
Donated services
Pledges

35

Donanted assets are recorded at ___ value.

Fair

36

Implied time restrictions are in reference to what type of donation?

Deprieciable property

37

Pledges are recognized. TF

True, and net of uncollectibles

38

A contribution is restricted until year 2. In year 1 how should this contribution be recorded?

As year 1 income. No footnote required.

39

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

True

40

Pledges designated for use during the current year, with no other factors involved, are classified as what type of net asset?

Unrestricted

41

Contributions with a matching stipulation are to be classified as temporarily unrestricted support. TF

False, as a refundable advance.

42

Collections (such as art) must be capitalized and presented on the statement of financial position. TF

False, they do not need to be capitalized

43

As long as the contributions have been pledged, the receipt of cash does not impact revenue recognition. TF

True

44

When gifts are given in connection with a contribution, the transaction is treated as an ______ transaction, and the value of goods exchanged is ______ from the total amount received.

Exchange, deducted