NP-Stmnt of Activities Flashcards

1
Q

A private not-for-profit hospital’s performance indicator, which reports the results of operations, includes additional classifications. Which of the following normally would be included in the other operating revenues classification

A
Revenues from educational programs

B.
Revenues from unrestricted gifts

C.
Revenues from both educational programs and unrestricted gifts

D.
None of the answer choices are correct.

A

For a hospital’s performance indicator, revenues other than patient service revenues, such as revenues from educational programs, would be considered “other revenues.” Gifts and contributions would not be considered operating revenues.

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2
Q

Birdlovers, a not-for-profit community foundation, incurred $5,000 in management and general expenses in 20X1. In Birdlovers statement of activities for the year ended December 31, 20X1, the $5,000:

A

, all expenses in the statement of activities are classified as changes in unrestricted net assets and therefore decrease unrestricted net assets.

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3
Q

voluntary health and welfare entity received a $700,000 permanent endowment during the year. The donor stipulated that the income and investment appreciation be used to maintain its senior center. The endowment fund reported a net investment appreciation of $80,000 and investment income of $50,000. The organization spent $60,000 to maintain its senior center during the year. What amount of change in temporarily restricted net assets should the organization report as a result of these transactions?

A

The changes in temporarily restricted net assets include increases from investment income ($50,000) and net investment appreciation ($80,000) that the donor restricted to use for the senior center. Temporarily restricted net assets decrease by the amount of resources spent for the restricted purpose. These net assets released from restrictions reduce temporarily restricted net assets and increase unrestricted net assets by $60,000. Therefore, the change in temporarily restricted net assets is $80,000 + $50,000 - $60,000, or $70,000.

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4
Q

A private not-for-profit entity’s statement of activities should report the net change for net assets that are:

A.
unrestricted.

B.
permanently restricted.

C.
both unrestricted and permanently restricted.

D.
neither unrestricted nor permanently restricted.

A

shall report the amount of change in permanently restricted net assets, temporarily restricted net assets, and unrestricted net assets for the period

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5
Q

Which of the following classifications is required for reporting of expenses by all not-for-profit entities?

A

Therefore, the FASB requires expenses to be reported by functional classification (i.e., program services, management, fundraising, etc.).
Only those not-for-profits that are voluntary health and welfare entities must augment the functional classification of expenses that appears in the statement of activities with a natural classification of expenses, displayed in a matrix format, that is shown in a separate document, a statement of functional expenses.

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