NPO

Question 1

The net asset section of the statement of financial position of a nongovernmental, not-for-profit organization includes two accounts (net asset class)

Answer 1

Net assets without donor restrictions and Net assets with donor restrictions.

Question 2

functional expense categories for a nongovernmental not-for-profit organization

Answer 2

Program services, management and general, and fund-raising

Question 3

Program services

Answer 3

expenses that further the mission of the organization and are directly related to the program

Question 4

Management and general and fund-raising expenses are

Answer 4

for services in support of the organization’s mission

Question 5

How should a nongovernmental not-for-profit organization report investments in its financial statements?

Answer 5

A not-for-profit entity reports its investments in debt and equity securities at market value on the statement of financial position.

Realized and unrealized gains and losses are reported on the statement of activities.

Question 6

A nongovernmental not-for-profit organization’s statement of activities is similar to which of the following for-profit financial statements?

Answer 6

income statement

The statement of activities of a not-for-profit organizations shows, on an accrual basis, how the entity generates its resources and how it spends them

Question 7

When is donor restriction released?

Answer 7

When contributions received by a not-for-profit organization are restricted, they will be included in net assets with donor restrictions. Later, when the condition related to the restriction is satisfied and the organization spends the money for its intended purpose, the restriction is released in the amount of the expenses

Question 8

An unrestricted cash contribution should be reported in a nongovernmental not-for-profit organization’s statement of cash flows as an inflow from

Answer 8

operating activities

Question 9

restricted cash donation should be reported in which section of statement of cash flow?

Answer 9

financing activities include the cash flow effects of liability transactions such as proceeds from loans and loan repayments, as well as contributions that are restricted by the donor.

Question 10

Nongovernmental not-for-profit organizations are required to provide which of the following external financial statements?

Answer 10

Statement of financial position, statement of activities, statement of cash flows

Question 11

What is the appropriate characterization of the net assets of a nongovernmental not-for-profit organization?

Answer 11

residual interest