Section 30 - NFP Accounting Flashcards Preview

FAR > Section 30 - NFP Accounting > Flashcards

Flashcards in Section 30 - NFP Accounting Deck (30):
1

What 4 groups do not-for-profit accounting cover?

1) Health care

2) Colleges and universities (non-governmental)

3) Voluntary health and welfare (United Way, Red Cross, Salvation Army)

4) All other not above (fraternities, labor unions, museums, libraries, non profit orgs)

2

What are the 3 basic financial statements required for not-for-profit accounting?

1) Statement of Financial Position (B/S)

2) Statement of Activities (I/S + RE)

3) Statement of Cash Flows

3

What method of accounting is used for not-for-profit accounting?

ACCRUAL

4

What is reported on the Statement of Financial Position (B/S)?

Assets = liabilities + net assets

5

What are the three accounts reported in the Net Assets section of the Statement of Financial Position (B/S)?

1) Unrestricted net assets - Resources available for general use. May include asset set aside by the Board of Trustee, however, this is not a true restriction since it may be reversed.

2) Temporarily restricted net assets - Use is restricted to a future time, which could then convert to Unrestricted

3) Permanently restricted net assets - Use is restricted

6

What is reported on the Statement of Activities (I/S)?

1) Revenues/Gains
-Contributions from donors and investment income
-Property - included FMV at date of gift
-Services - only include if professional and NPO would otherwise paid for them

2) Net assets released from restriction - temporarily restricted net assets that became unrestricted during the year

3) Expenses - only unrestricted net assets

4) Changes in all three Net Assets classes

7

What is the JE to record a unrestricted cash contribution received by a NPO (revenue)?

Cash (operating activity)
Revenues (UNA - unrestricted net assets)

8

What are the JE to record a temporarily restricted cash contribution received by a NPO (revenue)?

TESTED A LOT

Cash received
Cash (operating activity)
Revenues (TRNA)

Money is spent
Net assets released (TRNA)
Net assets released (UNA)

Report actual cost
Expenses (UNA)
Cash

9

Does the net increase in UNA and the increase in expenses (decrease UNA) has any net effect on unrestricted Net Assets?

No

10

What are the 3 activities in the Statement of Cash Flows?

1) Operating activities

2) Investing activities

3) Financing activities

11

What is included in the Operating activities for the Statement of Cash Flows?

-Unrestricted revenue
-Temporarily restricted revenue
-Revenue and expense
-INTEREST INCOME/EXPENSE
-DIVIDEND INCOME

***may use direct or indirect method

12

What is included in the Investing activities for the Statement of Cash Flows?

Flow from buying and selling assets
-investments acq/sold
-PPE acq/disposal

13

What is included in the Financing activities for the Statement of Cash Flows?

Flow from borrowings and repayments
-Endowments
-Restricted contributions/revenues
-$$ restricted for LT purposes
-Pmt on bonds, N/P, $$ restricted for acq of PPE

14

What is the additional F/S Volunteer Health and Welfare Organizations must provide?

Statement of Functional Expense

Public support (donations)
+Revenues (earned)
-Program expenses (further mission of org)
-Support services (secondary to mission)
=Excess of revenue over expenses

15

What are the specific activities in the line items for the Statement of Functional Expense?

Public support - contributions, grants, bequests, pledges, special events revenues

Revenues (earned) - membership dues, investment income, client service revenue, fees

Program expenses - further mission of org - research, community services, public health and education

Support services - secondary to mission - G. A. M (marketing, tax prep, print annual report), fundraising

16

When is donations of services recorded?

-when it's a professional services
-when org would have paid for the services (essential services)

JE
Expenses (UNA)
Contribution revenues (UNA)

17

How are the donations of art, artifacts, or antiques recorded?

Not recognized as assets or contribution revenue if they are held for display or education OR their sale results in the purchase of similar items

When both Temporarily Restricted Assets and Unrestricted Assets are available for use, TRA are used first.

18

How are investments (marketable securities) recorded?

Trading - FMV, unrealized gains/losses on Statement of Act.
AVS - FMV, unrealized gains/losses on Statement of Act.
HTM - Bonds

Doesn't cover Equity securities

19

How are pledges recorded?

Pledges receivable (at P.V.)
Allowance for uncollectible pledges
Revenue (UNA)
Revenue (TRNA)

20

If NPO collect money for others such as a foundation (agent or trustee), how are contribution classified?

Revenue - have power to redirect money OR beneficiary of donation is financially related

Liability - if don't meet either of the two above

21

How are scholarships, tuition remissions and refunds treated for Colleges and Universities?

Tuition remissions and scholarships are revenue (if go to school)

Refunds - not revenues

Scholarships - reduction of revenue and netted against college's tuition

22

What are the 4 F/S required for hospitals?

1) Balance Sheet (Statement of Financial Position)

2) Statement of Changes in Net Assets

3) Statement of Cash Flows

4) Statement of Operations (activities) ****MOST TESTED***

23

What is reported in the Statement of Operations (UNA) (Activities) for hospitals?

PP-NO-ONE

Patient service revenue
-Provision for contractual adjustments
=NET PATIENT SERVICE REVENUES
+Other operating revenues, gains and losses (earned)
-Operating expenses
+Non-operating revenues (Other income) (unearned)
=EXCESS OF REV/GAINS over EXP/LOSSES (PERFORMANCE INDICATOR)

24

What is included in Patient Service Revenue on the Statement of Operations?

-Hotel type
-Medical
-Lab

25

What is included in "Provision for contractual adjustments" on the Statement of Operations?

-Medicare
-Employee discount
-Not charity

26

What is included in "Other operating revenues, gains and losses (earned)" on the Statement of Operations?

-Non-medical - parking, gift shop, cafeteria, tuition
-Donated medicines and blankets (supplies and equipment)
-Restricted grants
-Net assets released from restriction used for operations

27

What is included in "Operating expenses" on the Statement of Operations?

-Bad debts
-drugs,
-doctors
-Gen and Admin
-Dept
-Int results from operations

28

What is included in "Non-operating revenues (Other income) (unearned)" on the Statement of Operations?

Other income - unearned
-unrestricted donations, gifts, bequests
-unrestricted interest and dividend income
-unrestricted grants
-donated services

29

What are the items that are reported separately from performance indicator?

Excluded from performance indicator
-Restricted donations/contributions
-Assets released from donor restrictions for long-lived assets (PPE)
-Restricted investment income
-Change in net unrealized gains and losses (other than trading) on unrestricted investments
-Transfers to parents
-Discontinued operations and Extraordinary items

30

How are Hospital Charity Care classified?

Not a revenue and is disclosed in the NOTES only