62 SURGENT MCQ Flashcards
Unrestricted earnings on specific-purpose fund investments that are part of a hospital’s central operations are reported as:
specific-purpose fund restricted revenues.
specific-purpose fund unrestricted revenues.
general fund deferred revenues.
general fund unrestricted revenues.
Question #301662
Which of the following types of information would be included in total net assets in the statement of financial position for a nongovernmental not-for-profit organization?
Assets with donor restrictions, assets without donor restrictions, and net liabilities
Total current assets and long-term assets
Total current net assets and liabilities
Net assets with donor restrictions and net assets without donor restrictions
Question #301305
Net assets with donor restrictions and net assets without donor restrictions
The total net assets in the statement of financial position is the total equity of a not-for-profit entity. The equity is reported in two categories, net assets with donor restrictions and net assets without donor restrictions, depending on whether there are donor-imposed constraints on asset use. Within these categories or in the notes, additional detail can be included about donors’ wishes for their contributed assets.
CHATGPT4
The total net assets in the statement of financial position for a nongovernmental not-for-profit organization would include “Net assets with donor restrictions and net assets without donor restrictions.” This distinction reflects the nature of the resources available to the organization and how they can be used, according to donor stipulations or the absence thereof.
Not-for-profit organizations categorize their net assets based on whether they are subject to donor-imposed restrictions. Assets with donor restrictions are funds designated for specific purposes, time frames, or acquisition of long-lived assets, and can only be used in accordance with the donor’s stipulations. Assets without donor restrictions are available for use at the organization’s discretion for any purpose in carrying out its mission.
Other options mentioned, such as “Assets with donor restrictions, assets without donor restrictions, and net liabilities,” “Total current assets and long-term assets,” and “Total current net assets and liabilities,” mix elements that would not be collectively categorized solely as “total net assets.” Liabilities, for instance, are not included in net assets but are subtracted from total assets to determine net assets. Similarly, distinguishing between current and long-term assets or liabilities is a different aspect of categorizing the statement of financial position and not directly related to the categorization of net assets per donor restrictions.
Relevant Terms
Current Assets
Donor-Imposed Restriction
Financial Position
Net Assets
Net Assets with Donor Restrictions
Net Assets Without Donor Restrictions
Not-for-Profit Entity
Reference
2121.01
Authorities
FASB ASC 958-210-45-9
Mattes Curators is an organization that seeks to acquire and maintain historic buildings. During 20X8, Mattes was given a gift of securities with the indicated stipulations:
Debt securities valued at $1,545,000 are to be held for one year and then are to be sold with the proceeds used to provide funds for acquisition of a historic residence in the community.
Equity securities valued at $470,000 are to be used for whatever purposes Mattes’ board of directors deems appropriate.
What amount should Mattes include as net assets without donor restrictions as a result of this donation?
$2,015,000
$1,545,000
$0
$470,000
Question #302082
Restricted and Unrestricted
Bridging the Gap
Settam
Know the meanings of restricted and unrestricted funds and be able to apply them to situtations.
A nongovernmental, not-for-profit health care entity
Restricted cash is noncurrent assets.
Divide prepaid insurance where the term policy is two years from fiscal end into a current portion and a noncurrent portion.
A non-governmental
.
Healing Gardens
What is the appropriate characterization of the net assets of a nongovernmental NFP organization?
ABC Foundation
In the preparation of the statement of activities for a nongovernmental NFP entity, all expenses are reported as decreases in which of the following net asset classes?
Net assets without donor restrictions
Which of the following costs should a nongovernmental not-for-profit organization report as a supporting service expense?
Oz
What is the primary purpose of the statement of activities of a nongovernmental not-for-profit organization?
To report the change in net assets for the period.
During the year, Smith University’s board of trustees established a $100,000 fund to be retained and invested for scholarship grants. The fund earned $6,000 which had not been disbursed at December 31. What amount should Smith report in a quasi-endowment fund’s net assets at December 31?
$106,000
Since the principal of the endowment and the income from investment of endowment funds are both restricted to the purpose of funding scholarships, and the investment income remained undisbursed at the end of the fiscal year, the principal and income both contribute to the net assets of this specific fund.
Not-for-profit entities must disclose the types of donor restrictions. Which of the following is not an example of a type of restriction?
Temporary or permanent
Support for a particular operating activity
Investment for a specified term
Acquisition of long-lived assets
A nongovernmental not-for-profit entity borrowed $5,000, which it used to purchase a truck. In which section of the organization’s statement of cash flows should the transaction be reported?
In cash inflow from financing activities and cash outflow from investing activities
Raising cash through borrowings is a financing activity. Using cash to purchase a truck is an investing activity.
Which of the following resources increases the net assets with donor restrictions of a nongovernmental, not-for-profit voluntary health and welfare entity?
Which of the following would a nongovernmental not-for-profit educational institution report as program services?
Publicity costs
Teacher salaries
Management salaries
Fundraising expenses
All NFPs are required to disclose an analysis of expenses by both functional and natural classifications to be presented in:
two locations in the financial statements: the notes and in a separate financial statement.
one location in the financial statements: a separate financial statement.
one location in the financial statements, whether in the notes or in a separate financial statement.
one location in the financial statements: the notes.
Arts For All
Langohrs
Alpha Hospital
How should a nongovernmental, not-for-profit entity report donor-restricted cash contributions for long-term purposes in its statement of cash flows?
A portfolio of equity securities that are traded on a national exchange is donated to a private, not-for-profit college as an endowment fund. How should the equity portfolio be valued in the college’s year-end financial statements three years after the donation?
During the current year, Mill Foundation,
Term: Restrictions
Restrictions are limits on assets of not-for-profit entities imposed by donors’ explicit, or clearly evident implicit, stipulations. Decisions, resolutions, appropriations, etc. by directors, trustees, or managers do not result in restrictions on assets.
Imaging Solutions Corporation
Classics For All,
Nongovernmental not-for-profit entities are required to provide which of the following external financial statements?
Which of the following options is permitted by the FASB for reporting collections held by nongovernmental not-for-profit organizations?
Mattes Curators
In year 1, a donor promised to give $100,000 to a nongovernmental, not-for-profit kitchen if it provides 20,000 meals by March 31, year 2. At the end of year 1, the kitchen had provided 20,000 meals. In which line item, if any, should the contribution be reported in the kitchen’s statement of financial position at the end of year 1?
Which of the following is not a required disclosure by a not-for-profit entity (NFP)?
In Year 2, the Nord Association,
A $100,000 gift
