ARE- Not-For-Profit organizations

Question 1

what are the three basic financial statements of a not for profit organization?

Answer 1

Statement of financial position
Statement of activities
Statement of cash flows

Question 2

What are the three classifications of net assets of a not for profit organization?

Answer 2

Unrestricted
Temporarily restricted
Permanently restricted

Question 3

Who decides whether assets are restricted

Answer 3

the donor

Question 4

Expenses are reductions of which classification of net assets

Answer 4

Unrestricted

Question 5

If a donor restriction is satisfied in the same period in which the funds are received, what is the asset classification?

Answer 5

Unrestricted

Question 6

What are the two ways in which a not for profit can report expenses?

Answer 6

Functional (mandatory)

Natural (optional)

Question 7

Which organization must report expenses in both functional and natural categories?

Answer 7

Voluntary health and welfare

Question 8

Is depreciation expense recorded in not for profit organizations?

Answer 8

Yes

Question 9

True or False?

Revenues from contributions are recorded net of an allowance for uncollectibles.

Answer 9

True

Question 10

True or False?

Contributed services not requiring specialized skills are recorded as revenues

Answer 10

False

Question 11

How is a board of trustees’ restricted asset classified?

Answer 11

Unrestricted

Question 12

How are donated services recorded

(assuming recognition is proper)?

Answer 12

As both a revenue and an expense

Question 13

Should donated “works of art” be capitalized?

Answer 13

No, if upon sale, proceeds would be used to purchase other works of art ( otherwise, Capitalize)

Question 14

Are college awarded scholarships a contra-revenue item?

Answer 14

NO

they are an expense

Question 15

How should donated materials and supplies to a health care organization be classified?

Answer 15

Other operating revenues

Question 16

How should donated services to a health care organization be classified?

Answer 16

Non-Operating item

Question 17

What is the “focus of financial reporting in a not for profit organization?

Answer 17

On the entity taken as a whole

Question 18

How should receipt of “restricted” cash be classified in the cash flow statement of a not for profit organization?

Answer 18

Financing activity

Question 19

What are the typical funds of a college /university?

Answer 19

Current
loan
annuity
endowment
agency
plant

Question 20

True or False?

Conditional support is the same as restricted support.

Answer 20

False

Question 21

How should debt and equity securities of a not for profit organization be reported?

Answer 21

at fair value

Question 22

`How should the donation of money to be used for a specific purpose be classified?

Answer 22

Temporarily restricted

Question 23

What restrictions can donors put on support?

Answer 23

Time and purpose

Question 24

How should the donated use of a facility be recorded?

Answer 24

as revenue and expense

Question 25

What is the basis of accounting of a not for profit organization?

Answer 25

Accrual accounting