Ch. 36 - Not-for-Profit

Question 1

Contribution revenue policies

Answer 1

1. deferral method

2. restricted fund method

Question 2

Three types of contributions

Answer 2

1. unrestricted
2. restricted
3. endowments

Question 3

Unrestricted contributions - recognition criteria

Answer 3

1. the amount to be received can be reasonably estimated

2. ultimate collection is reasonably assured

Question 4

Restricted contributions - recognition (deferral method)

Answer 4

1. the amount to be received can be reasonably estimated
2. ultimate collection is reasonably assured
3. the expenses have been incurred

Question 5

Contributions of capital assets (depreciable) - recording

Answer 5

1. originally recorded as a deferred contribution

2. recognized with amortization

Question 6

Contributions of capital assets (non-depreciable) - recording

Answer 6

recorded as a debit to the asset, and a credit to net assets (not revenue)

Question 7

Endowment contributions - recording

Answer 7

1. recorded as a debit to assets and a credit to net assets (not revenue)

Question 8

Disclosures

Answer 8

1. restricted deferred contributions

2. restricted net assets from permanent endowments

Question 9

Restricted Fund Method - revenue recognition

Answer 9

recognized when received in the appropriate fund (no deferrals, unless there is no fund, then it is deferred in the general fund)

Question 10

Donated Goods/Services - Can recognize as revenue if 2 criteria are met

Answer 10

1. the FV can be reasonably estimated

2. the goods/services are used in the normal course of business and would have been purchased anyways

Question 11

Capital Assets - Special NPO Rule

Answer 11

1. NPOs with revenue under $500K can chose to:
   a) directly expense the costs of tangible assets
   b) capitalize and amortize the assets