Chapter 20: Not-for-Profit Accounting and Reporting Flashcards
How must a nongovernmental Not-for-Profit (NFP) report expenses by
Functional and natural classifications.
Where are expenses reported for a NFP? Will they likely show an increase or decrease?
Most expenses will be reported as a decrease in net assets without donor restrictions.
Where are a majority of functional expenses incurred in a NFP?
Either program services or supporting activities.
How should a nongovernmental NFP report investments in debt securities?
At the quoted market prices.
What is the statement of activities for a NFP?
An operating statement equivalent to an income statement.
What is a supporting service expense for an NFP?
(1) management and general activities, (2) fundraising, and (3) membership development.
The primary purpose of a not-for-profit organization’s statement of activities is to provide relevant information to its
Resource providers.
Financial reporting by not-for-profit, nongovernmental entities should provide information
(1) useful in making resource allocation decisions;
(2) useful in assessing services and ability to provide services;
(3) useful in assessing management stewardship and performance;
(4) about economic resources, obligations, net resources, and changes in them; and
(5) about managers’ explanations and interpretations to help users understand financial information.
Unless explicitly restricted, how should gains and losses on investments purchased with net assets with donor restrictions be reported?
In the statement of activities as increases or decreases in net assets without donor restrictions.
Governmental fund financial statements are prepared using the
Current financial resources measurement focus and the modified accrual basis of accounting.
Are foreign current re-measurement gains or losses on monetary assets and liabilities included in other comprehensive income?
No, they are reported in current earnings as part of continuing operations.
When are non-exchange revenues derived from an exchange or exchange-like transaction recognized?
When the exchange occurs.
What information is provided by the statement of activities?
1) the effect of transactions and other events and circumstances that change the amount and nature of net assets; 2) the relationship among those activities; 3) how resources are used to provide programs and services
Contributions made should be recognized as
1) expenses and (2) decreases in assets or increases in liabilities in the period made. They should be measured at the fair value of the assets contributed
If the Uniform Prudent Management of Institutional Funds Act (UPMIFA) applies and appropriation has not happened by the governing board on unspecified funds, how are these funds reporting?
Within the Net Assets with Donor Restrictions
