Deck 24 Flashcards
How does discount amortization effect interest expense?
Increases interest expense (This will be greater than the cash payment)
Gross profit recognized (percentage of completion) =
Gross profit x (costs incurred to date/total estimated costs)
What kind of not-for-profit organization requires a statement of functional expenses?
Voluntary Healthy and Welfare organizations
Donated property received by a not-for-profit is recorded at:
FMV and is recognized as support
Contributions to a non-profit include transactions that are:
Unconditional (not requiring a future event to occur)
Donations of medicine:
Other operating revenue
Quasi-Endowment Fund
Account for assets that have been internally designated by the institution for a specific purpose
The satisfaction of a temporarily restricted net asset increases:
Unrestricted net assets (decreases temp. restricted assets)
How should operating expenses for a nongovernmental not-for-profit organization be reported?
Change in unrestricted net assets
Board-designated funds vs. donor-imposed stipulations:
Board-designated = unrestricted; Donor = temporarily or permanently restricted
In not-for-profit accounting, expenses are reported as:
Decreases in unrestricted net assets (Two types: program services and support services)
Unconditional promise vs. conditional promise (Not-for-profit) - when is revenue recognized?
Unconditional: recognize when pledge is made; conditional: recognize when conditions are met
Donated services should be recorded as both:
Contribution revenue and expense at fair value if they meet certain criteria
Journal entry for recipient without variance power (NFP)
Dr. Asset and Cr. Refundable Advance (liability)
Journal entry for recipient with variance power (NFP)
Dr. Asset and Cr. Contribution revenue
Permanent endowment (NFP)
Corpus (principal) is not permitted to be spent
Term endowment (NFP)
Must be held for a specified term
Quasi-endowment (NFP)
Internal governing board; designations of unrestricted net assets
When is fund accounting applied for not-for-profit accounting?
Only for internal purposes, not external
Student tuition and fees should be reported at what amount:
Gross amount
Gross revenue from tuition and fees =
Assessed student tuition and fees - cancelled classes
Net patient service revenue =
Gross patient service revenue - charitable services - contractual adjustments
