F6 - Gov't Fund Structure and Fund Accounting

Question 1

NFP required Financial Statements

Answer 1

Statement of Financial Position

Statement of Activities

Statement of Cash Flows

Question 2

How would pledges be recognized as revenue in a NFP?

Answer 2

By the NRV.
There will be an estimate for the % of pledges that will actually be received.

The remaining % will be Allowance for Doubtful Accounts.

Question 3

How are donated services (like legal services, not simple voluntary labor hours) accounted for in a NFP?

Answer 3

As Revenues and Gains without Restrictions.
They are expensed simultaneously and reduce Net Assets.

Question 4

How would Net Patient Service Revenue be calculated?

Answer 4

Gross Patient Service Revenue - Charity Care - Contract Adjustments (basically the hospital adjusting the bills for some patients)

Note: Credit Losses are expensed and not treated as a Contra-Revenue account.

Question 5

For money received in a donation that also gives the donor a gift, what would be the amount of the contribution revenue?

Answer 5

Amount of Contribution Revenue recognized would be the difference in the donation amount and the FMV of the gift that was given.

Question 6

Contribution revenue recognition for not-for-profit organizations is based on the concept of:

Answer 6

Satisfying Conditions, not restrictions (which is used in reporting classifications)