F6 M1

Question 1

what F/S are NFPs required to produce?

Answer 1

1) statement of financial position
2) statement of activities
3) statement of cash flows

Question 2

net assets without donor restrictions

Answer 2

assets received from donors that do not have restrictions imposed on them

ex. board designated and quasi-endowment, no donor stipulations on assets

Question 3

net assets with donor restrictions

Answer 3

assets that are restricted in perpetuity or restrictions that will be satisfied over time, purpose, or certain acquisition requirements

Question 4

when are restrictions donations released from restriction?

Answer 4

when eligibility requirements are met, such as making necessary expenditures on programs

Question 5

what are fundraising expenses?

Answer 5

incurred to encourage (induce) contributions

Question 6

what are included in support services?

Answer 6

1) fundraising
2) management and general (administrative expenses)
3) membership development

Question 7

what are included in program services?

Answer 7

1) universities: education and research
2) hospitals: patient care and education
3) union: labor negotiations and training
4) day care: child care

Question 8

what does NFP reporting guidance FASB ASC 958 primarily focus on?

Answer 8

basic information for the organization as a whole

Question 9

what is the primary focus of the statement of activities?

Answer 9

1) how resources are used
2) changes in net assets with and without donor restrictions

Question 10

what is the primary focus of the statement of financial position?

Answer 10

to demonstrate the amt of assets, liabilities, and net assets and their relationships to one another at a moment in time

Question 11

what is the primary focus of the statement of cash flows?

Answer 11

provides relevant information about cash receipts and cash payments during a period of time

Question 12

how should a not for profit report its expenses in the statement of activities?

Answer 12

by functional classification in the statement of activities and natural classification analyzed by function in notes to the F/S

Question 13

what is composed in total net assets?

Answer 13

net assets with and without donor restrictions

Question 14

the statement of financial position is composed of?

Answer 14

1) assets
2) liabilities
3) net assets (equity)

Question 15

the statement of activities is composed of?

Answer 15

1) change in total net assets
2) change in net assets without donor restrictions
3) change in net assets with donor restrictions

Question 16

what are reclassifications?

Answer 16

items that increase one net asset class and decrease another at the same time

Question 17

examples of reclassifications

Answer 17

1) donor-imposed restrictions satisfied in same period as received as long as consistent policy in place
2) support perpetually restricted net assets ordinarily not reclassified because restrictions never expire
3) revenues, gains, and other support result in an increase to net assets without donor restrictions ordinarily do not become restricted

Question 18

what are program services?

Answer 18

activities for which an organization is chartered (established) to perform

Question 19

what are support services?

Answer 19

activities other than program services

Question 20

how should functional classification be reported?

Answer 20

either on face of F/S or in notes to F/S

Question 21

donor imposed restrictions met in the same period as received rule?

Answer 21

may be recorded as support (contribution revenue) without donor restrictions, provided the org. discloses and consistently applies this accounting policy

Question 22

in the statement of activities, how are expenses reported?

Answer 22

as decreases in net assets without donor restrictions

Question 23

what is a quasi-endowment?

Answer 23

functions like an endowment but is not restricted in perpetuity by donors

Question 24

what is an endowment?

Answer 24

a permanent fund that provides long-term financial support to nonprofit org.