F6 - NFP and Governmental Accounting Flashcards
What are the required statements for a nongovernmental NFP?
1) Statement of financial position
2) Statement of activities
3) Statement of cash flows
What is the guidance included in FASB ASC 958, Financial Statements of NFPs, focused on?
It primarily focuses on basic information for the organization as a whole (i.e., standards for general-purpose external F/S provided by NFPs).
What classifications are required for reporting expenses by all NFPs?
Expenses must be in the statement of activities by their functional classification (program classification, supportin activities, fund-raising, etc.) and disclose the expenses in a natural classification by function in the notes to the F/S.
Donor-imposed restrictions that are met in the same period they are received may be recorded as what?
may be recorded as support (contribution revenue) without donor restrictions, provided that the organization discloses and consistently applies this accounting policy.
If an NFP received cash contributions with donor restrictions with specific requirements relative to the acquisition of property, how should that amount be categorized on the statement of cash flows?
Initially, you would think this cash flow is an investing activity since it’s PP&E related. However, focus on the initial action of the cashflow; it was an inflow of cash, similar to getting a loan. This means that the cash inflow itself is a financing activity.
What is the formula for gross revenue for tuition?
Tuition revenue + scholarship - refunds
Why are enterprise funds set up?
to account for the acquisition and operation of governmental facilities and sercies that are intended to be primarily self-supported by user charges. For example, a municipality constructing a utility plant.
How do you know if a fund is a debt or capital fund if the governmental unit is securing debt to finance construction?
It’s a capital project fund if the resources are used for the acquisition or construction of major capital assets by a governmental unit. For example, a schoold board securing debt finance to construct or renovate a school facility.
