F9-NFP

Question 1

Contribution classified as

Answer 1

Generally, the difference between the fair value of purchases and the amount transferred

Question 2

Cash contributions and unconditional pledges are recognized

Answer 2

are recognized as contribution revenue in the year in which the cash or pledge is received.

Question 3

ot-for-profit corporations are required to produce the following financial statements:

Answer 3

Statement of Financial Position
Statement of Activities
Statement of Cash Flows

Question 4

A promise to contribute is restricted

Answer 4

until conditions (collection) or eligibility requirements (date, etc.) have been satisfied.

Question 5

Restricted donations are released from restriction when

Answer 5

conditions or eligibility requirements have been satisfied. The Baker Fund has satisfied the restriction on $95,000 by spending the money on program expenses.

Question 6

Not-for-profit organizations are considered financially interrelated organizations in the event that one of the organizations:

Answer 6

Is both able to influence the operating and financial decisions of the other AND has an ongoing economic interest in the net assets of the other.

Question 7

Donated property is recorded

Answer 7

at its fair market value and is recognized as support on the Statement of Activities .

Question 8

The expense categories used by not-for-profit organizations generally fall under two main headings:

Answer 8

program services and support services.

Question 9

Program services

Answer 9

directly related to the mission of the organization

Question 10

Support services

Answer 10

Support services typically involve items such as fund raising, administration, management, and membership development.

Question 11

Fundraising

Answer 11

contemplates inducing potential donors to contribute to the entity

Question 12

Investing activities in the statement of cash flows should include

Answer 12

proceeds from the sale of long lived assets or insurance proceeds associated with the loss of long lived assets.

Question 13

Contributions to a non-profit include transactions

Answer 13

are unconditional (not requiring a future event to occur), non-reciprocal, voluntary, and not of an ownership investment.

Question 14

A not-for-profit organization needs to report its expenses in the statement of activities by

Answer 14

their functional classification (program classification, supporting activities, fund-raising, etc.). This method helps donors and others in assessing an organization’s service efforts.

Question 15

restricted to acquisition of property.

Answer 15

financing activities

Question 16

Donated services are recognized if the services received either

Answer 16

(1) create or enhance non-financial assets, or (2) require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation.

Question 17

A not-for-profit organization prepares a Statement of Activities that presents

Answer 17

Changes in unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.

Question 18

The not-for-profit entity has no variance power

Answer 18

the receipt is accounted for as a liability, not as a contribution on the Statement of Activities.

Question 19

An entity need not recognize contributions of works of art, historical treasures, and similar assets if the donated items meet all of the following conditions:

Answer 19

Are held for public exhibition, education, or research in furtherance of public service rather than financial gain.
Are protected, kept unencumbered, cared for, and preserved.
Are subject to an organizational policy that requires the proceeds from sale of collection items to be used to acquire other items for collections.

Question 20

The three functional classifications for expenses incurred by a non-profit organization are:

Answer 20

program services
management and general costs
fund-raising and other supporting services.

When common costs are incurred, they should be allocated to the appropriate classifications.

Question 21

The three most generally used revenue classifications for a hospital are

Answer 21

patient services revenues, other operating revenues, and non-operating revenues.

Question 22

Support is generally considered a component of

Answer 22

earnings under the broad heading of “Revenue, gains and other support”.

Question 23

Not-for-profit reporting guidance included in FASB ASC 958 primarily focuses on

Answer 23

Basic information for the organization as a whole. The standards establish guidance for general-purpose external financial statements provided by a not-for-profit organization.

Question 24

Quasi-endowment funds

Answer 24

Account for assets that have been internally designated by the institution for a specific purpose.
Unrestricted net assets.

Question 25

Endowment funds

Answer 25

Outside donors have stipulated that the principal is to be maintained intact in perpetuity.
Permanently restricted net assets.

Question 26

Term endowment funds

Answer 26

Outside donors have stipulated that the principal is to be maintained intact for a specified term or until the happening of some event.
Temporarily restricted net assets.

Question 27

The restricted current fund

Answer 27

Current assets that are outside donor-restricted for a specific purpose.
Temporarily restricted net assets.

Question 28

Volunteer donated service

Answer 28

The value of donated services should be recorded as both a contribution and an expense if the services performed are a normal part of the program or supporting services and would otherwise be performed by salaried personnel.
The services performed by the other volunteers for special events would not qualify since they are not a normal part of the program and would not otherwise be performed by salaried personnel.

Question 29

In a not-for-profit organization, if the pledges are legally enforceable

Answer 29

they are recorded in the accounts

Question 30

Marketable equity securities with readily determinable fair values and all investments in debt securities are measured at

Answer 30

fair value in the statement of financial position. Gains and losses on investments are reported in the statement of activities as increases or decreases in unrestricted net assets unless their use is temporarily or permanently restricted by explicit donor stipulations or law.

Question 31

Marketable securities are recorded at

Answer 31

their fair value at the balance sheet date

Question 32

Cash flows from Operating Activities in a nongovernmental not-for-profit organization include

Answer 32

applicable agency transactions, unrestricted cash contributions, program income, and interest income or dividend income from investments.

Question 33

Both grants to other organizations and depreciation

Answer 33

are recorded as expenses in a not-for-profit organization.

Question 34

How should a nongovernmental not-for-profit organization report depreciation expense in its statement of activities?

Answer 34

It should be included as a decrease in unrestricted net assets.

Question 35

The statement of functional expenses is required for

Answer 35

voluntary health and welfare organizations but is optional for all others.

Question 36

When a temporary restriction is satisfied, a reclassification is shown on the statement of activities by

Answer 36

decreasing temporarily restricted net assets and increasing unrestricted net assets.

Question 37

Unconditional pledges that will be collected over more than one year

Answer 37

should be reported as pledges receivable, valued at their present value.

Question 38

Cash contributions restricted by the donor for long-term purposes must be reported as

Answer 38

cash inflow in the financing activities section

Question 39

Temporarily restricted net assets would increase

Answer 39

the amount of the investment earnings and

increase in the market value of the underlying permanently restricted investment.

Question 40

Temporarily restricted net assets

Answer 40

are subject to donor imposed stipulations that either expire by passage of time or can be fulfilled and removed by actions of the organization.

Question 41

Donor-imposed restrictions that are met in the same period they are received may be recorded a

Answer 41

unrestricted support (contribution revenue)

Question 42

The museum would typically display proceeds from the sale of works of art or purchases of works of art

Answer 42

Investing activities.

Question 43

The simultaneous receipt and use of utilities is a form of

Answer 43

contributed assets and not services. The foundation would recognize the fair value of the contributed electricity as both revenue and expense in the period it is received.

Question 44

Donated items are valued at

Answer 44

fair value upon receipt

Question 45

Securities are marked to market and valued at

Answer 45

fair value at the balance sheet date

Question 46

statement of financial position

Answer 46

Assets, liabilities, and net assets.