F9 - Not For Profit Organizations

Question 1

What is the journal entry for the donation of services?

Answer 1

Expense XX

Contributions - Non-operating revenue XX

Question 2

T/F: Non-profits do not record depreciation on fixed assets

Answer 2

False; depreciation is recorded as an element of expense

Question 3

On the balance sheet of a not-for-profit hospital, at what value should marketable equity securities be reported?

Answer 3

FMV with gains/losses going to the Statement of Activities (Income Statement)

Question 4

Unrestricted cash donations to a not-for-profit organization are included in which section of the statement of cash flows?

Answer 4

Operating activities

Question 5

If a non-profit is financially interrelated with its beneficiary, how should receipts of the non-profit be disclosed on the beneficiary financial statements?

Answer 5

As an equity transaction on the statement of activities

Question 6

Which financial categories are used in a nongovernmental not-for-profit organization’s statement of financial position?

Answer 6

Assets, liabilities and net assets

Question 7

Where should gains on permanently restricted funds be included on the balance sheet?

Answer 7

Under current assets; the permanent portion is on the balance sheet under non-current assets

Question 8

T/F: Quasi-endowment funds are classified as restricted net assets

Answer 8

False; quasi-endowment funds are internally restricted and are accordingly reported externally as unrestricted

Question 9

T/F: Donor-imposed restrictions that are met in the same period they are received may be recorded as unrestricted support (contribution revenue), provided that the organization discloses and consistently applies this accounting policy

Answer 9

True