F9: Not-For-Profit Organizations

Question 1

NFP uses ____, not GASB

Answer 1

FASB

Question 2

NFP are divided into 4 separate categories:

Answer 2

1- Health care organizations
2- Educational institutions
3- Voluntary Health and Welfare organizations
4- Other Private (not governmental) NFP organizations

Question 3

Who are some users of NFP statements?

Answer 3

-donors, members, creditors

Question 4

GAAP requires that NFP organizations report using what basis of accounting?

Answer 4

Full accrual basis of accounting

Question 5

What is the overall emphasis for NFP statements?

Answer 5

Basic info for the organization as a whole

Question 6

4 required financial statements for NFP

Answer 6

1- Statement of Financial Position
2- Statement of Activities
3- Statement of Cash Flows
4- Statement of Functional Expenses

Question 7

What 3 components make up the Statement of Financial Position?

Answer 7

(Think B/S)
1- assets
2- liabilities
3- net assets (equity)

Question 8

Assets & liabilities for NFP are classified as:

Answer 8

Current or noncurrent in order of maturity

Question 9

3 components of Net Assets (equity) are:

Answer 9

“PUT”
1- Unrestricted net assets
2- Temporarily restricted net assets
3- Permanently restricted net assets

Question 10

Internal board-designated funds are considered what?

Answer 10

Unrestricted net assets

Question 11

Unrestricted net assets definition

Answer 11

Assets that aren’t permanently or temporarily restricted

Question 12

Temporarily restricted net assets definition

Answer 12

Donor-imposed stipulations that expire either through passage of time or can be fulfilled

Question 13

Permanently restricted net assets definition

Answer 13

Use is limited by donor-imposed stipulations that neither expire nor can be fulfilled

Question 14

What four elements are presented in the Statement of Activities?

Answer 14

(Think I/S)

• change in total net assets
• change in PUT net assets

Question 15

When are donor-imposed contributions recorded as restricted revenue?

Answer 15

Period in which received

Question 16

When a donor restriction is satisfied, what happens?

Answer 16

A reclassification is reported

Question 17

How are expenses reported in the Statement of Activities?

Answer 17

As decreases in unrestricted net assets

Question 18

Where are expenses shown?

Answer 18

Either in the face of the statement or in the notes

Question 19

3 Classifications of Expenses

Answer 19

1- Program Services
2- Support Services
3- Combined Costs

Question 20

Program Services definition

Answer 20

Activities of the organization

Question 21

Support Services definition

Answer 21

Everything not classified as a program service

Question 22

Combined Costs definition

Answer 22

NFPs that combine fund raising efforts with educational services

Question 23

Is a Statement of Cash Flows required for all NFP organizations?

Answer 23

YES

Question 24

What format is allowed for the Statement of Cash Flows

Answer 24

Either the direct method or the indirect method can be used

Question 25

What 4 sections are shown in the Statement of Cash Flows?

Answer 25

1- Operating Activities 2- Financing Activities 3- Investing Activities 4- Cash & Cash Equivalents

Question 26

Agency transactions are reported under what section of the Statement of Cash Flows?

Answer 26

Operating Activities

Question 27

Cash transactions related to borrowing are reported under what section of the Statement of Cash Flows?

Answer 27

Financing Activities

Question 28

Cash transactions related to certain restricted contributions are reported under what section of the Statement of Cash Flows?

Answer 28

Financing Activities

Question 29

Donor-imposed restrictions limiting use to long-term purposes are reported under what section of the Statement of Cash Flows?

Answer 29

Financing Activities

Question 30

Board designated revenues are reported under what section of the Statement of Cash Flows?

Answer 30

Operating Activities

Question 31

Proceeds from the sale of works of art or purchases of works of art are reported under what section of the Statement of Cash Flows?

Answer 31

Investing Activities

Question 32

Investment in equipment are reported under what section of the Statement of Cash Flows?

Answer 32

Investing Activities

Question 33

Proceeds from the sale of assets that were restricted are reported under what section of the Statement of Cash Flows?

Answer 33

Investing Activities

Question 34

Who is required to present a Statement of Functional Expenses?

Answer 34

Voluntary health and welfare organizations

Question 35

Who is NOT required to present a Statement of Functional Expenses?

Answer 35

All other NFP organizations other than voluntary health and welfare

Question 36

4 Classifications of Expenses on the Statement of Functional Expenses

Answer 36

1- Program Support Expenses 2- Fund-raising Expenses 3- Management and General Costs 4- Multiple Cost Items