F9: Not-For-Profit Organizations Continued Deck #2

Question 1

Resource inflows for NFPs are classified as either _____ or ______.

Answer 1

Revenue or other support

Question 2

Revenues represent what?

Answer 2

Exchange transactions (earns resources in exchange for services performed)

Question 3

Other support represent what?

Answer 3

Operating income that is donated

Question 4

Contribution definition

Answer 4

Voluntary transfer of cash or assets

Question 5

Cash Contributions are recorded as revenues when?

Answer 5

• In period they are received

- Fair Value

Question 6

Unconditional Promises AKA what?

Answer 6

Pledges

Question 7

Unconditional Promises are recorded as revenues when?

Answer 7

• When promise is made

- Fair Value

Question 8

An unconditional promise may be:

Answer 8

Written or verbal

Question 9

Conditional Promises are recorded as revenues when?

Answer 9

When the conditions have been met

Question 10

Multi-year pledges are recorded at what?

Answer 10

NPV at the date the pledge is made

Question 11

How are Multi-Year Pledges recorded now and in the future?

Answer 11

Now = revenue

Future pledges = temporary restricted revenue

Question 12

Split Interest Agreements definition

Answer 12

When NFO receives benefits that are shared with other beneficiaries

Question 13

Split Interest Contributions should be measured at what and displayed how?

Answer 13

• Measured at FV at date of acquisition

- Displayed as temporarily restricted

Question 14

Contributions of Donated Services are recognized SOME of the time. SOME stands for what?

Answer 14

S- specialized skills are required and possessed by the donor
O- otherwise needed by the organization
M- measurable
E- easily (at fair value)

Question 15

Donated collection items are not required to be recoded if ALL criteria are met

Answer 15

(Same as governmental reporting)

• Held for public viewing
• Collection is cared for
• Organization has a policy

Question 16

Unconditional promises to contribution in the future are reported as what?

Answer 16

Restricted support at PV

Question 17

Agency transactions consist of what?

Answer 17

Resources received by the NFP over which the NFP has little or no discretion or variance power

Question 18

Gifts in-kind definition

Answer 18

• Non-cash contributions to a NFP

- Measured at FV

Question 19

Exchange transactions definition

Answer 19

Reciprocal transfers in which each party receives and sacrifices something of equal value

Question 20

Calculation for exchange transaction contributions:

Answer 20

Amount transferred
- FV dues/purchases
= Contribution revenue

Question 21

Recipient Accounting as an agent: asset treatment if no variance power

Answer 21

• Fair value

- Recognized as a liability

Question 22

Recipient Accounting as an agent: asset treatment if granted variance power

Answer 22

• Fair value

- Recognized as contribution revenue when received and expensed when distributed to the beneficiary

Question 23

Recipient Accounting if financially interrelated and granted variance power

Answer 23

• Fair value

- Recognized as contribution revenue when received and expensed when distributed to the beneficiary

Question 24

Beneficiary Accounting with an agent: recognition rule

Answer 24

Recognize their rights to assets held by others UNLESS recipient has variance power

Question 25

Gains & losses on investments are reported in what statement?

Answer 25

Statement of Activities

Question 26

How are gains & losses on investments reported?

Answer 26

As increases/decreases in unrestricted net assets UNLESS restricted

Question 27

An endowment fund is used to account for what?

Answer 27

Donated assets

Question 28

3 types of endowment funds

Answer 28

1- Permanent endowment
2- Term endowment
3- Quasi-endowment

Question 29

In a permanent endowment, corpus (principal) is what?

Answer 29

NOT allowed to be spent

Question 30

A quasi-endowment fund is used when?

Answer 30

When the internal governing board of an institution has determined that funds are to be retained and invested for specified purposes

Question 31

Is Fund Accounting used for external reporting for NFP?

Answer 31

NO!

Question 32

7 basic types of funds used by NFP for internal reporting

Answer 32

1- unrestricted current funds
2- restricted current funds
3- plant funds
4- loan funds
5- endowment funds
6- annuity and life income funds
7- agency funds

Question 33

Revenue types for colleges and universities

Answer 33

• Student tuition and fees
• Government aid, grants
• Gifts

Question 34

Calculation for gross revenue from tuition and fees

Answer 34

Assessed Student Tuition and Fees
- Cancelled classes
= Gross revenue from tuition and fees

Question 35

Expense type for colleges and universities

Answer 35

Scholarship/fellowship

Question 36

3 Revenue types for health care organizations

Answer 36

1- Patient Service Revenue
2- Other Operating Revenue
3- Non-operating revenue and support gains/losses

Question 37

Charity care is not recorded as _____ or ______.

Answer 37

A receivable or revenue

Never expected to result in cash flows to the hospital

Question 38

Examples of “Other Operating Revenues” for healthcare organizations

Answer 38

• tuition from schools
• revenues from education programs
• donated supplies and equipment
• specific purpose grants
• revenues from auxiliary activities
• cafeteria revenue
• parking fees
• gift shop revenue
• medical transcription fees

Question 39

Examples of “Non-Operating Revenues” for healthcare organizations

Answer 39

• Donated services

- Unrestricted items

Question 40

Calculation for Patient Service Revenue

Answer 40

Gross Patient Service Revenue
- Charitable services
= Patient Service Revenue