FAR-Non Profit JEs

Question 1

When an unrestricted gift is received, what is the credit?

Answer 1

Debit Cash or Receivable
Credit Revenues (UNA) 

*UNA = Unrestricted Net Assets

Question 2

When a temporarily restricted gift is received, what is the credit?

Answer 2

Revenues (TRNA)

*TRNA = Temporarily Restricted Net Asset

Question 3

When the temporarily restricted asset is ready to be spent, what is the debt and credit in the initial JE?

Answer 3

DR. Net Assets released (TRNA)

Cr. Net Assets release (UNA)

Question 4

What is the journal entry when professional services are donated?

Answer 4

DR: Expenses (UNA)
CR: Contributed Revenues (UNA)

Question 5

How would a NPO record pledges in which some of the pledges will be received in the current period, some will be received in the next period, and some are not expected to be honored?

Answer 5

DR: Pledges Receivable
CR: Allowance of uncollectable pledges
CR: Revenues (UNA)
CR: Revenues (TRNA)

*Receivable is recorded in full. Percent that is expect to not be honor is debited. Pledges expected to be collected in the current period are unrestricted. Pledges expected to be collected in the future period are temporarily restricted.

Question 6

How is a contribution recorded to an agent or trustee who has variance power over the donation, or the beneficiary of the donation is financially related?

Answer 6

DR: Cash
CR: Contribution Revenue

Question 7

What is the JE to record a cash donation to an NPO that is a pass-through entity. IE: The NPO that received the donation is obligated to transfer the donation to a separate NPO.

Answer 7

DR: Cash
CR: Liability

Question 8

What is the JE to record a cash donation in which the donor retains the right to revoke the gift?

Answer 8

DR: Cash
CR: Refundable Advance

Question 9

What is the JE to record a receivable from patients and 3rd party payors such as Insurance Companies?

Answer 9

DR: Receivable Third Party Payors
DR: Receivable Patients
CR: Patient Service Revenues