Financial Statement Accounts(SFCPA)

Question 1

Statement of financial position

Answer 1

Balance sheet for not-for-profit organizations

Assets= liabilities + net assets

Question 2

Net assets without donor restrictions

Answer 2

Assets that the NFP can use how they want

Question 3

Net assets with donor restrictions

Answer 3

Net assets with either a time restriction, purpose restriction, or a permanent restriction.
Set by donor at time of donation

Question 4

Program services

Answer 4

Expenses directly related to the programs that perform the mission of the NFP

Question 5

Supporting services

Answer 5

Management, general expenses, and fund raising (NFP)

Question 6

Large accelerated filer

Answer 6

Files 10K within 60 days of fiscal YE and 10Q within 40 days end of quarter

Market value of $700 million or more

Question 7

Accelerated filer

Answer 7

Market value between $75-700 million. 10k within 75days YE and 10Q within 40 days

Question 8

Non-accelerated filer

Answer 8

Market value less than $75million.

10k within 90days YE and 10Q within 45days QE

Question 9

Basic earnings per share

Answer 9

(net income - preferred stock dividends) / weighted avg. # of outstanding common shares

Question 10

Direct write off method

Answer 10

Rarely used- doesn’t conform to GAAP.

DR. bad debt expense
CR. A/Right

Question 11

Allowance method

To write off uncollectible debt

Answer 11

DR. allowance for doubtful accounts

CR. A/R

Question 12

Factoring receivables without recourse

Answer 12

DR CASH
DR Loss on sale of receivables
CR. A/R

(Company assigns their receivables to a factor,usually a bank, for a fee, and receives a cash in return)
without recourse is considered sale of receivables

Question 13

Factoring receivables WITH recourse

Answer 13

DR. Cash
DR. Loss on sale of receivables
CR. A/R
CR. Recourse liability

(Company assigns their receivables to a factor,usually a bank, for a fee, and receives a cash in return)
With recourse treated as sale or borrowing. May be required to buy back receivables or make payments

Question 14

Secured borrowing

Answer 14

Transferring receivables as collateral or to receive a loan. Transferee doesn’t have right to sell.

DR. CASH
CR. NOTE PAYABLE

Question 15

Net realizable value (NRV)

Answer 15

Selling price - costs of completion

Question 16

Inventory costs

Answer 16

Purchase returns.
Freight in. (Shipping costs to get inventory to the warehouse)
Sales tax on acquisition
Insurance on transit

EXCLUDED
freight out (selling expense)
Interest on purchase (financing)

Question 17

Carrying amount (PPE)

Answer 17

Historical cost (includes capitalized costs.)
Less accumulate depreciation
Less any impairment losses

Question 18

Non monetary exchanges

WITH commercial substance

Answer 18

Asset acquired will significantly changes cash flows or item is significantly different

Gains/losses recognized in exchange
Treat as if asset was sold for FV

Question 19

Non monetary exchanges

WITHOUT commercial substance

Answer 19

(Asset received in exchange doesn’t really change anything.)

• Loss always recognized, asset @ FV
• if gain but no cash received, no gain recognized: asset @ BV + any cash paid
• if gain and cash received, recognize gain in proportion to cash received: asset @ FV less unrecognized portion of gain
• if cash received to total consideration receive more than 25% then recognize full gain @FV

Question 20

FOB destination

Answer 20

(Free on board) the ownership and risk of loss of the inventory doesn’t change until it reaches its destination (the buyers warehouse)
Seller owns inventory until it reaches buyer