Government Funds And NFP Flashcards
What are permanent funds?
A fund that’s restricted to the use of earnings. Not principal
What is a special revenue fund?
A fund where both principal and interest can be used.
T or F. Revenues and expenses from annual fundraising campaigns should NOT be netted in the stmt of activities.
True
What are the 2 classifications for expenses?
Functional and Natural
Examples of functional expenses
Program services and supporting activities
Examples of natural expenses
Salaries
Rent
Interest
Depreciation
When are donated (contributions) services recognized?
(3 criteria points)
When they: (1) create or enhance non-financial assets, or (2) require specialized skills, are provided by individuals possessing those skills, 3) and would typically need to be purchased if not provided by donation.
Fun fact
An NFP MAY NOT choose to capitalize PART of its collection.
Instead, It can choose to not capitalize anything, capitalize it all, or capitalize only items given after a certain date.
But capitalizing part is not an option
When does a NFP recognize a conditional promise to give?
When conditions are met. (A condition is a barrier that must be overcome before the recipient can have the assets)
True or false. Fundraising, management and general, and membership development are supporting activities expenses of an NFP.
True
In governmental accounting a fund is what two things?
The basic accounting unit
And
Used to assist in ensuring physical compliance.
What fund uses the modified accrual basis of accounting?
Government funds
What is the measurement focus of government funds?
Current financial resources and uses modified accrual basis of accounting
Which statements use the accrual basis of accounting? And what is there measurement focus?
Government wide
Proprietary fund
Fiduciary fund
Measurement focus is: economic resources
What are the 5 types of government funds?
General
Special revenue
Capital projects funds
Debt Service funds
Permanent funds
What are the 2 types of Proprietary funds?
Enterprise funds( ie services paid for by others like utilities)
Internal service funds (activities performed for the benefit of other agencies, like an IT department)
What are the 4 types of fiduciary funds?
Pension funds
Investment trust funds
Private purpose funds
Custodial funds
What are the 3 elements of an NFP statement of financial position?
Assets, liabilities, and net assets
What 6 amounts must be presented on the statement of financial position?
Total assets
Total liabilities
Total net assets w/ donor restrictions
Total net assets w/o donor restrictions
Total net assets
Total liabilities and net assets
What are the elements of the statement of activities?
Revenues
Expenses
Gains
Losses
What are the 3 General purpose statements of an NFP?
Statement of financial position
Statement of activities
Statement of cashflows
True or false. A quasi endowment is a board designated fund.
True
Fun fact
Works of art are not capitalized only cost of major preservation or restoration efforts are capitalized and depreciated
What are cashflows from operating activities for an NFP?
Receipts and contributions without donor restrictions
What are cashflows from financing activities?
Receipts of resources that are donor restricted for long term purposes.
What are cashflows from investing activities?
Cashflows from purchases, sales, and insurance recoveries of unrecognized, non capitalized collection items.
Fun fact
A barrier is a donor imposed condition that must be overcome before a transfer of assets. If not overcome the contributor is entitled to a right of return or the promisor a right of release.
What is variance power?
The unilateral power to redirect the use of assets to another beneficiary.
Fun fact
If a donor does not grant variance power to the NFP. The asset is recognized as a dr to asset and cr to liability.
What is a donor restricted endowment fund?
A fund created by a donor stipulation requiring a gift to be invested for a specific time period or in perpetuity.
This does not include board designated endowment funds.
Fun fact
When an NFP is awarded a contribution with donor restrictions, it is classified as net assets with donor restrictions. Once the purpose is fulfilled, it’s reclassified as a decrease in net assets with donor restrictions and increase in net assets without donor restrictions. Then when the scholarship is awarded, net assets without donor restriction is decreased.
Fun fact
Liabilities are not accrued for employees vacation unless the rights are vested.
Examples of natural expenses for an NFP
Salaries, rent, electricity, interest, awards and grants to others, supplies, and professional fees.
Fun fact
If a recipient has variance power the FV of an asset that is transferred is recognized as revenue.
Fun fact
NFPs must expense all start up and organization cost
