Government Funds And NFP

Question 1

What are permanent funds?

Answer 1

A fund that’s restricted to the use of earnings. Not principal

Question 2

What is a special revenue fund?

Answer 2

A fund where both principal and interest can be used.

Question 3

T or F. Revenues and expenses from annual fundraising campaigns should NOT be netted in the stmt of activities.

Answer 3

True

Question 4

What are the 2 classifications for expenses?

Answer 4

Functional and Natural

Question 5

Examples of functional expenses

Answer 5

Program services and supporting activities

Question 6

Examples of natural expenses

Answer 6

Salaries
Rent
Interest
Depreciation

Question 7

When are donated (contributions) services recognized?
(3 criteria points)

Answer 7

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.

Question 8

Fun fact

Answer 8

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

Question 9

When does a NFP recognize a conditional promise to give?

Answer 9

When conditions are met. (A condition is a barrier that must be overcome before the recipient can have the assets)

Question 10

True or false. Fundraising, management and general, and membership development are supporting activities expenses of an NFP.

Answer 10

True

Question 11

In governmental accounting a fund is what two things?

Answer 11

The basic accounting unit
And
Used to assist in ensuring physical compliance.

Question 12

What fund uses the modified accrual basis of accounting?

Answer 12

Government funds

Question 13

What is the measurement focus of government funds?

Answer 13

Current financial resources and uses modified accrual basis of accounting

Question 14

Which statements use the accrual basis of accounting? And what is there measurement focus?

Answer 14

Government wide
Proprietary fund
Fiduciary fund
Measurement focus is: economic resources

Question 15

What are the 5 types of government funds?

Answer 15

General
Special revenue
Capital projects funds
Debt Service funds
Permanent funds

Question 16

What are the 2 types of Proprietary funds?

Answer 16

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)

Question 17

What are the 4 types of fiduciary funds?

Answer 17

Pension funds
Investment trust funds
Private purpose funds
Custodial funds

Question 18

What are the 3 elements of an NFP statement of financial position?

Answer 18

Assets, liabilities, and net assets

Question 19

What 6 amounts must be presented on the statement of financial position?

Answer 19

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

Question 20

What are the elements of the statement of activities?

Answer 20

Revenues
Expenses
Gains
Losses

Question 21

What are the 3 General purpose statements of an NFP?

Answer 21

Statement of financial position
Statement of activities
Statement of cashflows

Question 22

True or false. A quasi endowment is a board designated fund.

Answer 22

True

Question 23

Fun fact

Answer 23

Works of art are not capitalized only cost of major preservation or restoration efforts are capitalized and depreciated

Question 24

What are cashflows from operating activities for an NFP?

Answer 24

Receipts and contributions without donor restrictions

Question 25

What are cashflows from financing activities?

Answer 25

Receipts of resources that are donor restricted for long term purposes.

Question 26

What are cashflows from investing activities?

Answer 26

Cashflows from purchases, sales, and insurance recoveries of unrecognized, non capitalized collection items.

Question 27

Fun fact

Answer 27

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.

Question 28

What is variance power?

Answer 28

The unilateral power to redirect the use of assets to another beneficiary.

Question 29

Fun fact

Answer 29

If a donor does not grant variance power to the NFP. The asset is recognized as a dr to asset and cr to liability.

Question 30

What is a donor restricted endowment fund?

Answer 30

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.

Question 31

Fun fact

Answer 31

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.

Question 32

Fun fact

Answer 32

Liabilities are not accrued for employees vacation unless the rights are vested.

Question 33

Examples of natural expenses for an NFP

Answer 33

Salaries, rent, electricity, interest, awards and grants to others, supplies, and professional fees.

Question 34

Fun fact

Answer 34

If a recipient has variance power the FV of an asset that is transferred is recognized as revenue.

Question 35

Fun fact

Answer 35

NFPs must expense all start up and organization cost