NFP

Question 1

Pledge receivable in NFP is to be recorded at which value?

Answer 1

At Present Value

Question 2

Investment in Debt securities is recorded at

Answer 2

Quoted Market Prices

Question 3

True or False: Endowment is permanent which means principal cannot be spent. (Donor restricted)

Answer 3

True

Question 4

True or False: ASC 958-650-30-2 requires donated securities to be initially recorded at FV on the date of the gift and to be reported at their market value at the financial reporting date (At the end of the year)

Answer 4

True

Question 5

Example of refundable advance or LIABILITY = Matching funds

Answer 5

The donation to Gridiron is conditional upon the university raising MATCHING funds within 12 months.

Question 6

Example of a split interest arrangement

Answer 6

Charitable remainder trust

Question 7

What are Functional expense categories or supporting services?

Answer 7

1. Program services
2. Management and General
3. Fundraising

Question 8

Cash flow from operating activity section of the cash flow statement using the indirect method begins with _______________

Answer 8

Total changes in net assets

Question 9

Credit loss expense is ______________from calculation of hospital revenue on statement of operations of the hospital.

Answer 9

EXCLUDED

Question 10

Quasi-endowment means restriction by internal board or trustee. Does that count as restricted by donor in statement of activities?

Answer 10

No

Question 11

Operating Activity - Non restricted, Financing Activity - _______________

Answer 11

Restricted

Question 12

If prepaid taxes have been debited to estimated tax payments, they should NOT be included in the calc of

Answer 12

Current Assets

Question 13

Contributions receivable is conditional

Answer 13

True

Question 14

When Category is not provided - Expenses (e.g. Depreciation) are deducted from

Answer 14

Assets or Revenues WITHOUT donor’s restrictions (Decrease in net assets) (Expenses are always classified as without donor restriction for NFP)

Question 15

What does contingent mean in terms of donation?

Answer 15

It means after occurrence of a certain condition.

Question 16

Contributed legal or donated services which NFP would have otherwise purchased should be reported as ______________

Answer 16

Contribution WITHOUT donor restriction

Question 17

Promise to contribute $500,000 in Year 3 from a supporter who has made similar contributions in prior periods is an example of _____________

Answer 17

Pledges that aren’t due to be paid until a future period are recorded as time-restricted donations. REVENUES WITH DONOR RESTRICTIONS

Question 18

Appropriate characterization of the net assets of a nongovernmental NFP org is ______

Answer 18

Residual Interest

Question 19

Supporting services

Answer 19

Management and general, Fundraising and membership development

Question 20

NFP - Using the indirect method, the cash flow statement would begin with _______

Answer 20

total changes in net assets

Question 21

Quasi-endowment funds are established by the governing board of an organization using net assets without donor restrictions. The governing board decides to set funds aside as permanent investments, never to be spent. Therefore, the assets in the quasi endowment would be included in the net assets without donor restriction category.

Answer 21

Quasi endowments do not create real restrictions.

Question 22

GAAP requires the current expected credit loss (CECL) model to be used when accounting for credit loss (i.e., bad debts). Rather than reducing the AR directly, expected credit losses accumulate in the allowance of credit losses, a contra (ie valuation) account. The allowance is adjusted on each reporting date, so the net carrying value of the AR equals what management expects to collect due to credit risk.

Answer 22

The CECL model requires accounts receivable to be written off (partially or fully) during the period in which the accounts are determined to be uncollectible (matching principle). The entry to write off a specific uncollectible account.

The entry to write off a specific uncollectible account:
1. is recorded with a debit (decrease) to the allowance for credit losses and a credit (decrease) to AR

2. Has no effect on net income because only balance sheet accounts are used
3. has no effect on total assets because the debit and credit to the asset and contra-asset accounts are offsetting.

Question 23

Net Asset Reclassifications of a NFP would be reported on _______________

Answer 23

Statement of Activities

Question 24

NFP Financial Statements

Answer 24

Statement of FInancial Position
Statement of Activities
Statement of Cash Flows
Statement of Functional Expenses (this may be presented as a separate statement, on the statement of Activities or within the notes to the F/S)

Question 25

When museum intends to sell the artwork and the proceeds are not going to be reinvested in collectible items or used for the care of existing collections:

Answer 25

Asset - Art for resale Dr.
Contribution revenue without
restrictions Cr.