Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

FAR 2014 > NFP Accounting > Flashcards

NFP Accounting Flashcards

1
Q

Which financial statements are required for not - for - profit organizations?

A

Statement of Financial Position

Statement of Activities

Statement of Cash Flows

Statement of Functional Expense (Volunteer Health Organizations Only)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are the major classifications found on a Statement of Financial Position?

A

Similar to Balance Sheet:

Assets
Liabilities
Net Assets
Unrestricted Assets
Permanently Restricted Assets
Temporarily Restricted Assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are the major classifications in a Statement of Activities?

A

Similar to an Income Statement - organization - wide:

Revenues
Expenses - ONLY deducted from Unrestricted Revenues
Gains and Losses
Changes in Net Asset classes
Unrestricted
Permanently Restricted
Temporarily Restricted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the characteristics of a Statement of Cash Flows for not - for - profits? What are the major classifications?

A

Both direct and indirect methods are OK

Operating Activities - Unrestricted Revenues and Unrestricted Expenses

Investing Activities

Financing Activities - Endowments and restricted contributions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Which organizations are required to present a Statement of Functional Expenses?

A

Volunteer Health Organizations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Which statements are required for non - governmental hospitals?

A

Balance Sheet
Statement of Operations
Statement of Changes in Net Assets
Statement of Cash Flows
Financial Statement Notes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Which basis of accounting is used for revenues and net assets?

A

Accrual basis of accounting is used

Only external parties can restrict the use of assets (permanent or temporary)

Assets earmarked internally by management are still classified as unrestricted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are the characteristics of unrestricted assets or revenue?

A

No restrictions or conditions placed on entity in order to use the resources

Note: assets earmarked internally by management are still unrestricted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

When are revenues on contributions recognized?

A

Revenues on contributions are recognized in the year received - not the year the contribution is spent and are recorded at Fair Value on the date received

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

When are services rendered considered contributions?

A

If the organization would have otherwise paid for them

or

They increase the value of a non - monetary asset

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Is hospital charity care revenue?

A

NO.

It is disclosed in the notes to the financial statements only.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

How are unconditional pledges to contribute recorded?

A

Classified as revenue in the current year only - multi - year future contributions fall under Temporarily Restricted.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Which revenues are expenses deducted from?

A

Expenses ONLY deducted from Unrestricted Revenues - not Temporary or Permanently Restricted Revenues/Assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the characteristics of temporarily restricted assets/revenue?

A

Use is restricted to a future time - which could then convert to unrestricted - Class: Temp. Restricted Revenue

Unrestricted contributions promised (including multi - year contributions) - but not yet received are actually restricted by time and are therefore classified as Temporarily Restricted Assets - Multi - year contributions are recorded at the present value of the future contributions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What are the characteristics of an endowment?

A

Use of investment is restricted - but income from investment could be either restricted or unrestricted

Must be under control of receiving entity (Quasi Endowment) in order to be recorded in unrestricted net assets

Otherwise - a memo entry is recorded

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

When is the donation of an art collection recognized as a contribution or asset?

A

Not recognized as assets or contribution revenue if they are held of display or education’ or their sale results in the purchase of similar items

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

When both Temporarily Restricted Assets and Unrestricted Assets are available for use - which assets are used first?

A

Temporarily restricted assets are used before Unrestricted assets.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

How is a refundable advance recorded by a not for profit?

A

Classified as a Liability

Promise to contribute assets pending on certain conditions being met

Becomes unconditional once the possibility that it won’t happen is remote

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

How are investments recorded and valued in not - for - profit accounting?

A

Fair Value is mostly used

Exception - Equity method used when significant influence exists

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

How are scholarships recorded?

A

As a reduction of revenue - netted against college’s tuition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

How is depreciation expense recorded by a not - for - profit?

A

Depreciation expense is allocated proportionately to various functions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What additional statement is required for voluntary health and welfare organizations

A

Statement of functional expenses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

How are assets reported on statement of financial position

A

Balance sheet

Unrestricted, temp restricted, permanently restricted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

How are term and regular endowments recorded

A

Term - temporary restricted

Regular - permanently restricted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
When are contributions reported
When revenue received regardless of donor imposed restrictions
26
Where are expenses deducted from
Only unrestricted revenues
27
What is included in cash flow operating activities
Revenue and expenses that are unrestricted
28
What financial statements are required for NFP
Statement of financial position Statement of activities Statement of cash flows
29
What's included in NFP statement of cash flows
Operating Investing Financing
30
How are gifts of long lived assets with no restriction recorded
Class as unrestricted if accounting policy allows
31
How are contributions received from outside donors for use in research
Report and temp restricted assets
32
How is a multitrack pledge recorded
Report at PV in temporary restricted revenue
33
How is restricted cash inflow for acquisition of property treated on statement of cash flows
Include in financing activities
34
What is the general purpose of NFP FS
Focus on basic info of the organization to enhance relevance, understandability, and comparability
35
When is a liability recorded by an entity
When entity acts as an agent or trustee
36
How should entity record works of art
Don't recognize contributions if art held for public exhibition and if sold proceeds used to acquire other art
37
Where are change in assets required to be reported
Statement of activities
38
Where are expenses according to function presented
On FS or in notes to FS
39
How is a quasi endorsement recorded
As unrestricted asset
40
How is conditional promise to contribute recorded
Refundable advance - liability
41
How is a permanent endowment and investment interest recorded on statement of cash flows
Both as financing activity if investment interest used to purchase PPE
42
What are functional and natural expenses and when are they required for health and welfare organizations
Functional - program and supporting Natural - salary expense , depreciation expense Both required
43
When are donations of services recognized
When services create or enhance no financial asset When services require special skill set that would have to be paid for
44
When is a conditional promise considered unconditional
When possibility that condition will not be met is remote
45
How is contribution revenue calculated
Amount given above market revenue
46
What triggers a reclassification of assets
Expiration of donor imposed restrictions ( time or purpose )
47
How does the expiration of imposed conditions affect asset
Only increases asset no reclassification
48
How are investments recognized on NFP books
FV is no significant influence Equity method if significant influence
49
When to record contribution as a liability
Donor doesn't grant recipient variance power Recipient org and beneficiary are not financially interrelated
50
How is a contribution treated when recipient and beneficiary interrelated and resources must be used to benefit beneficiary
Record asset and liability
51
What is variance power
Ability to redirect resources transfer to it
52
What is a split interest agreement
Donor makes initial gift to trust or directly to NFP and NFP is not sole beneficiary
53
When are joint costs of informational materials recorded
As fundraising expense unless an appeal is designed to motivate audience to action other than providing financial support
54
What are considered capital additions
Nonexpendable gifts restricted to endowment, plant, loan funds and legally restricted investment income On investments such as funds
55
How are gifts in kind treated
Agency transactions or contributions depending on extent of discretion
56
What is an agency transaction
Asset for which organization has too little discretion
57
What FS are required for hospital
Balance sheet Statement of operations Statement of change in net assets Statement if cash flows
58
Calculate net patient service revenue
Gross patient service revenue less contractual obligation with 3rd party payor less allowance for discounts to hospital employees
59
How is a voluntary health and welfare organization classified
As NFP, nonbusiness not hospital
60
What items are reported separate from performance indicator
``` Extraordinary items Equity transfers Receipt of restricted contributions Contribution of long lived assets Restricted investment returns Unrealized gain or loss on investment a ```
61
How are expenses prepared for health care org
Using natural or functional classification
62
What is the performance indicator and give example
Report of results of operations Excess revenue over expenses
63
How is charity care recorded
Not recorded on FS except in notes
64
How are payments of future services at retirement communities recorded
Nonrefundable advance fees as liability
65
What is recorded in other revenue gain and loss for health care org
Income from services other than providing health care service or coverage to patients
66
In a health care org at what value are donated noncash assets recorded
Fair value
67
On hospital FS how are change in assets displayed
Statement of change in net assets - reports change in hospitals unrestricted, temp, perm restricted assets Statement of operations - discloses only change in unrestricted net assets Balance sheet - discloses amount of unrestricted , temp restricted, perm restricted assets at certain date

FAR 2014 (19 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions