NFP Accounting

Question 1

What are the 4 types of NPOs?

Answer 1

1. Voluntary health and welfare orgs
2. Health care orgs
3. Colleges and Universities
4. Other NPOs

Question 2

VHWOs are characterized as those that provide free or low cost services with financial support derived from voluntary ______ and______.

Answer 2

Contributions and grants, resource providers are not the primary beneficiary of the services

Question 3

ONPOs essentially benefit their own members. TF

Answer 3

True

Question 4

NPOS follow GASB or FASB?

Answer 4

In general, FASB

Question 5

Can governments can also run healthcare and college/university NPOs? If so, which org sets the rules?

Answer 5

Yes, GASB

Question 6

FASB sets the standards for which types of entities?

Answer 6

For profit and Not for profit

Question 7

GASB sets the standards for which types of entities?

Answer 7

State and Local government entities

Question 8

NPOs use modified accrual accounting with a current financial resources measurement focus when reporting. TF

Answer 8

False, full accrual, economic resources focus

Question 9

The purpose of NFP financial reporting is to all external users to assess: stewardship and ______, as well as services and _____.

Answer 9

performance, sustainability

Question 10

What are the 3 types of NPO net asset categories?

Answer 10

1. Unrestricted
2. Temporarily Restricted
3. Permanently Restricted

Question 11

The four required statements are:

Answer 11

1. Statement of Financial Position
2. Statement of Activities
3. Statement of Cash flows
4. Statement of Functional expenses (VHWOs only)

Question 12

Expenses are only reported in the unrestricted net assets category? TF

Answer 12

True

Question 13

What are the two categories of expenses?

Answer 13

Program services, and supporting services

Question 14

Gains and losses are related to the main activities of the NFP. TF

Answer 14

False

Question 15

Revenues are reported only for unrestricted net assets. TF

Answer 15

False, the are reported for all asset catergories

Question 16

In good practice ____ of revenues should go to programs. .

Answer 16

85%

Question 17

Fund raising expenses are classified as a (program/supporting services) expense?

Answer 17

Supporting services

Question 18

The statement of position includes what financial categories?

Answer 18

Assets, Liabilities, and net assets

Question 19

Management and general expenses are a type of _____ expense.

Answer 19

Supporting services

Question 20

A contribution for the construction of a new building would be considered a cash flow from investing activities. TF

Answer 20

False, financing activities. Any contributions for long-term purposes falls under financing.

Question 21

Exchange transactions are reported under Unrestricted Net Assets in the SoA. TF

Answer 21

True

Question 22

Debt proceeds are reported as cash inflows under ______ activities.

Answer 22

Financing

Question 23

Purchase of capital assets are reported as cash ______ from _______ activities.

Answer 23

outflow, investing

Question 24

What is a regular endowment?

Answer 24

A permanently restricted net asset

Question 25

Term endowments are donated by an external party to be invested and that can be ______________.

Answer 25

Spent after a passage of time

Question 26

Quasi endowments are set aside by the NFP and are accounted for as an unrestricted net asset. TF

Answer 26

True

Question 27

In regards to endowments, which two questions are to be answered?

Answer 27

Who donated it, and must the principal remain intact?

Question 28

Gains and losses on investments purchased with permanently restricted net assets should be reported in the SoA as increases and decreases in unrestricted net assets. TF

Answer 28

True

Question 29

How should NFPs report investments in debt securities?

Answer 29

Fair Value (Market Price)

Question 30

Donated securities are reported at their donated FMV on the end of year financial statements? TF

Answer 30

False, mark to market at year end

Question 31

If there is an outstanding condition to a contribution, revenue cannot be recognized until that condition is met. TF

Answer 31

True

Question 32

To be considered contribution revenue, the contribution must be (reciprocal, non reciprocal)

Answer 32

Non reciprocal

Question 33

Contributions must be voluntarily made to meet the definition. TF

Answer 33

True

Question 34

What are the 3 main types of contributions?

Answer 34

Donated assets
Donated services
Pledges

Question 35

Donanted assets are recorded at ___ value.

Answer 35

Fair

Question 36

Implied time restrictions are in reference to what type of donation?

Answer 36

Deprieciable property

Question 37

Pledges are recognized. TF

Answer 37

True, and net of uncollectibles

Question 38

A contribution is restricted until year 2. In year 1 how should this contribution be recorded?

Answer 38

As year 1 income. No footnote required.

Question 39

For donated services to be considered as contribution revenue the services must require special skills that would likely of had to been purchased if not donated. TF

Answer 39

True

Question 40

Pledges designated for use during the current year, with no other factors involved, are classified as what type of net asset?

Answer 40

Unrestricted

Question 41

Contributions with a matching stipulation are to be classified as temporarily unrestricted support. TF

Answer 41

False, as a refundable advance.

Question 42

Collections (such as art) must be capitalized and presented on the statement of financial position. TF

Answer 42

False, they do not need to be capitalized

Question 43

As long as the contributions have been pledged, the receipt of cash does not impact revenue recognition. TF

Answer 43

True

Question 44

When gifts are given in connection with a contribution, the transaction is treated as an ______ transaction, and the value of goods exchanged is ______ from the total amount received.

Answer 44

Exchange, deducted