NFP NGO Flashcards

1
Q

COMPONENTS of Statement of Financial position In NG NFP

A
  1. Assets
  2. Liabilities
  3. Net Assets not retained earnings.
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2
Q

Impact of DONATION received with no donor restrictions and without Donor restrictions on statement of cash flow.

A

It is shown as income from operating activities as there are no restrictions. If there are restrictions for acquiring constructions, improving long term assets or endowment fund then it Will be shown as income from financing activities. Cash donations are usually recognized as revenue in income statement.

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3
Q

Contribution with donor restrictions and no donor restriction.. Impact of future cash discounting using PV.

A

NO DONOR restriction straight upright payment will be recorded as net assets.
With donor restrictions Net asset is discounted to PV using the PV Factor of ordinary annuity.

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4
Q

Belle, a nongovernmental not-for-profit organization, received funds during its annual campaign that were specifically pledged by the donor to another nongovernmental not- for-profit health organization. How should Belle record these funds?

A

Since these funds are pledged to another organization, it would be an increase in assets and an increase in liabilities, for a net effect of zero, since Belle can’t use the funds.

If Belle had variance power, meaning the power to redirect the funds to another organization, then it would be an increase in assets and revenue.

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5
Q

Donation with donor restriction. Received 100000 to fund scholarship for medical students. The donor stipulated that only interest earned during y2 on the contribution would be used for scholarships which is 15000. How much to show as Net assets with donor restrictions in y2.

A

Both endowment plus interest earned are restricted by the donor so 115000 would be classified as net assets with donor restrictions

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6
Q

Donation received 20,00,000 - by a NG NFP from a donor with restrictions to make an endowment fund that would be used to support a specific program. In the 2nd year, An investment earned from purchase of a gift includes 40000 during the first year. At the end of first year FV of the investment was 20,10,000. What is the net effect on net assets with donor restrictions.

A

The question is asking about Y1, so both the fair value of endowment 20,10,000 and 40K income 2050000 will be included in the net assets with a donor restriction.

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7
Q

How to report functional exp by NFP

A

NFP Reports expenses by its 1. Nature and 2 function on the face of the stmt of activities, a seperate statement or in the notes to FS.

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8
Q

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At which of the following amounts should a nongovernmental not-for-profit organization report investments in debt securities?

A

Nonprofits don’t use debt investment classifications such as available-for-sale or held-to-maturity. Everything is valued at market price (fair value).

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9
Q

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How should a nongovernmental not-for-profit organization report investments in its financial statements?

A

Fair value with gains and losses reported in the statement of activities

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10
Q

On January 1, Read, a nongovernmental not-for-profit organization, received $20,000 and an unconditional pledge of $20,000 for each of the next four calendar years to be paid on the first day of each year. The present value of an ordinary annuity for four years at a constant interest rate of 8% is 3.3. What amount of net assets with a donor restriction is reported in the year the pledge was received?

A

The $20,000 received upfront is classified as a contribution with no donor restrictions.

The $20,000 to be received for each of the next 4 years will be net assets with a donor restriction, and it needs to be discounted using the P.V factor of 3.3.

$20,000 x 3.3 = $66,000

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11
Q

Ragg coalition an NG NFP received a gift of treasury bills. Cost to the donor - 20k plus additional 500 for brokerage fees that were paid by donor prior to the transfer of the Treasury bills. The TBills had a FV of 15000 at the time of transfer. At what amount shout ragg record the TB in the FS

A

15k. NFP record donations at the FV not the original cost to the donor.

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