Non Profit

Question 1

Establishment of an Endowment

Answer 1

recognize restricted contribution revenue. The NPO includes an asset in its balance sheet. When a beneficiary has an unconditional right to specific cash flows from a trust, the beneficiary interest is measured and subsequently remeasured at fair value, using a valuation technique

Question 2

Reporting of Outstanding Encumbrances

Answer 2

equity section of the balance sheet.

Question 3

Required Financial Statements

Answer 3

a Statement of Financial Position, a Statement of Activities, and a Statement of Cash Flows.

Question 4

Pledge Recording

Answer 4

in the period they are made, net of an allowance for uncollectible accounts.

Question 5

Control over Auxiliary

Answer 5

disclose the assets because it controls the guild through contracts or other legal documents that provide the authority to direct the guild’s activities

Question 6

No Control over Auxiliary

Answer 6

not disclosed

Question 7

Residual Interest

Answer 7

net assets . Net assets - residual interest in the assets of the entity that remains after reducing its liabilities.

Question 8

Endowment Funds

Answer 8

long-term assets.

Question 9

Plant Funds Group for Colleges and Universities

Answer 9

four subgroups: (1) unexpended plant funds, (2) funds for renewals and replacements, (3) funds for retirement of indebtedness, and (4) investment in plant.

Question 10

Healthcare Entity Funds

Answer 10

two categories of funds: (1) the general funds and (2) the donor-restricted funds. The general fund is used to account for all assets and liabilities that are not required to be accounted for in a donor-restricted fund.

Question 11

College Loan Funds Group

Answer 11

account for loans to students, faculty, and staff (and of resources available for such purposes).

Question 12

College Plant Funds

Answer 12

The asset accounts contain the carrying amounts of the institution’s fixed assets.

Question 13

Recognition of Restricted Revenue

Answer 13

Donations with a donor’s specified purpose must be recognized in the period of receipt

Question 14

Two Types of Nonprofit Expenses

Answer 14

(1) program services and (2) supporting services. Program services are related directly to the primary missions of the nonprofit organization. Supporting services do not relate to the primary missions of the nonprofit organization and include such costs as management and general administration, membership development, and fund-raising.

Question 15

Management and General Administration Costs

Answer 15

include such costs as board meetings, business management, record keeping, budgeting, accounting, and overall direction and leadership.

Question 16

Unrestricted Cash Contributions

Answer 16

reported as an inflow in the operating activities section of the statement of cash flows unless there is a restriction that is donor-imposed.

Question 17

Contributions to Building Fund

Answer 17

included as support in the statement of activities of a voluntary health and welfare organization.

Question 18

Statement of Activities: Types of Classifications

Answer 18

provide information about expenses reported by their functional classification such as major classes of program services and supporting activities. VHWOs shall report that information as well as information about expenses by their natural classification in a separate financial statement.

Question 19

Joint Costs

Answer 19

reported as fundraising expenses unless it can be demonstrated that a program or management
and general function has been conducted in conjunction with the appeal for funds.

Question 20

Functional Classification of Expenses

Answer 20

Functional Classification of Expenses: Program Services (further the mission of the organization - emergency relief, research, community services, public health, and education). Supporting Services (secondary to the mission) Fundraising expenses and G&A expenses.

Question 21

Current Funds Revenues

Answer 21

(1) all unrestricted gifts and other unrestricted resources earned during the reporting period and (2) restricted current funds to the extent that such funds were expended for current operating purposes. Additionally, tuition remissions or exemptions should be assessed and reported as revenue even though there is no intention of collecting from the student.

Question 22

Program Services

Answer 22

related directly to the primary missions of the nonprofit organization.

Question 23

Support Services

Answer 23

do not relate to the primary missions of the nonprofit organization and include such costs as management and general administration, membership development, and fund-raising.

Question 24

Purpose of Statement of Activities

Answer 24

to demonstrate how the organization’s resources are used in providing various programs and services.

Question 25

Other Revenues of Health Care Entity

Answer 25

the usual day-to-day revenues that are not derived from patient care and services, and generally, include (1) proceeds
from the sale of cafeteria meals, (2) revenue from educational programs, and (3) revenues from miscellaneous sources

Question 26

Depreciation

Answer 26

All nongovernmental nonprofit organizations must record depreciation on most long-lived tangible assets.

Question 27

Statement of Activities

Answer 27

includes the revenues, expenses and the net assets released from restriction. Thus, any net asset reclassification (from net asset with donor restrictions to net asset without donor restrictions) is reflected in the statement of activities.

Question 28

Expenses

Answer 28

reported only in the net assets without donor restrictions column.

Question 29

Nonprofit Cash Flows

Answer 29

follow the FASB format of statement of cash flows which does not include a capital financing activities section.

Question 30

Financing Activities

Answer 30

cash flows from financing activities is expanded to include certain donor-restricted cash that must be used for long-term purposes.

Question 31

Financing Activities

Answer 31

include proceeds from borrowing or issuing debt and principal repayments, but also include transactions that are unique to NFPs such as receipt of investment income restricted for reinvestment, contributions restricted for long-term investment and contributions restricted for acquisition of plan and equipment.

Question 32

Unrestricted Cash Contributions

Answer 32

included in operating activities.

Question 33

Investing Activities

Answer 33

include the sale and purchase of investments and PP&E.

Question 34

Minimum Nonprofit Financial Statements

Answer 34

a statement of financial position, a statement of activities, and a statement of cash flows.