Non-Profit/Governmental Flashcards
What are the required statements in a not-for-profit organization
- Statement of financial position
- Statement of activities
- Statement of cash flows
What activities are considered “supporting activities” in a not-for-profit organization?
Supporting activities include:
- fundraising
- administrative services
- membership development expenses
What are some examples of measurable performance-based barriers or other barriers that could indicate the existence of a condition?
- Matching
- Cost eligibility requirements
Which fund focuses on the use of current financial resources and uses the modified accrual basis of accounting?
Governmental funds use the current financial resources measurement focus and modified accrual basis of accounting
Proprietary and fiduciary funds use the economic resources measurement focus and accrual basis of accounting
What are the funds types for a Governmental Fund?
GRaSPP
- General Fund
- Special Revenue Funds and
- Debt Service Funds
- Capital Projects Funds
- Permanent Fund
What are the fund types for Proprietary Funds?
SE
- Internal Service Funds
- Enterprise Funds
What are the fund types for a Fiduciary Fund?
C IP POE
- Custodial Funds
- Investment Trust Funds
- Private Purpose Trust Funds
- Pension (and Other Employee Benefit) Trust Funds
Under the “modified accrual basis of accounting” for a governmental unit, when should revenues be recognized?
Under the modified accrual basis of accounting, revenues should be recognized when the “become available and measurable”
How do Special Revenue Funds and Permanent Funds differ when expending benefits from a trust
Special Revenue Funds are fully expendable, meaning both the earnings from the investment and the principal may be used for expenditures
Permanent Funds are legally restricted to the extent that income and NOT principal may be used for the restricted purpose
What are some examples of the following non-exchange transactions?
- Government-mandated non-exchange transactions
- Derived tax revenues
- Imposed non-exchange revenues
- Voluntary non-exchange revenues
- Collection of revenues for certain activities, such as an environmental clean up, federal grant
- Collection of taxes that are “derived” from exchange transactions, such as sales taxes (on sales) and income taxes (on income)
- Property taxes and fines
- Contributions and grants
What are the basic criteria used to determine the reporting entity for a governmental unit?
The reporting unit is the oversight and all related component units. The basic criteria include:
- financial interdependency
- selection of governing authority
- designation of management
- ability of significantly influence operations
- accountability of fiscal matters
What are the acceptable methods to present component units in combined financial statements if the government is the primary reporting entity?
Component units may be presented using either discrete or blended method with the financial statements of the primary reporting entity
What is included in the introductory section of a government’s annual financial report?
The introductory section of a government’s annual comprehensive financial report would include:
- letter of transmittal
- organizational chart
- list of principal officers
What activities are included in the statement of cash flows for a governmental, not-for-profit entity in the noncapital financing activity section?
- Proceeds or payments related to borrowing NOT attributable to the acquisition, construction or improvement of capital assets
- Cash receipts related to grants or subsidies NOT attributable to capital purposes
- Property taxes NOT designated for capital purposes
- Cash paid to other funds (other than interfund services)
How do you reconcile the measurement focus differences between the Governmental Funds B/S to the Government-wide Statement of Net Position
+ Capital assets net of
Less: Accumulated Depreciation
Less: Non-current liabilities
+ Service (internal service fund) net position
Reconciliation of Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balance to the Government-wide Statement of Activities
Income Statement reconciliation
CPAS RIDES (IT)
- Net change in fund balance
- Capital outlay
- Principal payments on non-current debt
- Asset disposals (net book value)
- Sources (other financing sources - debt proceeds)
- Revenue (measurable but unavailable)
- Interest expense (accrued)
- Depreciation expense
- Internal service fund net revenue
- +/- Interfund Transfers
- = Change in net position of governmental activities
What statements are found on the Governmental Fund Financial Statements?
- Balance Sheet
- Assets + Deferred Outflows
- Liabilities + Deferred Inflows
- Fund Balance
- Statement of Revenues, Expenditures, and Changes in Fund Balance
- other financing sources
- proceeds from debt and interfund transfers
- other financing uses
- other financing sources
What statements are included in the Proprietary Fund Financial Statements?
- Statement of Net Position
- assets + deferred outflows
- liabilities + deferred inflows
- net position
- Statement of Revenues, Expenses, and Changes in Fund Net Position
- Statement of Cash Flows
What statements are included in the Fiduciary Fund Financial Statements?
- Statement of Fiduciary Net Position
- assets + deferred outflows
- liabilities + deferred inflows
- net position
- Statement of Changes in Fiduciary Net Position
What conditions must be met in ordered for a NFP not to classify a contribution as revenue?
Conditional contributions are not recognized as revenue if there are BOTH barriers that indicate a condition AND the donor has a right of return.
Barriers that may indicate a condition include:
- Specified levels of service
- Specific outputs or outcomes
- Matching
- Outside events
How are contributions of unrestricted revenue that is later designated by board members to purchase long-lived assets classified in the statement of cash flows in a NFP organization?
Cash flows from operating activities
How are good faith deposits associated with conditional promises recorded as for a NFP organization?
Good faith deposits with conditional promises are recorded as a liability titled “refundable advance”
When are conditional pledges recognized as revenue in a NFP organization?
NEVER… only unconditional pledges and receipts are recognized as revenue. Conditional receipts are recognized as a liability
Cash received with donor-imposed restrictions that limit its use to long-term assets is displayed as what type of activity in the statement of cash flows for a NFP organization?
If the contribution is restricted to the use of long-lived assets, the amount would be a financing activity
What are “other financing sources” and what are some examples?
Other financing sources are financial inflows besides revenues.
They include transfers in from other funds and proceeds of long-term borrowings
How are funds available for use determined in a particular fund?
Funds available for use = Appropriations - Encumbrances - Expenditures
