Nonprofit Accounting

Question 1

What are the three basic statements for NPOs?

Answer 1

Statement of Financial Position
Statement of Activities
Statement of Cash Flows

Question 2

What are the parts of the Statement of Cash Flows for NPO?

Answer 2

1. Operating
   Unrestricted and temporary restricted
   Includes interest income/expense, dividend income
2. Investing
   Includes investments acquired and sold
   Includes PPE disposal
3. Financing
   Restricted
   Includes money received for L/T purpose

Question 3

What statements are required for VHWO?

Answer 3

3 required statements for NPO PLUS
Statement of Functional Expenses

Includes program expenses (furthers mission) and support services (secondary - fund raising, membership development)

Question 4

When can NPO not report contributions of property as revenue?

Answer 4

When NPO receives donation of art, artifacts, or antiques that intends to:

1. use for display or research purposes only
2. care for themselves, and
3. use sale proceeds to reinvest in other collectibles

Question 5

When are donations of services recorded as revenue for NPO?

Answer 5

If the services either:

1. create or enhance a non-financial asset, OR
2. require specialized skills

Question 6

When are conditional promises recorded as revenue for NPO?

Answer 6

When either:

1. conditions have been substantially met, OR
2. there is a remote likelihood that conditions will not be met

Question 7

When is money received for others considered revenue for NPO?

Answer 7

When either:
1. they have power to redirect money, OR
2. beneficiary is financially related
If not, recorded as liability

Question 8

What are the four statements required for Health Care Organization?

Answer 8

Balance Sheet
Statement of Changes in Net Assets
Statement of Cash Flows
Statement of Operations/Activities - includes performance indicator

Question 9

What are the parts of the Statement of Operations for Health Care Organization?

Answer 9

PP - No One
Patient service revenue - gross amount
- Provision for contractual adjustment - no charity or generally bad debt
= Net patient service revenues
+ Other operating revenues - gift shop
- Operating expenses - bad debt
+ Non operating revenues - interest/dividend income
= Excess of Rev/Gains over Exp/Losses (Performance Indicator)