Not for profit Accounting

Question 1

Cash flows

Answer 1

Operating-unrestricted and temporarily restricted

Financing if it is unrestricted

Question 2

All Expenses

Answer 2

Are UNA

Question 3

Financial statements

Answer 3

Statement of Financial position
Assets= Liablities+ Net assets
Statement of activities
Statement of cash flows

Question 4

VHWO- Statement of functional expense

Answer 4

Statement of activities

Question 5

Performance indicator

Answer 5

PP No One

Question 6

When expenses are paid out of UNA

Answer 6

When expenses are paid out of restricted net assets, an additional reporting requirement applies. In the subsection of revenues titled “net assets released from restrictions,” the amount of the expense is reported as both an increase in unrestricted revenues and a decrease in restricted revenues.

Question 7

VHE classification of expenses

Answer 7

VHWEs report information about expenses by functional classification and natural classification (salaries, rent, interest, depreciation, etc.) in a matrix format in a separate statement of functional expenses. Other NFPs are encouraged but not required to provide information about expenses by natural classification.

Question 8

On the statement of activities of an NFP, intermediate designations such as “excess of operating revenues over expenses” are prohibited because they might mislead users.

Answer 8

Certain other categories of changes in net assets may be useful. Such designations as (1) operating and nonoperating, (2) recurring and nonrecurring, (3) earned and unearned, and (4) expendable or nonexpendable may be used. An intermediate measure of operations, such as “excess of operating revenues over expenses,” may be used only in a statement that reports the change in unrestricted net assets.

Question 9

An unconditional promise to give in 6 months may be reported by the donee at net realizable value.

Answer 9

For an unconditional promise to give, the present value of estimated future cash flows is an appropriate measure of fair value. However, unconditional promises to give, expected to be collected in less than 1 year, may be recognized at net realizable value.

Question 10

what are fund raising expenses of NFP

Answer 10

The major functional classes of expenses for an NFP are program services and supporting activities. Supporting activities include (1) management and general, (2) fundraising, and (3) membership-development activities. Fundraising expenses include maintaining donor lists ($10,000). Soliciting members and dues and printing membership benefits brochures are membership-development activities.

Question 11

The three categories of net assets reported for nongovernmental not-for-profit entities are:

1. unrestricted net assets,
2. temporarily restricted (by donors or grantors) net assets, and
3. permanently restricted (by donors or grantors) net assets.

Answer 11

FASB ASC 958-210-45-9 states that the amounts for each of the three classes of net assets are based on donor-imposed (not board of directors–imposed) restrictions.