Not-for-Profit Organizations Flashcards
Do not-for-profit organizations use GASB or FASB? Also, do not-for-profit organizations use full accrual?
FASB - but they do use fund accounting.
They use FULL ACCRUAL
What are the required financial statements of not-for-profit organizations?
1) Statement of financial position
2) Statement of activities
3) Statement of cash flows
4) Statement of functional expenses - required for voluntary health and welfare organizations
What are the three major components of statement of financial position for not-for-profit organizations?
1) Assets
2) Liabilities
3) Net assets (equity)
How can assets and liabilities be classified?
1) Current = To be spent soon
2) Non-current = To be permanently held
What are the three components of net assets?
1) Unrestricted Net Assets
- Not permanently restricted or temporarily restricted
- Internal board-designated funds are considered unrestricted
2) Temporarily Restricted
- Donor imposed stipulations that can be fulfilled through actions, or expire through the passage of time
3) Permanently Restricted
- Donor imposed stipulations that neither are fullfilable through actions, nor expire through passage of time
What are the four required elements of statement of activities?
1) Change in total net assets
2) Change in permanently restricted net assets
3) Change in unrestricted net assets
4) Change in temporarily restricted net assets
Permanently restricted is like savings account
Unrestricted is like operating account
Temporarily restricted is like savings account
How are donor-imposed restrictions classified?
Restricted Revenue
Where are all expenses reported in the statement of activities?
Unrestricted
What are the three types of expense categories?
1) Program Services
2) Support Services
3) Combined Costs
What method(s) can you use for statement of cash flows?
Indirect OR Direct Method
What is a required statement for voluntary health and welfare organizations only?
Statement of functional expenses
What are the classifications of expenses for statement of voluntary health and welfare organizations?
1) Program support expenses
2) Fundraising expenses - unsolicated merchandise sent out
3) Management and general costs
