Review

Question 1

When we prepare interim FS what tax rate do we use?

Answer 1

The expected/estimated tax rate.

Question 2

FASB 958

Answer 2

Sets the standards of NFP organizations

Question 3

How do NFP report expenses

Answer 3

Functional classification in statement of activity AKA IS

Question 4

How do NFP disclose expenses

Answer 4

Natural classification by function in the notes to the FS

Question 5

What are functional activities

Answer 5

Main operations only

Question 6

What are supporting activities

Answer 6

Everything else that does not have to do with the main mission.

Question 7

What is measurement focus

Answer 7

It determines what goes in the BS

Question 8

What re the gov funds and what do they do

Answer 8

GRaSPP
General (G&A)
Special Rev
Debt Service Fund
Capital category fund (Construct major capital asset)
Permanent funds (Only interest income is useable)
(Use the modified accrual basis and report only current assets and liabilities)

Question 9

What are proprietary funds and what do they do

Answer 9

SE
(Use the accrual basis and is economic measurement focus)
These funds account for business-type activities.
Internal service fund (Goods and services provided by designated departments/ the customers are internal)
Enterprise Funds (GOV facility acquisition and operation of GOV facilities)

Question 10

Fiduciary funds

Answer 10

CIPPOE
(Assets a company has control over but on behalf of a beneficiary)
Custodial Funds
Investment trust fund
Private purpose trust fund
Pension trust fund
Other Employee trust fund

Question 11

When is income and expenses recognized in GOV Accounting

Answer 11

Income when recognized so in the period deemed collectible or within 60 days after year-end.
Expenses when related liabilities are incurred (except for principal and interest which is when it is paid or owed)

Question 12

Which FV method uses discount approach

Answer 12

IS

Question 13

If a patent was not defended correctly

Answer 13

Expense the entire things

Question 14

ARO

Answer 14

ARC decreases with depreciation
dr depreciation
cr accumulated depreciation ARC

ARO increases with accretion (Interest expense calculated using beginning balance for the period)
dr accretion expense
cr ARO

Expense for the year = aro depreciation + accretion expense

Question 15

Statement of activities
statement of financial position

Answer 15

IS
BS

Question 16

When issuing stock dividends

Answer 16

If it is a small stock use FV on the date of declaration
if it is large use par

Remember RE gets debited by the value of the stock

Question 17

Vacation pay is

Answer 17

Accrued if Vested or accumulated

Question 18

Consolidated NI

Answer 18

Net income is the main
-Equity in earning of sub
+%of sub income owned

Question 19

Consolidated RE

Answer 19

Use parent only

Question 20

Cost of premium are

Answer 20

not part of contribution they are expensed

Question 21

Do not recognize assets in NFP if

Answer 21

They have major uncertainties with recognizing FV and have no alternate use.

Question 22

Premiums on life insurance are

Answer 22

Taxed (Proceeds are the once that are not taxed)

Question 23

Endowment in perpetuity increase

Answer 23

Net assets with donor restrictions

Question 24

In NFP entities that are holding assets of one another

Answer 24

If they are related then it is an equity interest
if they are not it is a beneficial interest

Question 25

Donations received and classified as quinsy endowments are

Answer 25

Not donor restricted

Question 26

Functional expenses include

Answer 26

Program and support services

Question 27

Most important thing in financial reporting is

Answer 27

Accountability