Study Unit 20: NFP Accounting and Reporting

Question 1

NFP Financial Statements

Answer 1

1) Statement of Financial Position
2) Statement of Activities
3) Statement of Cash Flows

Question 2

VHWE (Voluntary Health & Welfare Entity) Financial Statements

Answer 2

1) Statement of Financial Position
2) Statement of Activities
3) Statement of Cash Flows
4) Statement of Functional Expenses

Question 3

NFP Statement of Financial Position Characteristics

Answer 3

• Like the B/S of for-profit entities

- Info on Assets, Liabilities, Net Assets, and their relationships in a moment of time

Question 4

NFP Statement of Activities Characteristics

Answer 4

• Like the income statement
• Reports the changes in net Assets including: reclassification of Permanently Restricted, Unrestricted, and Temporarily Restricted assets.

Question 5

Unrestricted Net Assets for NFP results from..

Answer 5

1) Providing Goods/Services
2) Receiving Unrestricted Contributions
3) Receiving interest & dividends from investments

minus

Cost of

1) Raising Contributions
2) Providing Goods/Services
3) Administration

Question 6

Temporarily Restricted Net Assets for NFP Results from..

Answer 6

Restrictions removable by the passage of time (Time restriction
or
by actions of the NFP (Purpose restriction)

Question 7

Permanently Restricted Net Assets for NFP

Answer 7

Subject to restrictions NOT removable by the passage of time or NFP’s purpose

Question 8

How are investments measured for NFP

Answer 8

Fair Value if readily determinable including

1) Unrealizable holding gains/losses
2) Investment income

Question 9

What is the value an $100,000 unrestricted gift in equity securities if $5000 dividends were received and the F.V. at year end was $110,000

Answer 9

100,000 equity
+ 5,000 dividend
+ (100K - 110K) unrealized holding gain

equals

$115,000 increase of unrestricted net assets

Question 10

What are the Functional Expenses of NFP

Answer 10

1) Program Services

2) Supporting Services

Question 11

What activities are included under Supporting Services?

Answer 11

1) Management & General
2) Fundraising
3) Membership Development

Question 12

Under Program Services the Major Purpose and output of the entity result in

Answer 12

Goods/services being distributed to beneficiaries, customers, or members to fulfill the purpose