Exam 13: Accounting for Not-For-Profit Organizations

Similar to the GASB,the FASB requires not-for-profit entities to prepare the statement of cash flows using the direct method.

Supporting services expenses include fund-raising and management and general expenses that are not directly attributable to specific programs.

In the current year,the not-for-profit organization Save the Butterflies Foundation received cash of $500 to be used as the Foundation wishes and $1,000 to be used for butterfly research.Save the Butterflies also received pledges of $700 that it can use as it wishes and $600 for its building fund.All pledges are expected to be received next year.How much would Save the Butterflies report as temporarily restricted contributions in the current year?

The FASB requires that long-term unconditional pledges (those that will not be collected within a year)be reported at fair value.

The board of directors for a voluntary health and welfare organization decided to designate $20,000 each year for the next three years to fund a special research project it was planning to conduct at the end of the three year period. How would these board-designated resources be reported on the statement of financial position?

During the year a donor pledged $1,000,000 in funds to a not-for-profit private charter school. The school will receive the pledge if it is able to raise $500,000 in funds over the next year. According to the FASB,how would this pledge be recorded?

Contributions received in a prior period and restricted by the donor for construction of a building were reported as increases to "temporarily restricted net assets" in the period received.When the building is constructed in a subsequent period a not-for-profit would report "contributions" for the amount released from restrictions.

The FASB requires a statement of functional expenses be prepared by all not-for-profit organizations.

In the current year,the not-for-profit organization (NFP)How to Read Government Financial Reports received both cash of $1,000 and pledges of $2,000 to be used for teaching citizens how to read government financial reports.During the year the organization spent $1,500 teaching citizens to read financial statements.Assuming the NFP has a policy of spending its restricted resources first,in the current year what amount of contributions can be reclassified as unrestricted?

A not-for-profit (NFP)organization acting as a financial intermediary receives a contribution.Under the FASB Codification the NFP would be most likely to recognize the contribution as a liability under which of the following situations?

Which of the following statements is regarding fund accounting for not-for-profit organizations (NFPs)?

Under FASB standards,expenses of a not-for-profit organization can only be shown as reductions of unrestricted net assets.

Which of the following characteristics of not-for-profit organizations (NFPs)can be used to distinguish a nongovernmental from a governmental NFP?

In accordance with the FASB Codification,which of the following would not be classified as a support expense by the not-for-profit organization Save Our Lakes?

Distinguish not-for-profit organizations from entities in the government and commercial sectors of the U.S.economy.

Which of the following would be reported as an Asset with Restrictions on Use?

Expense amounts by natural classification can be determined from the statement of functional expenses,as can the expense amounts for program services and supporting services categories.

When a nongovernmental not-for-profit organization spends money for the purpose for which an external donor intended,then the expense is reported as a:

The FASB states that if a not-for-profit has a controlling interest in another not-for-profit it should consolidate the not-for-profit over which it has a controlling interest into its financial statements.

The FASB states that donated services should be recorded as contributions by a not-for-profit organization if material,and if they meet the recognition criteria.