Non-For Profit Accounting

Answer True or False

1. Expense of private NFPO is reported by function classification. in addition, detailed statement of nature and function is reported in the notes in the financial statements.

2. In Private NFPO, Cause of statement of activity reclassifications are four kinds : operating activities, acquisition of PPE, time restriction, and endowment.

3. Items that is included in the with donor restriction is reclassified by without donor restriction by achievement of purpose or passage of time. at this moment, the amount corresponding to changes in net asset(with) : has no effect, changes in net asset(without) : decrease.

4. Governmental statement of cash flow start calculation from operating income, and, Non-for-profit organizational statement of cash flow start calculation from changes in total net asset.

5. In non-for-profit organizational statement of cash flow, (1) without, operating, and time restriction (short-term) items are reported in CFO, (2) PPE, endowment, time restriction (long-term) items are reported in CFF.

6. An unconditional promise to give (pledge) have to be reported in with donor restriction column regardless of collection timing (ex. collection of current year vs. collection of next year). If cash is collected, journal entries are as follows : Cash Contribution receivable Contribution_with Contribution_without

7. In statement of activity of private NFPO, if with donor restriction item is reclassified into without donor restriction, corresponding disclosure to notes is required.

8. Contribution is an unconditional transfer of cash or other assets to an entity or a settlement or cancellation of its liabilities in a voluntary non-reciprocal transfer by another entity acting other than as an owner.

9. In non-governmental not-for-profit organization, If expense occurred as follow : Education, Fundraising, Management and general and Research, Education is reported in Program category. The others are supporting activity.

10. In NFP Organization, Reporting format of expense of the financial statements is only functional classification. In addition, natural classification is reported in the notes to the financial statements.

11. In not-for-profit organization, depreciation is included in total expenses. On the contrary, Grants to other organizations is not.

12. A donor donated $10,000 to nongovernmental, non-for-profit organization and stipulated that this contribution should be used to general operating expense in current year. In this case, even if donor stipulate contribution as restricted use, this contribution should be classified to the without donor restriction because the nature of the stipulation is 'general purpose'.

13. A donor donated $10,000 to non-governmental, non-for-profit organization with no stipulation. If board of trustee of the non-for-profit organization stipulate this contribution at specified use, this contribution should be classified as 'without donor restriction.'

14. A non-governmental non-for-profit organization borrowed money of $5,000 to a financial institution. The purpose of the borrowing was to purchase PPE. In this case, when organization prepare statement of cash flow, cash inflow and out flow is reported to the investing activity.

15. A university's asset : $15,000,000, liability : 9,000,000(included deferred revenue $500,000). As a result, AIFA's net asset is : $6,500,000

16. Program service is similar to CGS of the enterprise accounting and the other total expenses is included in supporting activity.

17. Cash received with donor-imposed restriction limiting its use to long term purposes (such as construction of a new building) is displayed as a investing activity on the statement of cash flows of a not-for-profit organization.

18. Guidance included in FASB ASC 958, Financial Statements of Not-for-Profit Organizations, focuses on: Basic information for the organization as a whole.

19. Supporting activity is classified to without category as soon as expense occur. Therefore, supporting activity is included in 'without' category immediately, in full amount.

20. Donor's interest is the appropriate characterization of the net assets of a non governmental not-for profit organization.