The data on pages 657-658 pertaining to two not-for-profit hospices were taken from GuideStar, an online database

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The data on pages 657-658 pertaining to two not-for-profit hospices were taken from GuideStar, an online database (www.guidestar.org) that provides information about not-for-profit organizations. Names and dates have been changed. The forms 990 that are included on the website indicate that Pleasant Valley and Ancient Falls had fund-raising expenses of $38,327 and $11,075, respectively. Because the data were taken from an Internal Revenue Service form, the statements are not in the format required by GAAP (e.g., they do not report net assets by degree of restrictiveness).
The data on pages 657-658 pertaining to two not-for-profit hospices
The data on pages 657-658 pertaining to two not-for-profit hospices

1. Which of the two is the more likely to be able to satisfy its current liabilities as measured by the quick ratio? Include only cash and receivables.
2. Which has the greater financial resources as measured by the ratio of total expenses to net assets (excluding property, plant, and equipment)?
3. Which spends the greater percentage of its revenues on fund-raising?
4. Which directs a greater portion of its revenues to program services?
5. Based on this limited amount of information, which of the two, in your opinion, is the more fiscally sound?

GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...
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Government and Not for Profit Accounting Concepts and Practices

ISBN: 978-1118983270

7th edition

Authors: Michael Granof, Saleha Khumawala, Thad Calabrese, Daniel Smith

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