CH 13

Functional expenses reported by natural classification, such as: Salaries Rent Electricity Supplies D________ A______ and G______ to other, Interest

Salaries rent, electricity, supplies, depreciation, awards /grants interest

Nonprofits must report expenses by nature or function in one of three places. a. face of the statement of activities b. ______ financial statement ( is called Statement of _____ Expenses) c. notes to the financial statements

Separate /Functional

Statement of Financial Position helps donors, members, and interested parties assess a nonprofit's ability to continue its operations, as well as its l______ , financial f______ , ability to meet o______, and f_____ financing need.

ability operations Liquidity flexibility obligations future

If Investments, purchased by nonprofit, recorded @ Acq. cost If investments received as a donation, recorded @ FV FASB standards require that investments held by nonprofits in equity securities that have readily determinable fair values, and all investments in debt securities, be reported at fair value. 在准备财务报表时，非营利性持有活跃交易的股票证券将按照在注册证券交易所报告的收盘价对其进行估值。

acquisition fair value

Donor contributions may be considered as revenues or gains, depending on whether nonprofit activily seeks and receives contributions.

actively

FASB Accounting Standards Update (ASU) 2016-14, "Not-for-Profit Entities" was Issued in August 2016 may significant change to the financial report requirements for the nonprofit. It was effective beginning with 2018 calendar years.

(ASU) 2016-14 requirement 2018

Common types of nonprofit funds 1.U__________ Current Funds 2.R__________ Current Funds 3.E__________ Funds 4.P__________ funds (flowers)

1.Unrestricted Current Funds 2.Restricted Current Funds 3.Endowment Funds 4.Plant funds

Specialized skills provided by individuals who possess 具有the skills, and typically would need to be purchased by nonprofit if services not donated. Examples—services provided by: A_______ A_______ C______ E________ L________ N_______ P_______ T_______ Professionals and c_____

Accountants Architects Carpenters Electricians Lawyers Nurses Plumbers Teachers Other professionals and craftsmen

Common Nonprofit Exchange Transactions a. ______ membership dues b. college ______ and fees c. ______ patient services d. _______ provided under contract with state or local governments e. Bookstore or gift shop ____ f. ____ care services g. ______ services or any other services provided for a fee

Annual tuition Hospital Services state sales Day Social

Net assets: Without donor restrictions Undesignated Designated by the _____ for .... With donor restrictions T_____restricted P_____ restricted Held in ______

Board Time Purpose perpetuity

Contributions to Collections Two possible accounting treatments (options) for a donated item added to a collection: 1. C_____ item added to collection 2. N_____ c_____ item added to collection. No asset or revenue or gain recognized. Must have ______ policy of capitalizing all items or no items in a collection

Capitalize Not capitalize added consistent

Examples of Other Nonprofit Organizations: Cemetery organizations 公墓组织 Civic and community organizations 公民和社区组织 Laber unions 工人工会 Nongovernmental library and museum P_______ arts organizations Political parties Private foundations Private nonprofit elementary and secondary schools P______ associations and trade associations (CPAs, CPEs) R_____ organizations R______ and scientific organizations S______ and c_____ clubs

Cemetery organizations Civic and community organizations Labor unions Nongovernmental libraries and museums Performing arts organizations Political parties Private foundations Private nonprofit elementary and secondary schools Professional associations and trade associations Religious organizations Research and scientific organizations Social and country clubs

Capitalize item added to collection Dr. ______ —painting, etc. for fair value of donated item Cr. _______ or ______

Collection / Revenues / gains

Unconditional Promises to Give (Pledges) Example—Pledge expected to be received in future years Food for the Community received a pledge from a wealthy donor that will be made in three annual installments of $5,000. The first installment will be made immediately on December 31, 2018, the end of it current year annual reporting period. The remaining installments will be made on January 1, 2020 and 2021. The average borrowing rate for Food for the Community is 5%. Prepare the journal entry to record the pledge. The present value of annuity table shows that $9,297 is the present value of two annual payments discounted at 5%.

Dr. Cash $ 5,000 Dr. Contributions Receivable $10,000 Cr. Contribution Revenue — Support with inherent time restriction $9,297 Cr. Contribution Revenue—Support without donor restrictions 5,000 Cr. Discount on contributions receivable 703

A nonprofit cancer research center receives a $100,000 gift from a donor. The donor states that $5,000 of the gift may be used currently for cancer research; $10,000 may be used next year; and the remaining $85,000 must be maintained in perpetuity with only the earnings from the $85,000 gift used for cancer research. Prepare the journal entry to record the gift. Note: Nonprofits are only required to distinguish between net assets with donor restrictions and net assets without donor restrictions. The additional detail regarding restrictions provided in the journal entry helps nonprofits keep track of ongoing restrictions. Dr. _______ Cr. _______

Dr. Cash $100,000 Cr. Contribution Revenue—Donor support with purpose restrictions $5,000 Cr. Contribution Revenue—Donor support with time restrictions 10,000 Cr. Contribution Revenue—Donor support with permanent restrictions 85,000

A homeless shelter receives a cash contribution of $20,000; a donation of stock with a fair value of $12,000 at the time of the donation; and a donation of free electricity for the month from the city owned electric company valued at $300. The donations are unrestricted. Prepare the journal entry to record the transactions. Dr. Cash. 20,000 Dr. Investments 12,000 Dr. Utility expense 300 Cr. ________

Dr. Cash. 20,000 Dr. Investments 12,000 Dr. Utility expense 300 Cr. Contribution Revenue—Support without donor restrictions $32,300

Food for the Community, a nonprofit organization, receives $100,000 in unconditional promises to give (pledges) from donors. Food for the Community expects to collect $98,000 of the pledges prior to its year end with the rest expected to be uncollectible. Record the journal entry to record the pledges. Dr. ________ Cr. ________

Dr. Contributions receivable $100,000 Cr. Allowance for uncollectible contributions $2,000 Cr. Contribution Revenue—Support without donor restrictions 98,000

To record satisfaction of time restriction on donation for $7,000 Dr. _____ Cr. _____

Dr. Net Assets with donor restrictions, Reclassification out—satisfaction of time restrictions 7,000 Cr. Net Assets without donor restrictions, Reclassification in—satisfaction of time restrictions 7,000

Assume Beacon's board of trustees designates $100,000 of the nonprofit's net assets to expand its plant. Make the journal entry to designate net assets. To record board designation of net assets without donor restrictions. Dr. _____ Cr. _____

Dr. Net assets without donor restrictions 100,000 Cr. Net assets without donor restrictions - board designated for plant expansion 100,000

筹集资金时使用的宣传小册子如果包含教程，则把筹资cost分配到two expenses To record payment of expenses related to drug abuse prevention brochure. Dr. __________ Cr. __________

Dr. Program expenses — drug abuse prevention 6,000 Dr. Fundraising expenses 2,000 Cr. Cash 8,000

To record payment for spectial research expenses for $5,000. To record satisfaction of purpose restriction on the donation for 5,000. Dr. _____ Cr. _____

Dr. Program expenses — special research programs 5,000 Cr. Cash 5,000 Dr. Net Assets with donor restrictions, Reclassification out—satisfaction of purpose restrictions 5,000 Cr. Net Assets without donor restrictions, Reclassifications in—satisfaction of purpose restrictions 5,000

Assume a nonprofit received 100 shares of a stock as a contribution in October 2019. Because it had a fair value of $40 a share when received, it was recorded at $4,000. Assume the investment was worth $43 a share when the nonprofit prepared its financial statements on December 31, 2019, and was subsequently sold for $44 a share on March 15, 2020. The nonprofit would make the following journal entries. a. To record unrealized gain on investments, Entry at December 31,2019 b. To record sales of investment and gain in investment value.Entry at March 15, 2020 (time of sale)

Entry at December 31,2019 To record unrealized gain on investments Dr. Investments 300 Cr. Net unrealized and realized investment gains and losses 300 Entry at March 15, 2020 (time of sale) To record sales of investment and gain in investment value. Dr. Cash 4,400 Cr. Net unrealized and realized investment gains and losses 100 Cr. Investments 4300

Food for the Community has a CPA do their monthly bookkeeping. The CPA does the work pro bono. The CPA normally charges $100 an hour for this service and spent 90 hours on its bookkeeping for the year. Food for the Community also had volunteers donate 1,200 hours during the year to help stock and prepare food for delivery to needy individuals. They would have had to pay $9 an hour if not for the volunteers. Make the journal entry to record contributed services. *Note that no entry is made for the volunteers that helped stock and prepare food for delivery as their work did not require specialized skills.

Expenses—accounting services $9,000 Unrestricted support—accounting services $9,000

Expenses reported as supporting activities rather than as program activities fall into three classes: Management and general activity (record keeping, supervision, IT support) F_______ activity (solicitation of money, materials) M______ development activity ( membership dues)

Management Fundraising Membership

Statement of Cash Flows provides information about cash receipts and cash payments for the same period of time as the statement of activities Three categories: Operating activities : may use both direct or indirect method Investing activities Financing activities

Operating activities May use direct or indirect method Investing activterm-45ities Financing activities

Four broad categories of nonprofit organizations: Voluntary health and welfare organizations (VHWO) Heath care organizations College and university Other nonprofit organizations

Voluntary health and welfare Health College and universities

All expenses must be reported in the statement of activities as decreases in net assets without donor restrictions, even though the original contribution with donor restrictions. To accomplish this result, nonprofits need to make an additional journal entry to r________ net assets with donor restrictions to net assets without donor restrictions when the restriction expires.

activities without reclassify expires

Expenses incurred by nonprofits must be reported on the statement of activities or on the _____ of statement by their functional expense classifications such as major classes p______ activities and s______ activities. When functional expense classifications are used, individual expenses (such as salaries and supplies) are aggregated by f_____ or p______.

activities / note program / supporting function / program 按功能或程序汇总

Costs benefiting more than one program should be allocated.

allocated

Statement of Activities provides reader with information about: the effects of transactions and other events that change the ____ and ____ of net assets; how the nonprofit's resources are used in providing various p_______ or services.

amount nature programs 交易和其他事件的影响改变了净资产的数量和性质 非营利组织的资源如何用于提供各种计划或服务

Fair Value Reporting Fair value as the "Price that would be received to sell an ____ or paid to transfer a ______ in an orderly transaction between market participants on the _______ date." 市场参与者在计量日期之间进行的有序交易中，出售资产所收取的费用或转移负债所支付的费用

asset liability measurement

Journal entry to record contributed services Debit ___________ expense Credit contribution _______ for fair value of donated services

asset or offsetting revenue

A statement of financial position, or balance sheet, provides financial information about the assets, liabilities, and net assets of the organization and their relationship to each other.

assets / liabilities / net assets

Nonprofits have an option regarding how to recognize donated works of art, historical artifacts, rare books, and similar assets provided the donated items are added to _______ that meet three conditions: a. held for public ________, __________, or ________ in furtherance of public service rather than financial gain. b. P_______ kept, and preserved. c. s_____ of collection to acquire other collections.

collections exhibition / education / research Protected, sales

Five steps to each type of exchange revenue 1. Identify the _______ with the customer 2. Identify the _______ obligations in the contract 3. Determine the _______ 4. Allocate the transaction price to the ______ obligations in the contract 5. Recognize______ when (or as) the entity satisfies a performance obligation

contract(s) performance transaction price performance revenue

Non-Donor Contractual Restrictions are created by contracts with anyone other than a donor are reported as net assets ______ donor restrictions such as: B________ agreements L________ agreements C________

contracts donor without bond licensing contracts

What makes a nonprofit a nonprofit? 1. Receive significant contributions from providers who do not expect proportionate _____ in return. 2. Operate for purpose other than to provide good and services at a profit. 3. lack defined ownership interests like for-profit entities that can be sold, transferred, or redeemed.

contributions / benefits profit ownership

Objectives of Nonprofit Financial Reporting help users: a. Make rational decision about how to allocate their resources to nonprofits b. Assess the services a nonprofit provides and its ability to continue to provide them c. Assess how well the organization is managing _____ resources that is ______ function. d. Understand the entity's assets, liabilities, and net resources and the effect that transactions have had or will have on them.

decisions ability donated / stewardship

Generally, nonprofits report d_______ expense. An allocation of the cost of a long-lived tangible asset over its ______ life. If nonprofit chooses to capitalize them, individual works of art or historical treasures do not need to be _______ if their economic benefit or service potential are used up so slowly that their estimated useful lives are extraordinarily long. To not depreciate, nonprofit must have _____ and ______ capacity to preserve the asset.

depreciation useful depreciated technological financial

Nonprofit Accounting: Record capital assets and related depreciation Record long-term debt

depreciation / long-term

Expenses that represent direct conduct or supervision of a program or that directly benefit a program must be a_____ to those programs rather than be reported as supporting activities. For example, internal information technology (IT) expenses would be allocated to the _______ that they directly benefit.

direct / allocated / programs

Investing expenses should be reported in statement of activities only if they are _____ at carrying out the nonprofit's ______. For example, costs of making loans to low-income persons to promote home ownership would be program expenses for a nonprofit established for that purpose, not investment expenses. All other investment expenses must be ____ against investment return, which is reported (generally in a separate line) in other revenue, sometimes called "nonoperating revenue."

direct / purpose. netted a

A program is directly related to the purpose(s) for which the organization was established. A supporting activity is indirectly related to the purpose for which the organization was established.

directly indirectly

Unconditional Promises to Give (Pledges) cash more than one year after the statement of net position date must be ______ to present value. Discount rate generally nonprofit's average earning rate on investments or average borrowing rate. Over time, the discount is accreted and recorded as contribution revenue.

discounted 承诺在净头寸日期后一年以上提供现金的，必须折现至现值。 折现率通常是非营利组织的平均投资收益率或平均借贷率。随着时间的流逝，折扣会增加并记录为贡献收入。

Only the donor can put the restrictions on the donations. but board of Trustees can put a portion of donations for a particular purpose. These Board-designated net assets are also reported separately on the face of a nonprofit's financial statements or the notes.

donor purpose financial notes

Characteristics of Nonprofit Organizations has no focus on earnings and don't report the profit or loss_, or EPS. They must demonstrate accountability to donors such as how donations have been used and what strings are attached to donations.

earnings profits losses EPS accountability / used /strings

Nonprofit entities account for revenues, expenses, assets, and liabilities using the same measurement focus and basis of accounting as for-profit entities — the economic resources measurement focus and full accural basis of accounting

economic / full accrual

Governments have one or more following characteristics: (1) their officers are either popularly elected, or a controlling majority of their governing boards are appointed or approved by entities that are clearly governmental; (2) they may have the power to tax levy; (3) they may have the power to issue taxes-exempt debt; or (4) they can be disovled unilaterally by a government, and their net assets assumed by it without compensation.

elected / appointed / approved tax levy tax-exempt dissolve net assets

Nonprofits follow new FASB revenue recognition criteria for nonprofits Effective for fiscal years beginning after December 15, 2018. Applies to revenues from ______ transactions. An exchange is a transaction where each participant both receives and sacrifices value. Does not apply to nonexchange revenues.

exchange

Nonprofit organizations may have _______ and ______ components. Bifurcating contracts 分叉合同 ______ them into components in the contact. Before working through five steps to recognize revenues, nonprofits must _____ which parts, if any, of contract are exchange transactions, and which represent contributions — nonexchange transactions. Example Membership dues($300) to a historical society may include a newsletter($65), which is a direct benefit (exchange) to members, as well as a contribution (nonexchange component, $235) from members.

exchange / nonexchange splits determine

Because they are organized for the benefit of public, they are exempt from many taxes. Examples are A_____ Cancer Society Boy S______ of America National Urban League Young Women Christian Association of the USA

exempt American Cancer Society Boy Scouts of America National Urban League Young Women's Christian Association of the USA

Fundraising costs reported separately as fundraising ______ . Reported as Program Expenses if the _______, _______, and ______ rule met: a. Purpose/content: asks audience to take specific _____ that will help accomplish mission. b. Audience: not based on contribution______ . Reported as ______ expenses if three criteria not met. Allocate the cost between ______ and _______ expenses,

expenses purpose / audience / content action likelihood fundraising fundraising / program

A nonprofit must recognize the expiration of a contribution with donor restrictions in the period the restriction expires. A restriction expires a. when the stipulated purpose for which the contribution was made has been fulfilled, b. when the stipulated time period has elapse, or both.

expires fulfilled / elapses 过去

Other Nonprofit Organizations provide services to those provided by voluntary health and welfare organizations and charge user fees. Many of them provide benefits to their members and revenues primarily from membership dues and fees.

fees/ dues / fees

Contributions of services must be recognized in the financial statements of a nonprofit if the services received (1) create or enhance ________ assets 非金融资产or (2) require __________ skills, are provided by individuals who possess those skills, and would typically need to be purchased if the services were not donated.

financial specialized

Exchange Transactions Nonprofits account for exchange revenue and receivables in same manner as _______ enterprises Presumption that all revenues arise from written or unwritten c_______ with customers

for-profit contracts

FASB ASC par. 958-605-45-5 states: "Receipts of unconditional promises to give with payments due in ______ periods shall be reported as ______ support unless explicit donor stipulations or circumstances surrounding the receipt of a promise make clear that the donor intended it to be used to support activities of the ______ period."

future donor-restricted current "无条件许诺将来收到应付款的收据应报告为捐助方限制支助，除非明确的捐助方规定或收到承诺的情况表明捐助方打算将其用于支持当期活动 。"

On Statement of Activities Revenues, Gains, and Other support is reported as increases in either net assets with donor restrictions or net assets without donor restrictions. Expenses must be reported as decreases in net assets without donor restrictions. If expenses financed from donor restricted resources: Journal entry used to r______ donor-restricted assets and i_______ assets without donor restrictions

increases / decreases / without reduce / increase

An unconditional promise to give has an _______ time restriction because the nonprofit cannot spend cash that it has not received. Cash was expected to be received _____ to current year end. Therefore, Contribution revenue—support without donor restrictions was ______ .

inherent 固有的 prior credited

Investment income, such as _______, ________, and _______, should be recognized as the income is earned. This income should be reported in the _________ as increases in _______ without ________, unless use of the income is limited by donor-imposed restrictions.

interest dividends rents statement of activities net assets donor restrictions

Some nonprofits use fund accounting for ______ record-keeping purposes. Although not permitted for _____ financial reporting purposes, the FASB does not preclude (排除） providing disaggregated information by fund groups within the two required net asset classes—with donor restrictions and without donor restrictions. The way nonprofits use funds varies to some extent among the different types of nonprofit. GAAP 不允许用fund accounting，但FASB排除提供分类信息

internal GAAP

Three "improvements" in information affect how nonprofits present their statement of financial position: 1. Assets and liabilities are presented in homogenous groups that provide information about their i___________ , l_________, and financial f______. 2. Net assets are presented in one of two groups net assets without donor restrictions or net assets with donor restrictions. 3. Revenues, gains, and losses are aggregated into homogenous groups and reported as increases or decreases in net assets with donor restrictions or in net assets without donor restrictions.

interrelationships, liquidity, flexibility liquidity, two / with / without increases decreases

The improvement affects only the statement of cash flow is that cash receipts and payments are reported as arising from either operating, investing, or financing activities.

investing, financing, operating

On Statement of Financial Position Assets presented in order of liquidity, Liabilities presented in order of anticipated liquidation, and Net assets presented by n_____ and amount of d_______ restrictions. Statement of Financial Position helps reader understand nonprofit's financial f______.

liquidity anticipated nature donor-imposed flexibility

Donor restrictions affect asset classification. For examples, investments to be held in perpetuity should be sequenced with long-term investments. Donor-restricted cash awaiting suitable long-term investment should be sequenced nearer to ______ investments. Donor restricted cash and investment that must be used to acquire capital assets should be sequenced closer to capital.

long-term 必须永久持有的投资应与长期投资按顺序排列。 等待合适的长期投资的受捐助者限制的现金应与长期投资更接近地排序。 而且，捐赠者限制的现金和必须用于获取资本资产的投资应与资本资产更接近地排列。 例如，如果在应收款之间细分了应收款信息，例如从服务接收者，捐赠者和特别筹款运动的认捐中得到的信息，则将更有用。

An endowment is an established fund (that is, a specific group of assets) consisting of cash, securities, or other assets intended to provide m_____ of a nonprofit. Endowment funds are usually created by g_____ from donors who request that the gifts be invested in p_____ or a s_______ period of time. These donors also generally specify how investment e______ and g_____ may be used.

maintenance gifts perpetuity specified earnings gains

Conditional Promises to Give are promise that bind the donor to give upon the occurrence of a specified "future and uncertain" event. For examples： A. Donor promises to _____ the donations of others to Food for the Community up to a maximum of $100,000 if received by Food for the Community prior to March 1, 2019. B. Donor promises to give $1 million toward the construction of a new warehouse, but ______ a new warehouse is built rather than refurbishing the existing Food for the Community warehouse. C. Donor makes a provision in her _____ to give $100,000 to Food for the Community. Donor may change her will. Thus, it is a conditional promise to give.

match only if will

Reporting expenses by nature that refers to ______ expense classification. Items such as slaeries, rent, electricity, and supplies

natural salaries / rent / electricity / supplies

Although nonprofits use _____ to display donor restrictions (not individual assets), GAAP does require nonprofits to present cash available for _____ use (whether or not donor-restricted) separate from cash and other assets not currently available (for example, because of donor-imposed time restrictions). GAAP also provide that cash being held by a custodian or awaiting purchase of an appropriate ____- investment may be more clearly grouped with investments.

net assets cash current long-term

Reclassification transactions are reported as revenues, gains, and other support under the caption Net assets without donor restrictions. Reclassify out __________ with donor restrictions to reclassification in net assets _______ donor restrictions. JE: Dr. _______ Dr. _______

net assets / without Dr. Net Assets [with] donor restrictions, Reclassification [out] - satisfaction of purpose restrictions Cr. Net Assets [without] donor restrictions, Reclassification [in] - satisfaction of purpose restrictions

The distinction between nonprofits and governments is often fuzzy. Some governmental entities are even organized under nonprofit corporations laws. Most nonprofits depend on government funding. Many nonprofits provide services requested by governments.

nonprofit corporation government governments

Fair Value Reporting may account for realized and unrealized investment gains and losses in _____ account or two accounts

one

Information about contractual restrictions is generally presented in the notes to financial statements, [except] when it affects presentation by ______.

order of liquidity

Net asset classes may be presented in multicolumn format or in a single column "pancake ____" format.

pancake style

Gains are the inflows from a nonprofits ______ or incidental transactions such as selling securities or operating a parking lot in conjunction with a nonprofit's major activities. It is possible that an activity considered by one organization to produce revenue will be considered by another organization to produce gain.

peripheral / incidental 外围/附带

A promise to give, sometimes called a pledge or a ________ subscription, is a written or oral agreement to contribute cash or other assets to another entity.

pledge / charitable cash

All nonprofits must prepare (1) a statement of financial position (or BS), (2) a statement of ____, and (3) a statement of cash flow. In addition, all nonprofits are required by ASU 2016-14 to provide information in a single location — either in the face of the financial statements, in a body financial statement, or in the accompanying notes — about their functional ______ by natural classification, such as salaries, rent, electricity, supplies, depreciation, awards and grants to others, and interest.

position activities cash flows single body separate notes

The term "Function" refers to a. specific ______ b. _______ and general activities, f______ activities, or potentially, _________ development activities.

programs management undraising membership

Contributions with Donor-Imposed Restrictions Temporary restrictions has two Types: Purpose restrictions - is for specific programs, projects, or property and equipment. Endowments Time restrictions

purpose / time net assets

Conditional Promises to Give is recognized as_________ and revenues or gains only when conditions are substantially met. If donor transfers cash to nonprofit when conditional promise is made, the nonprofit would make the following entry until conditions are met: Debit _______ Credit ___________ "Substantially met" requires professional judgment. If the possibility that the condition will not be met is ______ , the promise should be considered unconditional.

receivables Debit Cash Credit Refundable advance (a deferred revenue account) remote

Unconditional promise to give is depend only on passage of time or demand by receiver of the promise. a. Recognize receivable and revenues or gains when nonprofit receives ______. b. Receivable reported at _____ value. c. Revenue is reduced by _____ for uncollectible contributions

receiver promise / net realizable /Allowance

The general rule for reporting contributions other than services and collections: A. report as revenue or gains in the period received B. report as ______ , decreases in ______ , or _______, depending on the form the benefits take C. report as either support with donor restrictions or support without donor restrictions D. measure contribution at the fair value of the contribution received

revenue assets / liabilities / expenses with / without fair

When the split-interest agreements are irrevocable, nonprofit should recognize contribution _______ and related assets at the ______ of the beneficial interest when irrevocable split-interest agreement is executed Classification as support with or without donor restrictions depends on donor's stipulation on when resources are available for use by the nonprofit

revenue / fair value

Financial reporting for split-interest agreements depend on whether it is _______ (cancellable) by the donor Revocable split-interest agreement is only an intention to give. Any contributions received while agreement is revocable: Dr. _______ Cr. _______

revocable Dr. Cash or other asset Cr. Refundable advance (a deferred revenue account)

Reduce donor-restricted assets and increase assets without donor restrictions, when donor restrictions are s_____ a. by incurring capital/ program expense , b. by completing required program _____ , or c. by the passage of _____ . In the foregoing skeletal outline, next to the caption "Net assets released from restrictions," notice the reduction reported for net assets with donor restrictions and the corresponding increase in net assets without donor restrictions.

satisfied expenses / activities time

Revenues are the inflows from selling goods or providing services that constitute nonprofit's ongoing major or central operations, such as a. Fees for providing child care services b. College Tuition c. Charges for services to hospital patients

selling / Fees tuition / Charges

The FASB Accounting Standards Codification (ASC) is the single source of authoritative accounting and financial reporting guidanc for nonprofit entities. FASB ASC Topic 958 applies only to nonprofits. Separate Codification Topics for Nonprofits and Nonprofit hospital. FASB ASC Topic 954 , "Health Care Entities," provides additional guidance for nonprofit, business-oriented health care entities.

single / guidance 958 / hospitals 954

The restriction on this initial contribution can never be removed by action of the nonprofit and the contribution should be reported as ____ with donor restrictions. (The nonprofit may track this restriction by recording it in an _____ fund, if it uses funds for internal record-keeping purposes) The income from investing these resources (such as interest, dividends, or rents) also should be classified as donor-restricted support because the donor stipulated that investment income can only be used to perform specific research. Gains or net appreciation are not available for ______ but must be added to the initial contributed amount.

support endowment expenditure

Donor-imposed contribution is reported as s_______ with donor restrictions. These donations increase net assets with donor restrictions. If donor restrictions met in same period that contribution is received, the contribution may be reported as support without donor restrictions.

support net assets same without

It is not uncommon to see a significant quantity of notes to the financial statements regarding a non-profit's investments. In FASB ASC Topic 820, the FASB established a three-level fair value hierarchy that prioritizes the types of data used (inputs) to measure fair value. These _____ fair value hierarchy is for determining how to _______ fair value.

three-level / measure

Contribution is an ________ transfer of cash or other assets from one entity to another for which the entity making the contribution does not directly receive equal value in exchange. Examples of contributions: Cash Investments Supplies Materials Rights to use facilities P______ services Works of art

unconditional / exchange Cash Investments Supplies Materials Rights to use facilities Personal services Works of art

Voluntary health and welfare organizations are the entities formed for the purpose of providing voluntary services for various segments of society in the field of health, welfare and other social services. These entities obtain the resources primarily from _______ from the general public (often at no charge or low charge to the service recipients). They may also receive grants and _________ from governmental agencies provides specific social services.

voluntary / segments donations / grants /contracts

Donor Restrictions include: 1. Donors specify the purposes for w_____ donated resources may be spent 2. Donors specify when donated resources may be spent (time restriction) 3. Donors may specify that donated resources may never be spent (the case like e______ ) but you can use the _____ of the donations.

which / when / never endowments interest

FASB does not specify format for nonprofit statement of activities. Statement of activities must report on entity as a whole and must include three amounts: Change in net assets Change in net assets with donor restrictions Change in net assets without donor restrictions

whole net assets with without

Statement of Financial Position must include the following five elements: Total assets Total liabilities Total net assets Total net assets with donor restrictions Total net assets without donor restrictions

with without

Donor-imposed restrictions significantly influence nonprofit accounting and reporting. Nonprofit must classify and report net assets in one or two classes: Net assets without donor restrictions Net assets with donor restrictions

with / without

Unrestricted Contributions is contributions without donor-imposed restrictions. Report in statement of activities as revenues or gains without donor restrictions.

without revenues