ACCOUNTING F/GOVERNMENTAL &NONPROFIT
17th Edition
ISBN: 9781308693934
Author: RECK
Publisher: MCG/CREATE
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Chapter 1, Problem 10Q
To determine
Identify the reasons for classifying the costs separately by the not for profit organizations and the users of such information.
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Which of the following accounting rules apply to all not-for-profit organizations? (Select all that apply.)
The financial statements must include a statement of functional expenses
The balance sheet must segregate assets according to restrictions on their use.
The balance sheet must segregate current assets from long-term assets.
The balance sheet must show reserves for likely amount of bad debts.
Equipment must be reported net of accumulated depreciation.
The activity statement must report expenses as decreases in net assets with donor restrictions.
The activity statement must segregate revenues according to restrictions on their use.
Which of the following statements is true?a. All not-for-profit organizations must include a statement of functional expenses.b. Donor-restricted contributions whose restrictions have been met in the reporting period may be reported as unrestricted support.c. Statements should focus on the individual unrestricted and restricted funds of the organization.d. FASB ASC 958-605 contains requirements that are generally more stringent than those relating to for-profit organizations.
The following questions concern the accounting principles and procedures applicable to a private not-for-profit entity. Write answers to each question.a. What is the difference between revenue and public support?b. What is the significance of the statement of functional expenses?c. What accounting process does a private charity use in connection with donated materials? d. What is the difference in the two types of restricted net assets found in the financial records of a private not-for-profit organization?e. Under what conditions should the entity record donated services?f. What is the proper handling of costs associated with direct mail and other solicitations for money that also contain educational materials?g. A not-for-profit receives a painting. Under what conditions can this painting be judged as a work of art? If it meets the criteria for a work of art, how is the financial reporting of the entity affected?
Chapter 1 Solutions
ACCOUNTING F/GOVERNMENTAL &NONPROFIT
Ch. 1 - Prob. 1QCh. 1 - Prob. 2QCh. 1 - Prob. 3QCh. 1 - Prob. 4QCh. 1 - Explain the meaning and significance of...Ch. 1 - Prob. 6QCh. 1 - Prob. 7QCh. 1 - What are the three sections of a comprehensive...Ch. 1 - Prob. 9QCh. 1 - Prob. 10Q
Ch. 1 - Prob. 11CCh. 1 - Prob. 14CCh. 1 - Prob. 15CCh. 1 - Prob. 17EPCh. 1 - Prob. 18.1EPCh. 1 - Prob. 18.2EPCh. 1 - Prob. 18.3EPCh. 1 - Prob. 18.4EPCh. 1 - Prob. 18.5EPCh. 1 - Prob. 18.6EPCh. 1 - Prob. 18.7EPCh. 1 - Prob. 18.8EPCh. 1 - Prob. 18.9EPCh. 1 - The primary reason that not-for-profit (NFP)...Ch. 1 - Prob. 19EP
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- The following questions concern the accounting principles and procedures applicable to a private not-for-profit entity. Write answers to each question. What is the difference between revenue and public support? What is the significance of the statement of functional expenses? What accounting process does a private charity use in connection with donated materials? What is the difference in the two types of restricted net assets found in the financial records of a private not-for-profit organization? Under what conditions should the entity record donated services? What is the proper handling of costs associated with direct mail and other solicitations for money that also contain educational materials? A not-for-profit receives a painting. Under what conditions can this painting be judged as a work of art? If it meets the criteria for a work of art, how is the financial reporting of the entity affected?arrow_forwardDefine Not-for-Profit organizations. Explain what distinguishes governmental not-for-profit organizations from nongovernmental, not-for-profit organizations. Why is such a distinction necessary? Mention the objectives of financial reporting of not-for-profit organizations?arrow_forwardAnswer two questions please 1-What are the objectives of financial reporting of not-for-profit organizations? 2-Which fund category uses modified accrual basis of accounting? What are the recognition rules of revenues and expenditures under modified accrual basis of accounting?arrow_forward
- In Governmental and Nonprofit Accounting, the use of fund accounting is a unique feature, allowing for the segregation of resources into distinct categories based on their source, restrictions, and purpose. True falsearrow_forwardDifferentiate between public support and revenues as sources of assets for private not-for-profit organizations. Whatbenefit is there in accounting for these differently?arrow_forwardDiscuss how characteristics of not-for-profit organizations differ from for-profit organizations.arrow_forward
- What are the objectives of financial reporting of not-for-profit organizations?arrow_forwardIf we "measure what matters" in a not-for-profit, what activities could they be measuring that are different than the for-profit organization?arrow_forwardExplain the difference between the three classifications of donor's contribution to a not-for profit organization. (unrestricted, permanently restricted and temporarily restricted).arrow_forward
- What is the underlying reason a governmental unit uses separate funds to account for its transactions? a. Governmental units are so large that it would be unduly cumbersome to account for all transactions as a single unit. b. Because of the diverse nature of the services offered and legal provisions regarding activities of a governmental unit, it is necessary to segregate activities by functional nature. c. Generally accepted accounting principles require that not-for-profit entities report on a funds basis. d. Many activities carried on by governmental units are short lived, and their inclusion in a general set of accounts could cause undue probability of error and omission.arrow_forwardWhich of the following types of information would be included in total net assets in the statement of financial position for a not-for-profit organization?a. total current assets.b. long-term liabilities.c. types of individual funds the entity has.d. unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets.arrow_forwardIf we "measure what matters" in a not-for-profit, what activities could they be measuring that are different than the for-profit organization? 1-2 paragrahsarrow_forward
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