NPO Accounting

Which statements is not true?
Statement 1 - The term public business entity, which is widely used throughout the FASB’s accounting standards codification, categorically includes NFPs.
Statement 2 - An NFP is an entity that possesses certain characteristics that distinguish it from a business enterprise.
Statement 3 - NFPs are not “owned” in the traditional sense and thus do not report shareholders’ equity

• Statement 1

• Statement 2

• Statement 3

• All of the statements is not true

Proceeds collected on pledges that are not restricted for long-term purposes is an investing activity

• TRUE

• FALSE

If a not-for-profit entity (NFP) transfers assets to a recipient entity in an equity transaction , it shall not disclose the information required for each period for which a statement of financial position is presented.

• True
• False

Cash and claims to cash that meet any of the following conditions shall be reported separately and shall be excluded from current assets, except:

• A. They are not restricted as to withdrawal or use for other than current operations
• B. They are designated for expenditure in the acquisition or construction of noncurrent assets
• C. They are required to be segregated for the liquidation of long-term debts
• D. They are limited to use for long-term purposes by a donor-imposed restriction

Under ASC 958-605-25-5A, a donor-imposed condition must have:

• A. One or more barriers that must be overcome before a recipient is entitled to the assets transferred or promised
• B. A right of return to the contributor for assets transferred (or for a reduction, settlement, or cancellation of liabilities) or a right of release of the promisor from its obligation to transfer assets (or reduce, settle, or cancel liabilities)
• C. A donor imposed condition must have both A and B above
• D. A donor imposed condition can either have A and B above

TRUE OR FALSE: There are three basic NFP financial statements which are statements: a statement of financial position (balance sheet), a statement of activities (the NFP equivalent of an income statement), and a statement of cash flows.

• True
• False

TRUE OR FALSE: Contribution is an unconditional transfer of cash or other assets, as well as unconditional promises to give, to an entity or a reduction, settlement or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner.

• True
• False

TRUE OR FALSE: SCB, an exempt organization receives a grant from A Team Foundation. The grant agreement states that the Foundation may terminate any or all payments if, in its sole discretion, it determines that SCB fails to meet the purpose of the grant. This is not considered a barrier

• True
• False

A donor has established a barrier that must be overcome before the Donee is entitled to the contribution. When will the Donee recognize the contribution?

• Donee recognizes restricted support when the condition has been substantially met.
• Donee recognizes unrestricted support when the condition has been substantially met.
• Donee recognizes restricted support when the condition has been substantially met and received.
• Donee recognizes unrestricted support when the condition has been substantially met and has a full discretion on how the funds will be used.

TRUE OR FALSE: Retained earnings of an NFP includes Net assets without donor restrictions includes cumulative surpluses (deficits) since formation, less any distributions of net assets

• True
• False