CPA Financial Accounting and Reporting (FAR) › Statement of Financial Position
On December 1, Year 1, the Gregory Corporation makes a donation of $100,000 to the Family Services Foundation, a private not-for-profit organization. Gregory requests that Family Services give the money to The Soup Kitchen, another not-for-profit organization, but allows Family Services to give the money to another organization if it seems more appropriate. On December 23, Year 1, Family Services gives the money to The Soup Kitchen. When will each organization recognize the gift as contributed support?
Family Services never recognizes contributed support, and The Soup Kitchen recognizes contributed support on December 1
Family Services recognizes contributed support on December 1, and The Soup Kitchen recognizes contributed support on December 23
Both entities recognize contributed support on December 1
Both entities recognize contributed support on December 23
Family Services recognizes the gift as contribution revenue when the gift is received, because it has the option to choose which organization to give the money to. The Soup Kitchen will also recognize contribution revenue (from Family Services) when it receives its gift.
Of the following, which would be included as a part of total net assets in the statement of financial position for a nongovernmental non for profit entity?
None of the answer choices are correct
Total current and reserved assets
Total net assets with and without donor restrictions
Committed and non committed assets
Net assets for non for profit entities are classified as with and without donor restrictions.
Homer Company made a gift of $50,000 to a national art museum with the specification that the gift be conveyed to a local art festival. The museum does not have the power to change the beneficiary and Homer did not retain the right to revoke the gift or change the beneficiary. How should the museum report the receipt this gift?
It is not reported
As $50,000 in revenue
As a liability
As public support
This is reported as a liability to the museum, because the museum is obligated to pay the gift to another beneficiary.
ABC, a nongovernmental non for profit organization, is preparing its year end financial statement. Which of the following statements is required?
Statement of Cash Flows
Statement of Changes in fund balance
Statement of revenue expenses and changes in fund balance
Statement of changes in financial position
Non for profit corporations are required to produce the following financial statements: Financial position, activities, and cash flows.
ABC, a community foundation, incurred management and general expenses during year 1. In ABC's statement of activity for the year end, the management and general expenses should be reported as:
A direct reduction of net assets without donor restrictions
A contra account to offset revenue and support
Part of program services
Part of supporting services
These are part of supporting services rather than program services.
The Professional Accountants Group is a private, not-for-profit organization that has 1,000 members. Each member pays $400 per year for their membership and receives benefits with a fair value of $120 as benefits of membership. How should the Professional Accountants Group report the revenue received from its members?
$400,00 is reported as membership dues revenue
$400,00 is reported as contribution revenue
$120,000 is reported as membership dues revenue and $280,000 is reported as contribution revenue
$120,000 should be reported as a reduction in expenses and $280,000 is reported as revenue
Only the portion of members fees that cover the fair value of benefits received are recorded as dues revenue (1K members x $120 per member). The remainder is recorded as contribution revenue (1K members x the difference of $280 per member).