Are - Npo, Hospitals, Univs, Vhwo

Front 1

Report the fair value of donated services (doctors, nurses) as both an expense and revenue if:

Back 1

1. The services would be otherwise purchased
2. The value of the the services is measurable
3. The entity controls the employment and duties of the service donors

Front 2

Contributions of services are recognized as revenues only if:

Back 2

1. Nonfinancial assets are created or enhanced
2. Special skills are required that would be otherwise purchased

Front 3

Five types of hospital funds

Back 3

(UPSET)
Unrestricted general
Plant replacement
Specific purpose
Endowment
Term Endowment

Front 4

7 types of university funds

Back 4

C PAL ALE
Current funds
Plant funds
Agency funds
Loan funds
Annuity Fund
Life income fund
Endowment fund

Front 5

2 categories of NPO expenses

Back 5

1. Program services - related directly to the primary missions of the nonprofit organization
2. Support services - include such costs as management and general administration, membership development, and fund-raising.

Front 6

What 3 statements do nonprofit hospitals prepare?

Back 6

Statement of Activities, Statement of Financial Position and Statement of Cash Flows

Front 7

What basis of accounting do nonprofits use?

Back 7

full accrual accounting

Front 8

According to FASB 117, what are the the three required statements for a nonprofit?

Back 8

1. Statement of financial position
2. Statement of activities
3. Statement of cash flows

Front 9

What is the main thrust of the Statement of Financial position for a nonprofit?

Back 9

- to show net assets in three positions:
1. unrestricted net assets
2. temporarily restricted net assets
3. permanently restricted net assets

Front 10

What is the focus of the Statement of Activities for a NPO?

Back 10

-show all revenues plus any net assets released from restriction
-focus is to show the changes in net asset positions (all 3)

Front 11

When are contributions recognized as revenue?

Back 11

When the contribution is collected, or even pledged, at fair market falue at date of gift

Front 12

What is the result of a gift that has a restriction?

Back 12

Recognized as temporarily restricted revenue

Front 13

What is the JE if the restricted money hasnt been spent by the end of the year?

Back 13

dr Temp Restricted Revenue
cr Net Assets - Temp Restricted

Front 14

What are the 2 JEs for when you purchase equipment with temporarily restricted money?

Back 14

dr PPE
cr Cash
dr Net Assets: Temp Restr.
cr Net Assets released from restriction

Front 15

How are pledges accounted for?

Back 15

Revenue at fair market value in the period the pledge is made

Front 16

What 3 criterias do you use to determine when to recognize donated service?

Back 16

1. FMV determinable
2. Would otherwise buy
3. Employer-employee equivalent relationship, or non-fiancial assets created or enhanced

Front 17

All the funds that a heathcare entity may use for internal reporting are organized around what one topic?

Back 17

Whether the funds are restricted or unrestricted.

Front 18

What is the only unrestricted fund in healthcare funds?

Back 18

general fund - accounts for money that is not restricted in any way?

Front 19

How does a general fund of a hospital differ from that of a gov't general fund?

Back 19

-hospital carries fixed assets w/ accum dep in the general fund
-hospital carries LT debt, bonds payable
-hospital carries board designated assets

Front 20

Is board-designated money restricted?

Back 20

no - restricted money has to be by an external party - donor restricted
- this is internally restricted money, and therefore it is technically unrestricted

Front 21

What is a specific purpose fund?

Back 21

Accounts for money that is restricted (grants, donations) for operational purposes
- temporarily restricted net assets
- money can only be used for that specific purpose
- no fund balance -> net assets temp restricted

Front 22

What is a plant replacement fund?

Back 22

Accounts for money that is restricted for capital additions
- temporarily restricted net assets

Front 23

What are the 2 types of endowment funds?

Back 23

1. Permanent (pure) endowment
2. Term endowment

Front 24

What is a permanent endowment?

Back 24

Accounts for donations when the principal may not be spent
- only income may be spent for specified purpose

Front 25

What is a term endowment?

Back 25

After a period of time (term), principal may be spent
- temporarily restricted net assets

Front 26

What are the 3 categories of revenue for private, nonprofit hospitals?

Back 26

1. Patient service revenues - private rooms, xray fees, surgery fees
2. Other operating revenues - cafeteria, gift shop, paid parking lot, educational programs, specific purpose grants, donated services
3. Nonoperating gains and losses - unrestricted gifts and pledges, g/l on sale of assets, unrestricted endowment income, expired term endowment

Front 27

What do colleges use unrestricted current funds for?

Back 27

Accounts for unrestricted money and current operations
- tuition, etc
- net assets - unrestricted

Front 28

What two funds make up the current funds group in a college?

Back 28

1. Unrestricted current fund
2. Restricted current fund

Front 29

What are the 4 types of plant funds in a college or university?

Back 29

1. Investment in plant
2. Unexpended plant
3. Retirement of indebtedness
3. Renewal and replacements

Front 30

What is in the investment in plant fund?

Back 30

-carries the fixed assets
-carries LT debt associated with fixed assets

- net assets: unrestricted

Front 31

What is the the Unexpended Plant Fund in a c/u?

Back 31

- accounts for money restricted for capital additions

- Net Assets: Temporarily restricted

Front 32

What is the Retirement of Indebtedness Fund?

Back 32

- Services debt
- Net assets: Temporarily restricted

Front 33

What is the Renewal & Replacements Fund?

Back 33

- accounts for money that is restricted for major repairs, mtce, and refurbishing
- Net assets: Temporarily restricted

Front 34

What is a loan fund?

Back 34

- accounts for temporary loan to students, faculty and staff

- Net assets: temporarily restricted

Front 35

What are endowment funds, and what are the 3 types?

Back 35

Accounts for money donated to university
1. Regular (pure) endowment
2. Temporary (term) endowment
3. Quasi endowment

Front 36

What is a regular (pure) endowment in a c/u?

Back 36

- principal may not be spent, only earnings
- Net Assets: Permanently restricted

Front 37

What is a quasi-endowment?

Back 37

-board designated assets
-Net Assets: Unrestricted

Front 38

What are three types of tuition waivers?

Back 38

Scholarships
Fellowships
Tuition waivers

Front 39

How are tuition waivers accounted for?

Back 39

- they are NOT revenue reductions
- dr scholarship expense
cr tuition revenue
- full disclosure!!

Front 40

How do refunds affect revenue?

Back 40

Refunds are a direct reduction of revenue

Front 41

In the Statement of Activities, a distincition is drawn between expenses into what two categories?

Back 41

Program vs. Support

Front 42

What 2 categories of program expenses are there?

Back 42

1. Education and general - instruction, research, student services, financial aid
2. Auxiliary enterprises - cafeteria, dorms, bookstores, athletic programs

Front 43

What types of Supprt Expenses are there?

Back 43

-fundraising, management, administration

Front 44

What is a VHWO?

Back 44

A Voluntary Health and Welfare Organization
- Red Cross, United Way

Front 45

What are the 6 funds VHWOs use?

Back 45

ACRUEL
Asset
Custodian (agency)
Restricted current
Unrestricted current
Endowment
Life & Annuity

Front 46

What are the four statements that are required for VHWO by FASB 117?

Back 46

1. Statement of financial position
2. Statement of cash flowes
3. Statement of activities
4. Statement of functional expenses

Front 47

What situation does FASB 136 cover?

Back 47

Donor transfers money to a non profit, but the NPO is not the intented beneficiary - they are the agent before the money goes to the actual beneficiary

Front 48

How do NPOs treat money as per FASB 136?

Back 48

-refundable advance, contribution or support, or as an equity transaction

Front 49

When can a NPO treat money as a refundable advance?

Back 49

If any ONE of these criteria are met:
1. Donor still has right to direct assets
2. Donor may revoke gift
3. Donor controls the NPO
4. Donor specifies itself of affiliate as beneficiary

Front 50

When would NPO treat money as a contribution/support?

Back 50

1. Not any of four refundable advance criteria are met
AND
1. NPO has variance power
OR
2. NPO & beneficiary are financially interrelated

Front 51

IF NPO has no variance profit, no financial interrelationship and not a refundable advance, who ultimately records revenue?

Back 51

beneficiary

Front 52

What are the criteria for an equity transaction?1

Back 52

ALL THESE MUST BE MET
1. Donor specifieds self or affiliate as beneficiary
2. Donor & NPO are financially interrelated
3. Return payment not expected