NFP Accounting Final Exam Questions
and Answers 100% Pass
Public non-profit standard setting body - ✔✔GASB
Private non-profit standard setting body - ✔✔FASB
FASB statement 117 - ✔✔written to bring consistency and comparability
between the financial reports of Private Colleges, Hospitals, Voluntary
Health and Welfare Organizations (VHWO), and Other Not-for-Profits
Voluntary health and wellness organizations - ✔✔promote general health
and wellbeing of public; operate mostly from grants and gifts; ex: United
Way, American Cancer Society, Girl Scouts, YMCA
Other Not-for-Profits - ✔✔benefit group of individuals; operate mostly
from member fees; ex: Fraternal Order of Police, Lions Libraries, Museums
1
Katelyn Whitman, All Rights Reserved © 2025
,NFP accounting basics - ✔✔accrual accounting (depreciation, expenses);
funds only used internally
Required NFP financial statements - ✔✔statement of financial position,
statement of activities, statement of cash flows
expense categories - ✔✔functional and natural; can be presented on the
face of the Statement of Activities, in the notes to the financial statements,
or through a separate schedule such as the Statement of Functional
Expenses
change in net assets - ✔✔excess of revenues over expenses; not a measure
of organizational effectiveness
supporting services expenses - ✔✔management & general, fundraising,
membership development
cash flow categories - ✔✔operating, investing, financing
operating cash flows - ✔✔Interest expense, interest revenue, and gains and
losses are classified as operating
2
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, investing cash flows - ✔✔Purchases or sales of fixed assets as well as
purchases or sales of long-term investments
financing cash flows - ✔✔Issuance of debt; repayments of principal of debt;
restricted contributions or restricted investment proceeds that will be used
for long-term purposes (endowments, capital assets)
statement of functional expenses - ✔✔Matrix (spreadsheet) of expenses
where the columns are the functional classification (program or supporting
activities) and the rows are the natural classification (type of expense:
salaries, supplies, depreciation, etc.); Provides additional detail as to how
the expenses were allocated to programs and supporting services
accounting for contributions - ✔✔does the resource provider receive
commensurate value in return for the resources provided? (exchange
transaction) Are the resources conditional? (disclosure) Are there donor-
imposed restrictions on use? (contribution revenue with donor restrictions)
record contribution revenue - ✔✔in period received at fair market value;
unconditional pledges recorded even before cash received (PV-allowance
for uncollectibles)
3
Katelyn Whitman, All Rights Reserved © 2025
and Answers 100% Pass
Public non-profit standard setting body - ✔✔GASB
Private non-profit standard setting body - ✔✔FASB
FASB statement 117 - ✔✔written to bring consistency and comparability
between the financial reports of Private Colleges, Hospitals, Voluntary
Health and Welfare Organizations (VHWO), and Other Not-for-Profits
Voluntary health and wellness organizations - ✔✔promote general health
and wellbeing of public; operate mostly from grants and gifts; ex: United
Way, American Cancer Society, Girl Scouts, YMCA
Other Not-for-Profits - ✔✔benefit group of individuals; operate mostly
from member fees; ex: Fraternal Order of Police, Lions Libraries, Museums
1
Katelyn Whitman, All Rights Reserved © 2025
,NFP accounting basics - ✔✔accrual accounting (depreciation, expenses);
funds only used internally
Required NFP financial statements - ✔✔statement of financial position,
statement of activities, statement of cash flows
expense categories - ✔✔functional and natural; can be presented on the
face of the Statement of Activities, in the notes to the financial statements,
or through a separate schedule such as the Statement of Functional
Expenses
change in net assets - ✔✔excess of revenues over expenses; not a measure
of organizational effectiveness
supporting services expenses - ✔✔management & general, fundraising,
membership development
cash flow categories - ✔✔operating, investing, financing
operating cash flows - ✔✔Interest expense, interest revenue, and gains and
losses are classified as operating
2
Katelyn Whitman, All Rights Reserved © 2025
, investing cash flows - ✔✔Purchases or sales of fixed assets as well as
purchases or sales of long-term investments
financing cash flows - ✔✔Issuance of debt; repayments of principal of debt;
restricted contributions or restricted investment proceeds that will be used
for long-term purposes (endowments, capital assets)
statement of functional expenses - ✔✔Matrix (spreadsheet) of expenses
where the columns are the functional classification (program or supporting
activities) and the rows are the natural classification (type of expense:
salaries, supplies, depreciation, etc.); Provides additional detail as to how
the expenses were allocated to programs and supporting services
accounting for contributions - ✔✔does the resource provider receive
commensurate value in return for the resources provided? (exchange
transaction) Are the resources conditional? (disclosure) Are there donor-
imposed restrictions on use? (contribution revenue with donor restrictions)
record contribution revenue - ✔✔in period received at fair market value;
unconditional pledges recorded even before cash received (PV-allowance
for uncollectibles)
3
Katelyn Whitman, All Rights Reserved © 2025
