CPA Exam - FAR - Area I – NFP Questions
with Complete Solutions
Recall the purpose and objectives of the statement of cash flows for a nongovernmental,
not-for-profit entity To provide information about cash flows
Encouraged to use direct method
Temporarily restricted = financing activity, otherwise it is similar to for profit
What categories are used in a nongovernmental not-for-profit entity's statement of financial
position? Assets, liabilities, and net assets
A contribution to a not-for-profit restricted to long-term purposes like construction shall be
reported as a cash flow from ___? Financing activities
A nongovernmental not-for-profit entity borrowed $5,000, which it used to purchase a truck. In
which section of the organization's statement of cash flows should the transaction be reported?
In cash inflow from financing activities and cash outflow from investing activities
When a promised contribution will not be collected until the subsequent year, it should be
considered restricted.
with Complete Solutions
Recall the purpose and objectives of the statement of cash flows for a nongovernmental,
not-for-profit entity To provide information about cash flows
Encouraged to use direct method
Temporarily restricted = financing activity, otherwise it is similar to for profit
What categories are used in a nongovernmental not-for-profit entity's statement of financial
position? Assets, liabilities, and net assets
A contribution to a not-for-profit restricted to long-term purposes like construction shall be
reported as a cash flow from ___? Financing activities
A nongovernmental not-for-profit entity borrowed $5,000, which it used to purchase a truck. In
which section of the organization's statement of cash flows should the transaction be reported?
In cash inflow from financing activities and cash outflow from investing activities
When a promised contribution will not be collected until the subsequent year, it should be
considered restricted.
