Term
| A special-purpose local government that engages in just one governmental activity is permitted to combine the fund and government-wide financial statements. In addition, the government must provide: |
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Definition
In addition to the financial statements:
-Management's Discussion and Analysis
-notes to the financial statements
-Required Supplementary Information |
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Term
| Special-purpose governments engaging in fiduciary-type activities are required to present: |
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Definition
-MD&A
-Statement of Fiduciary Net Assets
-Statement of Changes in Fiduciary Net Assets,
-Notes to the Financial Statements
-Required Supplementary Information other than MD&A.
-A Statement of Cash Flows is not required. |
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Term
| If a university receives a reimbursement grant, when should the revenue associated with the grant be recognized? |
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Definition
| When qualified expenditures covered by the grant are made |
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Term
| What is required in the financial reporting for a college reporting as a special-purpose entity engaged in business-type activities only? |
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Definition
-MD&A
-Statement of Net Assets
-Statement of Revenues, Expenses, and Changes in Net Assets
-Statement of Cash Flows
-Notes to the Financial Statements
-Required Supplementary Information Other Than MD&A. |
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Term
| How is summer school accounted for in public colleges and universities? |
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Definition
| Colleges and universities use the accrual basis of accounting and follow the general rules for business-type activities. Since most public colleges have June 30th year ends, summer school commonly spans two fiscal years and should be recognized on a proportionate basis in both years. |
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Term
| How are tuition deductions for athletic scholarships treated by public colleges and universities? |
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Definition
| Reported as reductions of revenue, not expenses |
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Term
| What are the net asset classifications for private not-for-profit organizations? |
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Definition
Unrestricted, temporarily restricted, and permanently restricted.
The term "reserved" might be used for resources that the organization's board has designated for a particular purpose. To be restricted, rather than reserved, the restriction must come from outside the organization. |
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Term
| When a non-profit receives a conditional promise to give when is the revenue associated with this contribution recognized? |
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Definition
| When the organization meets the conditions of the promise. May still be temporarily restricted if it is to be used for a specific purpose or a a later time. |
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Term
| How are assets & liabilities reported by NP organizations? |
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Definition
In the Statement of Net Assets they must be listed either in order of liquidity or classified as current and non-current.
They do not need to be classified as temporarily restricted, permanently restricted, and unrestricted. However, net assets *are* classified by restriction status. |
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Term
| What are the requirements when NP organizations prepare a statement of cash flows? |
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Definition
The Statement of Cash Flows is required for all not-for-profit organizations.
May be prepared on either the direct or indirect method.
The format for the Statement of Cash Flows is the same as that for the private sector; there are three categories: operating, investing, and financing.
Unrestricted investment income is classified as operating; however investment proceeds that are restricted for long-term purposes are classified as a financing activity.
Contributions that are restricted for long-term purposes are classified as a financing activity. |
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Term
| What type of NP is required to prepare a Statement of Functional Expense? What does it show? |
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Definition
Voluntary Health and Welfare organizations prepare this.
It shows expenses classified in two ways (in a matrix format) both by object and by function. |
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Term
| What is a program expense in a NP org? |
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Definition
| One that fulfills the primary objective of the not-for-profit organization. Should not be confused with support services, which come in two types: management & administrative and fund raising. |
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Term
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Definition
| It is computed as program services expenses divided by total expenses. The financial measure of greatest interest in evaluating a not-for-profit organization. |
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Term
| What organizations do Statements 116 and 117 apply to? |
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Definition
| NP health care organizations only (not for-profit health care organizations) |
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Term
| What must be excluded from the performance indicator for a health care organization? |
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Definition
| Receipt of restricted contributions. Performance indicators report results from continuing operations so it is important to distinguish operating revenues and expenses from nonoperating revenues and expenses. |
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Term
| How is net patient revenue reported by a NP hospital? |
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Definition
| Net patient revenue does not include charity care and contractual adjustments. Uncollectible accounts are recorded as an expense not a contra revenue account. |
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Term
| How should a NP hospital account for underestimate of contractual adjustments? |
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Definition
| They are treated as a change in estimate and not as an error. Prior year financial statements should not be restated. Prior period adjustments are used to correct errors not to report changes in estimate so do not apply. |
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Term
| What are the financial statements of a private not-for-profit health care organization? |
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Definition
-Statement of Operations
-Statement of Financial Position
-Statement of Cash Flows |
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Term
| What is the fundamental difference between a health care organization and a voluntary health and welfare organization (VHWO)? |
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Definition
| A health care organization intends to recover a significant part of its costs through operating revenues; a VHWO is funded to a large extent by contributions |
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Term
| How does a private not-for-profit hospital account for uncollectible patient accounts receivable? |
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Definition
| Estimated uncollectible patient accounts are recorded as bad debt expense |
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Term
| An audit of a state or local government is subject to what standards? |
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Definition
| Government Auditing Standards (GAGAS) and Statements on Auditing Standards (GAAS) - Government Auditing Standards include extensions of GAAS because of the unique nature of public entities. |
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Term
Government Auditing Standards are issued by:
Statements on Auditing Standards (GAAS) are issued by: |
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Definition
| US Government Accountability Office (GAO); the AICPA. |
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Term
| The objective of the Single Audit process is to: |
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Definition
| Provide assurance to the federal government that governmental grants are expended in accordance with applicable laws and regulations. The Act was designed to relieve the inefficiency caused by auditing every grant individually. |
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Term
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Definition
| A program selected for audit under the single audit approach. It is identified by both size and risk. Major programs must add up to 50% or more of the federal funds expended (unless the auditee meets the criteria for low risk). Type A and B programs are determined by size: type A programs are large and type B programs are smaller. Type A programs are not necessarily low risk. |
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Term
| A conservative measure of a government's ability to meet expenses with available resources would be: |
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Definition
| Net assets/expenses measures a government's ability to meet expenses, but a more conservative measure compares unrestricted net assets to expenses. |
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Term
| Service Efforts and Accomplishments: |
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Definition
| Conceptualization of the resources consumed (inputs), tasks performed (outputs), and goals attained (outcomes), and the relationships among these items in providing services in selected areas (e.g., police protection, solid waste garbage collection, and elementary and secondary education). |
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Term
| A split-interest agreement: |
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Definition
| An arrangement whereby a private college shares benefits of a donation with the donor. |
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Term
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Definition
| A designation of resources by the governing board of the college in an endowment-like arrangement. |
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Term
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Definition
| An arrangement where the donor stipulates that the principal remains intact for a period of time. After that time expires, the principal may be spent. |
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Term
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Definition
| Its activities are generally self-supporting, such as the college bookstore. |
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Term
| statement of activities (not-for-profit accounting) |
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Definition
| One of the three statements required for not-for-profit organizations by FASB Statement 117. Requirements are to show revenues, expenses, gains, losses, and reclassifications and to show the change in net assets by net asset class (unrestricted, temporarily restricted, permanently restricted). |
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Term
| statement of cash flows is required for: |
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Definition
-proprietary funds for governmental units
- all not-for-profit organizations. |
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Term
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Definition
| Required by the Health Care Guide to be prepared by all health care organizations. Includes a performance indicator. |
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Term
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Definition
| Under Government Auditing Standards, an independent assessment of the performance and management of a program against objective criteria. |
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Term
| not-for-profit organization |
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Definition
| An entity that possesses the following characteristics: (1) receives significant resources from donors who do not expect equivalent value in return; (2) operates for purposes other than to provide goods or services at a profit; and (3) lacks an identifiable individual or group of individuals who hold a legally enforceable residual claim. |
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Term
| modified accrual basis of accounting |
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Definition
| Basis of accounting required for use by governmental funds in which revenues are recognized in the period in which they become available and measurable, and expenditures are recognized at the time a liability is incurred except for principal and interest on long-term debt, which are recorded when due. |
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