FAR 8_03B

  1. Restrictions on donor-restricted funds are lifted (the funds are no longer restricted) when [this] happens.
    When the money has been spent in the manner stipulated by the donor.
  2. When donor-imposed restrictions are met in the same period they are received, how may the entity account for those funds?
    The funds may be accounted as contributions without donor restrictions IF AND ONLY IF the organization consistently applies this accounting policy.
  3. When are the funds that are perpetually restricted reclassified from restricted to unrestricted?
  4. What are the two sets of journal entries used when satisfying and then using the restriction?
    • When the restriction is satisfied
    • [DR] Satisfaction of program restriction – donor restricted
    •    [CR] Satisfaction of program restriction – w/o donor restriction
    • When using the funds previously restricted
    • [DR] Program Expense
    •    [CR] Program Revenue
  5. What is the definition of program services? Provide examples for a (1) university, (2) hospital, (3) union
    • The activities for which the organization is chartered
    • (1) University: education and research
    • (2) Hospital: Patient care and education
    • (3) Union: Labor negotiations and training
  6. What types of activities are considered Support Services?
    • Fundraising
    • Management and General (administrative expense)
    • Membership Development
  7. True / False: Research is considered a support service.
  8. Investments are accounted for using their cost, or fair value?
    Fair value
  9. True / False: Membership development includes training the members.
    • False
    • It includes only activities designed to increase membership (gain new members)
  10. Awards and grants issued by a not-for-profit entity to another organization are captured in which area of the Cash Flow Statement
    Operating Expenses
  11. What is the difference between a Contribution and a Reclassification
    • A contribution is the initial receipt of monies from a donor that may or may not be restricted.
    • A reclassification take the money already received and changes it from restricted to non-restricted.
  12. In which categories of support services are the following attributed? (1) Printing of the annual report, (2) Unsolicited merchandise sent to encourage contributions, (3) Cost of an audit.
    • (1) Management and General Expense
    • (2) Fundraising
    • (3) Management and General Expense
Card Set
FAR 8_03B
Becker Review 2018