Not-for-Profit Organizations (ASNPO, IFRS) – Study Notes

An NPO that uses fund accounting receives a contribution of a bus that will be used for general operational purposes. There was a stipulation that the organization must not sell the bus for at least two years. Which one of the following funds would be the most appropriate fund in which to record the contribution?

A	General fund
B	Capital asset fund
C	Restricted fund
D	Endowment fund

Capital asset fund

Which one of the following statements best describes NPOs?

A	NPOs always provide a limited scope of services to their users.
B	NPOs meet a wide variety of needs.
C	The main users of NPO financial statements are the shareholders of the organization.
D	All NPOs receive government funding.

B	NPOs meet a wide variety of needs.

Which one of the following describes an NPO?

A	An entity, normally without transferable ownership interests, organized and operated exclusively for a not-for-profit purpose. Its members and contributors do not receive a financial return.
B	An entity, normally with transferable ownership interests, organized and operated exclusively for a not-for-profit purpose. Its members and contributors do not receive a financial return.
C	An entity, normally without transferable ownership interests, organized and operated exclusively for a not-for-profit purpose. Its members and contributors usually receive a financial return.
D	An entity, normally without transferable ownership interests, organized and operated at least partially for a not-for-profit purpose. Its members and contributors do not receive a financial return.

An entity, normally without transferable ownership interests, organized and operated exclusively for a not-for-profit purpose. Its members and contributors do not receive a financial return

Which one of the following statements regarding endowment contributions is true?

A	Interest on an endowment is always included in the general fund.
B	Interest on the endowment must be retained.
C	The principal balance of the endowment can be spent.
D	The principal balance on the endowment is always retained.

The principal balance on the endowment is always retained.

Which one of the following best describes fund accounting used by NPOs?

A	In practice, most NPOs do not use fund accounting.
B	Fund accounting must be used when an NPO uses the restricted fund method of accounting for contributions.
C	A separate bank account must be maintained for each fund.
D	Retained earnings summarizes the net excess or deficiency of assets over liabilities for each separate fund.

	Fund accounting must be used when an NPO uses the restricted fund method of accounting for contributions.

Which one of the following sections of the CPA Canada Handbook – Accounting is specific to NPOs?

A	Part IV
B	Part I
C	Part II
D	Part III

Part III

Which of the following are common funds used in fund accounting by NPOs?

A	Operating fund, financing fund, and investing fund
B	Cash fund, accrual fund, and endowment fund
C	General fund, administrative fund, maintenance fund, and capital fund
D	General fund, restricted fund, endowment fund, and capital fund

General fund, restricted fund, endowment fund, and capital fund

Which one of the following statements best describes the restricted fund used in fund accounting by NPOs?

A	The use of a restricted fund is required.
B	An NPO can only have one restricted fund.
C	It is used to record interest income earned on endowment contributions that can only be used for a specific purpose.
D	It is used for contributions that are restricted in use and those that are not.

It is used to record interest income earned on endowment contributions that can only be used for a specific purpose.

Which one of the following is a characteristic of NPOs?

A	They may be organized and operated for earning profit.
B	Ownership interest is always transferrable.
C	Members and contributors do not receive a financial return directly from the organization.
D	Users are limited to shareholders, lenders, and contributors.

Members and contributors do not receive a financial return directly from the organization.

Which one of the following statements describes fund accounting used by NPOs?

A	An accounting system that allows NPOs to segment their financial statements based on the nature of their various projects, programs, and expenditures
B	An accounting system that allows NPOs to segment their operations based on the nature of their various projects, programs, and expenditures
C	An accounting system that all NPOs are required to use to segment their financial statements based on the nature of their various projects, programs, and expenditures
D	An accounting system that all NPOs are required to use to segment their operations based on the nature of their various projects, programs, and expenditures

An accounting system that allows NPOs to segment their financial statements based on the nature of their various projects, programs, and expenditures