Government Accounting Non-Profit Organization Module 1 Quiz

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Questions and Answers

Which of the following is a trend in the practice of non-profit organization accounting?

  • Focusing solely on revenue generation
  • Implementing transparency and accountability (correct)
  • Maximizing profits for shareholders
  • Operating without financial records

What are the characteristics of a non-profit organization according to the text?

  • Commercial, privately owned, and profit-distributing
  • Government-owned, for-profit, and non-beneficial to the public
  • Profit-oriented, publicly owned, and self-governing
  • Self-governing, voluntary, and beneficial to the public (correct)

What do non-profit organizations carry out, according to the text?

  • Commercial activities only
  • Activities aimed at maximizing profit
  • Government-directed activities
  • Socially desirable needs of the community or its members (correct)

Which of the following is a characteristic of a non-profit organization as stated in the text?

<p>Voluntary (C)</p> Signup and view all the answers

What type of organization is Adventist Medical Center Manila based on the text?

<p>Private hospital (D)</p> Signup and view all the answers

What principles are applicable to non-profit organizations based on the text?

<p>Generally accepted accounting principles (GAAP) (D)</p> Signup and view all the answers

What type of organization is the Angat Buhay Foundation, Inc.?

<p>Non-profit organization (D)</p> Signup and view all the answers

According to PFRS Principles, when is an asset (or liability) derecognized?

<p>When it ceases to provide inflow (or require outflow) of resources embodying economic benefits (A)</p> Signup and view all the answers

Which financial accounting standards are mentioned as the basis for discussions on the accounting for NPOs?

<p>SFAS No. 116 and SFAS No. 117 (C)</p> Signup and view all the answers

How are subsequent measurements of assets or liabilities conducted under PFRS Principles?

<p>At amortized cost, under cost model, or some other measurement model required by a relevant PFRS (C)</p> Signup and view all the answers

What is the main purpose of recognizing surplus revenue in non-profit organizations?

<p>To retain in furtherance of the organization’s mission (A)</p> Signup and view all the answers

Which of the following is a recognition criteria for assets and liabilities according to PFRS Principles?

<p>Probable inflow or outflow of resources (C)</p> Signup and view all the answers

What is the initial measurement of assets under PFRS Principles?

<p>At cost except when a relevant PFRS requires measurement at fair value or some other value (A)</p> Signup and view all the answers

Which type of organization does not distribute surplus revenues as dividends?

<p>Non-profit organization (C)</p> Signup and view all the answers

Under PFRS Principles, how is subsequent measurement of assets or liabilities conducted?

<p>At amortized cost, under cost model, or some other measurement model required by a relevant PFRS. (A)</p> Signup and view all the answers

Which accounting standards may be used in conjunction with the PFRSs for providing more useful financial information to users of NPOs?

<p>SFAS No. 116 and SFAS No. 117 (A)</p> Signup and view all the answers

Flashcards

Characteristics of Non-Profits

Non-profit organizations do not distribute surplus revenues as dividends, have a specific mission, and are not driven by profit.

Accounting Standards Basis

Accounting principles for non-profit organizations are primarily based on the Philippine Financial Reporting Standards (PFRS).

Asset Derecognition

When an asset no longer generates future economic benefits, or the organization no longer controls it, it is derecognized.

Recognition Criteria

To recognize assets and liabilities, consider the probability of future economic benefits and the ability to measure reliably.

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Initial Asset Measurement

Under PFRS principles, assets are initially measured at cost.

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Subsequent Measurement

After initial recognition, assets and liabilities are measured at fair value or amortized cost.

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Surplus Revenue Purpose

Surplus revenue recognition in non-profit organizations reflects the net inflow of economic benefits.

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Study Notes

  • The trend in non-profit organization accounting is towards the adoption of financial reporting standards.

Characteristics of Non-Profit Organizations

  • Non-profit organizations are characterized by their non-distribution of surplus revenues as dividends.
  • They have a specific mission or objective that they aim to achieve.
  • Non-profit organizations are not driven by the goal of making a profit.

Activities of Non-Profit Organizations

  • Non-profit organizations carry out various activities that aim to further their mission or objective.

Principles Applicable to Non-Profit Organizations

  • The principles of accounting applicable to non-profit organizations are based on the Philippine Financial Reporting Standards (PFRS).

Accounting Standards for Non-Profit Organizations

  • The PFRS and the International Financial Reporting Standards (IFRS) are the basis for discussions on the accounting for non-profit organizations.
  • The PFRS principles can be used in conjunction with other accounting standards to provide more useful financial information to users of non-profit organizations.

Asset Recognition and Derecognition

  • An asset (or liability) is derecognized when it is no longer expected to generate future economic benefits or when it is no longer controlled by the organization.
  • The recognition criteria for assets and liabilities include the probability of future economic benefits and the ability to measure the asset or liability reliably.

Initial and Subsequent Measurement of Assets

  • The initial measurement of assets under PFRS Principles is at cost.
  • Subsequent measurements of assets or liabilities are conducted at fair value or amortized cost.

Surplus Revenue Recognition

  • The main purpose of recognizing surplus revenue in non-profit organizations is to reflect the net inflow of economic benefits.

Types of Organizations

  • Adventist Medical Center Manila is a non-profit organization.
  • The Angat Buhay Foundation, Inc. is a non-profit organization.

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