Lesson: New section name: Non-for-profit: statement of activities - Practice Questions

Instructor: Nick Palazzolo

In this lesson, Nick Palazzolo, CPA, makes tackling questions on the non-for-profit statement of activities both engaging and digestible. With a focus on classification essentials, Nick helps demystify where each item belongs, whether as program services or supporting services. He also sheds light on the nuances of reporting management and general expenses, supporting the understanding with practical examples. Furthermore, Nick clarifies what should never be netted together in the statement of activities, using a conversational approach that brings clarity to potentially complex scenarios. This lesson is an excellent resource for getting a solid grip on the intricacies of non-profit accounting.

Updated: June 18, 2024 Create an account

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Recommended Lessons

Not-For-Profit: Statement of Activities Overview and Objectives

Introduction to the Statement of Activities

Program and Support Services

Reporting Expenses by Nature and Function

Exchange Transactions Revenue

Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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Questions on the non-for-profit statement of activities. Just gets me excited here. I love not-for-profit and governmental. They're not too tricky once you learn them. Hope you all are having a good time learning those and let's see what this question has in store for us today. ABC, a community foundation, incurred management and general expenses during year one. In ABC's statement of activity for the year end, the management and general expenses should be reported as what? Classification, classification all the way, trying to understand where each item in non-for-profit goes. Classification is our favorite word when it comes to all these questions. Now let's think about this, a community foundation. What would that do? Think about in most questions here, what does the actual organization do? This one's maybe a little more vague, right? Community foundation, but they probably put on events, they bring the community together, maybe they host blood drives. Just again, a lot more general than a hospital. Hospital, you know what they do. Soup kitchen, you know what they do. In this case, management and general expenses, no matter what, no matter what you do as an organization for your non-for-profit activities, your charity activities, management and general expenses, those are not going to be your core activities. And we know that our core activities go into program services. If we're a hospital, expenses incurred toward providing healthcare, that's gonna be program services. If we are a youth group, it's gonna be putting out events for the youth. So if we're a museum, it's gonna be providing exhibits. However, management in general, basically things to keep the lights on, also fundraising. These are all going to be something other than program services. Let's keep reading on. A contra account to offset revenue and support.

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Financial Statements: Nongovernmental, Not-for-profit Entities

Module: 2 Concepts, 27 Lessons

Non-For-Profit: Statement of Financial Position Overview and Objectives

1:47

Review of Non-For-Profit Entities

2:35

Introduction to the Statement of Financial Position

2:32

Examples of Non-For-Profit Organizations