The FASB Requires the Balance Sheets of Not-For-Profits to Display

question 31

Multiple Choice

The FASB requires the balance sheets of not-for-profits to display

• A) Net assets in two separate categories-donor-imposed restrictions and unrestricted.
• B) Four separate funds-unrestricted, partially restricted, temporarily restricted, and permanently restricted net assets.
• C) Six totals-total assets, total liabilities, total net assets, total unrestricted net assets, total temporarily restricted net assets, and total permanently restricted net assets.
• D) Unrestricted and restricted retained earnings.

Comprehend the relationship between a firm's assets, liabilities, and owner's equity.

Learn the structure and purpose of the principal financial statements.

Understand the role and types of accountants, including management and government accountants.

Recognize the importance of financial information publication by not-for-profit organizations.

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Definitions:

Treasury Stock

Treasury stock is made up of shares that have been issued and subsequently bought back by the company that issued them, which decreases the number of shares available on the open market.

Common Stock

A type of equity security that represents ownership in a corporation, providing voting rights and a share in the company's profits through dividends.

Par Preferred Stock

Preferred shares issued at a stated value (par value), which typically determines the dividend payments and is considered during liquidation.

Journalize

The process of recording transactions in a journal, which includes detailing the financial transactions of a company in chronological order.