Definitions
Assets
Liabilities
Easy(ish) Questions
Questions from the Book
100
What are assets?
The economic resources, either tangible or intangible, that a company posses.
100
Give at least three examples of assets.
Cash, petty cash, temporary investments, accounts receivable, inventory, supplies, prepaid insurance, land, land
100
What are current liabilities?
Current liabilities are those obligations that will mature and must be paid within 12 months.
100
What is the accounting equation?
Assets = Liabilities + Owner's Equity
100
How many distinct types of non-profit corporations are there? Name at least one.
There are 6 Direct service providers Information managers Resource distributors Support and development providers Grant makers or funders Social organizations
200
What are liabilities?
Debts or financial obligations payable to suppliers or creditors.
200
Name one example of a fixed asset.
Buildings, real estate, equipment, furniture, fixtures, machines, vehicles
200
The assets and liabilities of an organization are whose responsibility?
The Board of Directors
200
Why is it called a balance sheet?
Because the two sides balance out.
200
What does it mean for a non-profit to be tax exempt?
Must show the organization has been created and will be operated with certain purposes in mind; according to pre-established guidelines spelled out in the code. Then it must wait for the IRS’s decision on the application.
300
What is Equity?
On a company's balance sheet, the amount of the funds contributed by the owners (the stockholders) plus the retained earnings (or losses). Also referred to as "shareholders' equity.
300
Difference between current assets and fixed assets?
Current assets consist of cash and other resources (assets) that are expected to be converted into cash within one year or less. Fixed assets are purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings, and equipment.
300
What are Accrued liabilities?
All expenses incurred by the business that are required for operation but have not yet been paid at the time the books are closed.
300
What is included in a balance sheet?
Anything within or owed by your business that has monetary value is included in the balance sheet.
300
Who is interested in hybrid corporations?
Social enterprise practitioners
400
What are accruals?
Accruals are adjustments for 1) revenues that have been earned but are not yet recorded in the accounts, and 2) expenses that have been incurred but are not yet recorded in the accounts.
400
True or False... Boards invest assets entrusted to them, while managers spend funds allocated to them.
True
400
What are long-term liabilities?
Liabilities that are carried over a number of years or at least more than one accounting cycle. Examples of long-term liabilities are mortgages payable, bonds payable, and long-term notes.
400
What are Balance sheets used for?
The balance sheet presents a company's financial position at the end of a specified date. It’s a “snapshot” of a company’s financial position at a certain point in time.
400
True or False... Programs are the most visible and best understood aspect of the non-profit form of business organization, and its chief means of carrying out its mission
TRUE
500
What is revenue?
The amount of money that a company actually receives during a specific period, including discounts and deductions for returned merchandise. It is the "top line" or "gross income" figure from which costs are subtracted to determine net income.
500
Which of the following would not be a current asset? Accounts receivable, land, prepaid insurance, supplies
Land is not a current asset because land will not turn into cash within one year of the balance sheet date.
500
Name one item in the liabilities section of a balance sheet.
Accounts payable and accrued expenses Grants payable Deferred revenue Tax, exempt bond liabilities Escrow or custodial account liability Payables to current and former officers, directors, trustees, key employees, highest compensated employees, and disqualified persons Secured mortgages and notes payable to unrelated third parties Unsecured notes and loans payable to unrelated third parties Other liabilities
500
Are accounts payable found under assets or liabilities?
Liabilities
500
True or False... Executives do not share leadership responsibilities with the board?
False
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