CPA Exam Lab
Section 1: 30–40%1B3

Statement of Cash Flows (NFP)

Contributions are the heart of NFP accounting — and the hardest part. AICPA's favorite trap: a donor gives cash 'for the new building.' Is that with donor restriction or without? It depends on whether the restriction is purpose-based or time-based. Board-designated funds look restricted but are legally unrestricted. Know those distinctions or you'll misclassify net assets on every question.

What AICPA Wants You to Know

  • 1Apply the three-section structure (operating, investing, financing) to NFP cash flows
  • 2Classify contributions with donor restrictions correctly in the cash flow statement
  • 3Determine where endowment receipts and investment returns appear
  • 4Explain NFP-specific cash flow classification rules under ASC 958