Questions and Answers of Accounting For Governmental And Nonprofit Entities

Which of the following is not identified by SFFAC No. 2 as a perspective from which the federal government can be viewed for accounting and reporting purposes?a. Budget.b. Legal.c. Organizational.d.
Which of the following accounts may be shown on the balance sheet of a state and local government but would not be shown on the balance sheet for the federal government.a. Taxes receivable.b.
Which of the following federal funds is most similar to a custodial fund used by state and local governments?a. Trust fund.b. Special fund.c. Deposit fund.d. General fund.
Which of the following is not a true statement about the difference between accounting and reporting for federal government agencies versus state and local governments?a. State and local governments
Which of the following accounts would not be considered a budgetary account?a. Other Appropriations Realized.b. Fund Balance with Treasury.c. Allotments.d. Commitments.
Which of the following is not a component of a consolidated performance and accountability report (PAR)?a. MD&A.b. The basic financial statements.c. Statistical information section.d. A transmittal
Which of the following is a correct mathematical relationship among proprietary account balances?a. Net Position equals Total Assets minus Total Liabilities.b. Fund Balance with Treasury equals
Assuming that an agency’s unused appropriations expire at year-end but appropriations continue in effect for obligated amounts (purchase orders, etc.), which of the following budgetary accounts
Which of the following is a required basic financial statement for federal agencies?a. Balance sheet.b. Statement of cash flows.c. Statement of operations.d. Statement of budgetary revenues and
Objectives that are identified by Statement of Federal Financial Accounting Concepts (SFFAC) No. 1 for federal financial reporting include all of the following excepta. Budgetary integrity.b.
Which of the following is the highest level of GAAP for the federal government?a. The FASAB’s technical bulletins.b. The FASAB’s concepts statements.c. The FASAB’s interpretations.d. The FASB
Which of the following is an important aid in assisting federal agencies in preparing their performance and accountability reports?a. Statement of Federal Financial Accounting Concepts No. 1.b.
Which of the following represents one of the roles of the Government Accountability Office in federal financial accounting and reporting?a. Providing an independent assessment of the financial
Which of the following is true regarding charity services?a. Charity service is recorded as a bad debt expense by NFP health care entities, but as a contra-revenue by government health care
An NFP hospital has determined that a portion of patient charges are implicit price concessions. The implicit price concessions would be recorded asa. a contra-revenue account reducing patient
Which of the following would be most useful for evaluating the financial profitability of a not-for-profit health care organization?a. Current ratio.b. Debt-to-capitalization.c. Excess margin.d. Debt
The Patient Protection and Affordable Care Act, passed in 2010,a. Resulted in a decrease in the number of insured patients.b. Did not impact Form 990 filings for 501(c)(3) health care
Wellness Psychiatric Clinic received a large contribution from the family of a former patient. The contribution came with a request that the funds be used or invested to support any activities that
The controller for Harris Regional Hospital, a government hospital, estimates that the uncollectible patient accounts have increased by $315,000.The increase in uncollectible patient accounts would
Why are health care organizations motivated to track the actual costs of services?a. Third-party payors contract with the organization to reimburse a set amount, and the organization risks a loss if
Which of the following is an example of an asset limited as to use?a. Real estate donated to build a clinic for the homeless.b. Contributed cash that the board is considering setting aside for
Fees received by a hospital for a “healthy heart” workshop offered to patients should be reported asa. Patient service revenue.b. Other revenue.c. Administrative service revenue.d. Nonoperating
Which of the following is a true statement regarding a performance indicator?a. All health care organizations are required to report a performance indicator.b. Only governmental health care
A not-for-profit hospital would present all of the following financial statements except aa. Balance sheet or statement of financial position.b. Statement of revenues, expenses, and changes in net
Which of the following entities would consider portions of the AICPA Audit and Accounting Guide: Health Care Entities category b authoritative guidance?a. A business-type government hospital.b. A
Which of the following is not a step in the tuition revenue recognition process for private colleges and universities?a. Identify the contract.b. Determine the transaction price.c. Estimate the
Which of the following is a performance measure of an outcome?a. Farley College students complete an undergraduate degree in an average of 4.3 years.b. A state survey of employers showed that 70
Many endowment management policies establish a spending rate for the college or university’s endowment funds. A spending rate is best defined asa. The portion of the total return that can currently
Which of the following statements is incorrect concerning the financial reports of colleges and universities?a. The NACUBO account titles are frequently used for reporting revenues and expenses by
How would a university account for funds received from an external donor that are to be retained and invested, with the related earnings restricted to the purchase of library books?a. Net position
Gresham College is a local private college. When reviewing the college’s financial reports, you would expect to see which of the following categories on its statement of financial position?a.
Last year Zelnick College showed a positive revenue over expenses number for the first time in several years. The college is funded with contributions, grants, two government appropriations (state
A university expended $2,475,000 on a new parking facility. The transaction was reported as an investing activity on its direct method statement of cash flows. What type of university prepared the
Which of the following is a true statement about tuition revenue in a college or university?a. Tuition waivers received as part of compensation should be recorded as an expense by both private and
Which of the following statements is prepared by both a private and public college or university?a. Statement of net assets.b. Statement of cash flows.c. Statement of activities.d. Statement of net
Colleges and universities look to which standard-setting body for GAAP?a. The GASB.b. The FASB.c. The NACUBO.d. It depends on whether the entity is public, private, or for-profit.
The museum of natural history is deciding whether to record its recent purchase of rare artifacts as an asset on its financial statements. Which of the following criteria must exist for the purchase
We Shelter, a nongovernmental not-for-profit organization, received a generous pledge of $1,000,000. Under which of the following donor stipulations will the pledge not be recognized in the current
Lifeworks is a nongovernmental not-for-profit organization that recently received a large gift from a donor in the amount of $5,000,000 in cash.The donor wishes to leave a legacy and therefore
On December 31, Ecology Center, a nongovernmental not-for-profit organization, received an unconditional pledge of $125,000 to be received in three years. The Ecology Center is confident that it will
Volunteers contributed services to the symphony that had a fair value of$50,000. The services provided by the volunteers did not require specialized skills. Under what condition should the symphony
A particular organization functions as an intermediary between donors and other beneficiary organizations. The intermediary organization must report contribution revenue from donors ifa. The
Save Our Beaches, an NFP organization, prepared and distributed a trifold flyer to individuals and families at White Sands Beach, a popular beach for both residents and tourists. The flyer provided
Many not-for-profit organizations attempt to classify fund-raising expenses as program services expenses by making the activities look educational in nature or advocating for the mission of the
The Maryville Cultural Center recently conducted a successful talent show in which local talent performed for a nominal prize. The talent show is an ongoing major event and is central to the
Orlando Perez, president of a local information systems company, volunteered his time to help develop software for Best Friends, a local no-kill pet shelter. The software will allow the organization
A wealthy donor promised $1 million to the local art museum to expand the size of its building, contingent on the museum obtaining a grant from the State Endowment for the Arts of at least $500,000.
In a local NFP elementary school’s statement of cash flows, a contribution restricted for use on a new building project would be reported asa. A financing activity.b. A capital and related
Jane’s Planes is an organization that provides air transportation for critically ill children. A friend of Jane’s Planes, Richard Bucks, donated a plane to be used for whatever purpose the
According to GAAP, all not-for-profit organizations are required to prepare only the following statements:a. A statement of activities, a balance sheet, and a statement of cash flows using accrual
Which of the following organizations would be considered a nongovernmental not-for-profit organization?a. An organization that provides shelter for people who have been victims of domestic violence
Which of the following is not one of the general criteria for an allowable cost?a. The cost must be adequately documented.b. The cost must be approved by an external or federal auditor.c. The cost
Which of the following costs is generally unallowable under Office of Management and Budget (OMB) cost principles?a. Depreciation.b. Use allowances.c. Employee benefits.d. Bad debt expense.
Efficiency measures, as the term is used in the service efforts and accomplishments(SEA) literature, can be described asa. Measures that relate the quantity or cost of resources used to units of
Governments that choose to report service efforts and accomplishments (SEA)a. Must adhere to GASB SEA guidance.b. Must adhere to GASB SEA guidance only if the SEA report is part of the CAFR.c. Must
Which of the following does not represent a performance measurement group under the balanced scorecard?a. Customer.b. Internal business processes.c. Economy and efficiency.d. Learning and growth.
The increase in data availability has allowed governments toa. Post large datasets online.b. Increase the use of performance measures.c. Facilitate fiscal transparency.d. All of the given statements
Enterprise risk management in governmenta. Was introduced during the Hoover Commissions.b. Often relies upon preventative and control measures to achieve entity goals.c. Facilitates goals such as
Under entrepreneurial budgeting, public administrators:a. Must justify the existence of each line-item expenditure.b. Are encouraged to look beyond typical spending-oriented budgeting to develop the
An approach to budgeting that requires the very existence of each program and the amount of resources requested to be allocated to that program to be justified each year is calleda. Incremental
The budgetary comparisons required of state and local governments under GASB standardsa. Can be presented as a schedule within required supplementary information(RSI) or as a statement in the basic
Which of the following steps would not usually be part of the budgeting process?a. Heads of operating departments prepare budget requests.b. The chief executive (mayor or city manager, as
The budgeting principle in generally accepted accounting principles (GAAP)for state and local governments states that budgetary comparisons should be presented fora. All funds of a government.b. All
Which of the following statements regarding budgets of not-for-profit organizations is true?a. Not-for-profit organization budgets are legal documents reflecting plans for spending resources.b. A
The reporting package for a single audit consists of all of the following except aa. Schedule of expenditures of federal awards.b. Summary schedule of prior audit findings.c. SFAC data collection
Using the risk-based approach for selecting major programs for audit during a single audit, an auditora. Classifies low-risk Type A programs as those programs with awards less than $750,000.b.
When evaluating nonaudit services that may impact auditor independence, each of the following routine services is acceptable under GAGAS excepta. Deciding which of an outside third party’s
Supplementary information presented with government financial statementsa. Is awarded the same audit procedures as basic financial statement information.b. Receives different audit attention when
Dan Cole is the head of the county’s Division of Animal Control. The division receives funding from both the state and federal governments and is required to have its audit under GAGAS. You and Dan
An auditor must audit as a major programa. All Type A programs, unless the auditor has identified one as low risk.b. All Type A programs, including those the auditor considers low-risk programs.c.
Under the GASB reporting model, materiality is determineda. For opinion units.b. At the government-wide level.c. At the fund level.d. For governmental and business-type activities and the aggregate
Single audits performed pursuant to OMB’s Uniform Guidancea. Apply to all entities that receive $750,000 or more of federal funds in a fiscal year.b. Apply to not-for-profit organizations only.c.
An additional auditing standard imposed by GAGAS when compared to GAAS isa. The auditor must pinpoint the criteria, condition, cause, and effect of findings to the extent that these elements are
The GAGAS conceptual framework for independence should be employeda. Annually.b. At the end of the audit engagement, just prior to issuing the audit report.c. Prior to accepting a nonaudit service
As executive director of a small not-for-profit, Paula Pascal has engaged an auditor to assess the cash receipts process for donations. The objective is to obtain recommendations, rather than an
A government audit opinion is expressed fora. All CAFR content.b. The government-wide financial statements.c. Specified opinion units.d. All fund financial statements.
Under the hierarchy of GAAP for a state and local government, which of the following has the highest level of authority?a. AICPA literature if specifically made applicable to state and local
What is Electronic Municipal Market Access, or EMMA?a. A library-based service that provides information about state and local governments that have issued debt.b. A fee-based service that provides
Which of the following factors is not considered by the rating agencies when conducting a ratings assessment?a. The entity’s demographics.b. The entity’s debt and other obligations.c. The
Which of the following could be viewed as a signal of increasing fiscal stress?a. Increasing education level.b. Increasing number of households at the poverty level.c. Increasing population age.d.
Which of the following would be considered a negative indicator when conducting a financial analysis?a. Property values that have remained unchanged over the last three years.b. An increase in
Which of the following statements concerning the revenues/expenditures ratio is correct?a. A ratio of 1.1 is an indicator of very strong performance.b. A ratio of 1.1 is an indicator of weak
When interpreting the debt service percent (ratio), which of the following statements is a correct interpretation?a. A value of 25 percent is considered a warning sign related to fiscal stress.b. A
When interpreting the fund balances measure, which of the following is correct?a. A ratio of 5 percent or better is considered adequate.b. A ratio of 15 percent is considered strong.c. A ratio of
Rating agencies, such as FitchRatings, Moody’s Investor Service, KBRA, and Standard & Poor’s, produce bond ratings thata. Are created using the exact same measures and weights.b. Allow users to
Which of the following conditions could signal decreasing fiscal stress?a. Increasing unemployment.b. Decreasing property values.c. Increasing revenues relative to expenditures.d. Increasing levels
Which of the following would be an effective means of benchmarking?a. Comparing a city’s key ratios to those of special purpose governments in the area.b. Comparing current-period ratios to
Which of the following environmental factors impacts the demand for services and the government’s ability to provide services?a. Community needs and resources.b. Political culture.c.
According to the ICMA, which of the following comprises financial condition?a. Cash solvency and budgetary solvency.b. Cash solvency, budgetary solvency, long-term solvency, and servicelevel
Why does the GASB prefer to use the term economic condition rather than financial condition?a. Economic condition considers the probability that the government will meet both financial and service
Which of the following terms or concepts focuses primarily on a government’s ability to generate enough revenues to cover expenditures without incurring a deficit?a. Interperiod equity.b. Financial
Evaluation of government financial performance is important for which of the following reasons?a. Credit analysts use it to determine whether bonds should be issued.b. Investors use it to make
Which of the following statements concerning popular reports is true?a. Similar to the CAFR, the reports are subject to audit.b. Information presented in popular reports is a simple summary of the
The GASB Financial Reporting Project has the potential to primarily do which of the following?a. Affect how governmental funds are reported.b. Affect how governmental activities are reported.c.
The city manager set aside $100,000 during the current fiscal year to extend the city’s bike trails during the next fiscal year. How would the fund balance be classified for the $100,000 at the end
A city established a special revenue fund for federal Department of Transportation funds that are to be used for street construction, maintenance, and repair. How would the fund balance for the
A positive unassigned fund balance can be found in which of the following funds?a. Special revenue fund.b. Debt service fund.c. General fund.d. All of the above.
Which of the following would not be included as a reconciling item in reconciling the governmental funds statement of revenues, expenditures, and changes in fund balances to the government-wide
What are intra-entity transactions?a. Nonexchange transactions between a primary government and its component units.b. Exchange or nonexchange transactions between a primary government and its
Which of the following require a statement of changes in net position?a. Fiduciary funds.b. Government-wide financial statements.c. All governmental funds.d. Both proprietary funds and fiduciary

Showing 1 - 100 of 1215