Accounting for Government and Non-Profit Organizations
Exam Solutions
Course Introduction
This course explores the distinctive principles and practices of accounting within governmental entities and non-profit organizations. Students will examine fund accounting, budgeting, financial reporting, and regulatory requirements unique to the public sector and non-profit institutions. The curriculum emphasizes the preparation and analysis of financial statements, the accountability concept, management of restricted resources, and compliance with standards issued by governing bodies such as the Governmental Accounting Standards Board (GASB) and Financial Accounting Standards Board (FASB). Case studies and practical examples provide opportunities to apply these concepts to real-world scenarios relevant to governmental units, charities, foundations, and similar organizations.
Recommended Textbook
Advanced Accounting 9th Edition by Joe Ben Hoyle
Available Study Resources on Quizplus
19 Chapters
1679 Verified Questions
1679 Flashcards
Source URL: https://quizplus.com/study-set/3647 Page 2
Chapter 1: The Equity Method of Accounting for Investments
Available Study Resources on Quizplus for this Chatper
118 Verified Questions
118 Flashcards
Source URL: https://quizplus.com/quiz/72552
Sample Questions
Q1) What amount of equity income would Starge have recognized in 2008 from its ownership interest in Ticker?
A)$19,792.
B)$27,640.
C)$22,672.
D)$24,400.
E)$21,748.
Answer: C
Q2) What is the amount of the excess of purchase price over book value?
A)$(1,000,000).
B)$400,000.
C)$800,000.
D)$1,000,000.
E)$1,100,000.
Answer: E
Q3) What argument could be made against the equity method?
Answer: An argument could be made against the recognition of income under the equity method.The investor is required to recognize its share of the investee's income even when it is unlikely that the investor will ever receive all of this amount in cash dividends.
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Consolidation of Financial Information
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/72541
Sample Questions
Q1) What are the three departures from SFAS 141 according to SFAS 141(R)Business Combinations?
Answer: The acquisition method embraces a fair value concept as measured by the fair value of consideration transferred as opposed to a cost-based measure.This requires three departures:(1)Direct combination costs are expensed as incurred (and not considered a part of the investment cost); (2)Contingent consideration obligations are recognized as part of the purchase price;and (3)When a bargain purchase occurs,the acquirer measures and recognizes the fair values of each of the assets acquired and liabilities assumed at the date of the combination,and as a result no assets or liabilities are recorded at amounts below their assessed fair values as under SFAS 141.A gain on the bargain purchase is recognized at the acquisition date.
Q2) How are stock issuance costs accounted for in a business combination that is not a pooling of interests?
Answer: Stock issuance costs reduce the balance in Additional Paid-In Capital in a business combination that is not a pooling of interests.
Q3) What term is used to refer to a business combination in which only one of the original companies continues to exist?
Answer: The appropriate term is statutory merger.
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Consolidations - Subsequent to the Date of Acquisition
Available Study Resources on Quizplus for this Chatper
122 Verified Questions
122 Flashcards
Source URL: https://quizplus.com/quiz/72540
Sample Questions
Q1) Under SFAS 141(R),what will Beatty record as the acquisition price on January 1,2009?
A)$500,000.
B)$503,461.
C)$512,000.
D)$515,461.
E)$526,500.
Answer: B
Q2) Which of Pritchett's reporting units require both steps to test for goodwill impairment?
Answer: Goodwill Impairment Test-Step 1
11ea88ab_df39_2262_bb89_fb9e4c0aa617_TB4174_00 Therefore,the Apple and the Carrot reporting units require both steps to test for goodwill impairment.
Q3) What is the basic objective of all consolidations?
Answer: The basic objective of all consolidations is to combine asset,liability,revenue,expense,and stockholders' equity accounts in a manner consistent with the concepts of the acquisition method,purchase method (pre-2009 transactions),or the pooling of interests method (pre-2000 transactions).
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Consolidated Financial Statements and Outside Ownership
Available Study Resources on Quizplus for this Chatper
51 Verified Questions
51 Flashcards
Source URL: https://quizplus.com/quiz/72539
Sample Questions
Q1) What amount should have been reported for the land on a consolidated balance sheet,according to SFAS 141(R),using the acquisition method?
A)$70,000
B)$75,000
C)$85,000
D)$92,500
E)$100,000
Q2) In consolidation,the total amount of expenses related to Kailey and to Denber's acquisition of Kailey for 2009 is determined to be
A)$206,667
B)$211,667
C)$221,667
D)$620,000
E)$635,000
To view all questions and flashcards with answers, click on the resource link above.
6
Chapter 5: Consolidated Financial StatementsIntercompany Asset Transactions
Available Study Resources on Quizplus for this Chatper
114 Verified Questions
114 Flashcards
Source URL: https://quizplus.com/quiz/72538
Sample Questions
Q1) Compute Stark's reported gain or loss relating to the land for 2011.
A)$5,000 loss.
B)$5,000 gain.
C)$7,000 loss.
D)$7,000 gain.
E)$0.
Q2) Prepare any 2010 consolidation worksheet entries that would be required for this inventory transfer.
Q3) With regard to the intercompany sale,which of the following choices would be a debit entry in the consolidated worksheet for 2009?
A)Retained earnings.
B)Cost of goods sold.
C)Inventory.
D)Investment Fisher Company.
E)Additional paid-in capital.
Q4) On April 7,2009,Pate Corp.sold land to Shannahan Co. ,its subsidiary.From a consolidated point of view,when will the gain on this transfer actually be earned?
Q5) How is the gain on an intercompany transfer of a depreciable asset realized?
Q6) How is the gain on an intercompany transfer of land realized?
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Variable Interest Entities, intercompany Debt,
Statement of Cash Flows, and Other Issues
Available Study Resources on Quizplus for this Chatper
115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/72537
Sample Questions
Q1) If a subsidiary issues additional common shares at below book value to outsiders,which of the following statements is true?
A)The parent's additional paid-in capital will be increased.
B)The parent's investment in subsidiary will be increased.
C)The parent's retained earnings will be increased.
D)The parent's additional paid-in capital will be decreased.
E)The parent's retained earnings will be decreased.
Q2) Vontkins Inc.owned all of Quasimota Co.The subsidiary had bonds payable outstanding on January 1,2009,with a book value of $265,000.The parent acquired the bonds on that date for $288,000.Subsequently,Vontkins reported interest income of $25,000 in 2009 while Quasimota reported interest expense of $29,000.Consolidated financial statements were prepared for 2010.What adjustment would have been required for the retained earnings balance as of January 1,2010?
A)reduction of $27,000.
B)reduction of $4,000.
C)reduction of $19,000.
D)reduction of $30,000.
E)reduction of $20,000.
Q3) What is the amount of goodwill resulting from this acquisition?
Page 8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: Consolidated Financial Statements - Ownership
Patterns and Income Taxes
Available Study Resources on Quizplus for this Chatper
115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/72536
Sample Questions
Q1) The accrual-based income of Beagle Co.is calculated to be
A)$706,670.
B)$755,980.
C)$805,280.
D)$838,150.
E)$815,770.
Q2) The accrual-based income of Maroon Corp.is calculated to be
A)$481,600.
B)$472,700.
C)$488,900.
D)$502,300.
E)$358,800.
Q3) Which of the following is not an advantage of filing a consolidated income tax return?
A)The existence of unrealized losses in ending inventory.
B)The ability to use net operating losses of one company to offset profits of another company.
C)The deferral of unrealized gains.
D)Transfers of inventory at a transfer price above cost.
E)Intercompany dividends are not taxable.
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Segment and Interim Reporting
Available Study Resources on Quizplus for this Chatper
114 Verified Questions
114 Flashcards
Source URL: https://quizplus.com/quiz/72535
Sample Questions
Q1) What is the minimum amount of profit or loss that each of these segments must earn to be considered separately reportable?
A)$769,263.
B)$812,000.
C)$854,737.
D)$897,000.
E)$833,368.
Q2) Prepare the profit or loss test to determine which of these segments was separately reportable.
Q3) Assuming Baker makes the change in the first quarter of 2008,how much is reported as net income for the first quarter of 2008?
A)$492,000.
B)$494,800.
C)$500,000.
D)$505,200.
E)$527,950.
Q4) What is the major objective of segment reporting?
Q5) Compute the after-tax effect of Harrison's change in inventory method.
Q6) What is meant by the term,disaggregated financial information?
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Foreign Currency Transactions and Hedging
Foreign Exchange Risk
Available Study Resources on Quizplus for this Chatper
90 Verified Questions
90 Flashcards
Source URL: https://quizplus.com/quiz/72534
Sample Questions
Q1) What amount will Coyote Corp.report on its 2009 financial statements for Cost of Goods Sold?
Q2) A U.S.company sells merchandise to a foreign company denominated in U.S.dollars.Which of the following statements is true?
A)If the foreign currency appreciates,a foreign exchange gain will result.
B)If the foreign currency depreciates,a foreign exchange gain will result.
C)No foreign exchange gain or loss will result.
D)If the foreign currency appreciates,a foreign exchange loss will result.
E)If the foreign currency depreciates,a foreign exchange loss will result.
Q3) The forward rate may be defined as
A)The price a foreign currency can be purchased or sold today.
B)The price today at which a foreign currency can be purchased or sold in the future.
C)The forecasted future value of a foreign currency.
D)The U.S.dollar value of a foreign currency.
E)The Euro value of a foreign currency.
Q4) Assuming this is a cash flow hedge,prepare journal entries for this sales transaction and forward contract.
Q5) What factors create a foreign exchange gain?
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Translation of Foreign Currency Financial Statements
Available Study Resources on Quizplus for this Chatper
94 Verified Questions
94 Flashcards
Source URL: https://quizplus.com/quiz/72551
Sample Questions
Q1) When translating Quadros' financial statements,which of the following statements is true?
A)There will be a remeasurement gain reported on the consolidated income statement.
B)There will be a remeasurement loss reported on the consolidated income statement.
C)There will be a positive cumulative translation adjustment reported on the consolidated balance sheet.
D)There will be a positive cumulative translation adjustment reported on the consolidated income statement.
E)There will be a transaction gain reported on the consolidated income statement.
Q2) A highly inflationary economy is defined as
A)Cumulative 5-year inflation in excess of 100%.
B)Cumulative 3-year inflation in excess of 100%.
C)Cumulative 5-year inflation in excess of 90%.
D)Cumulative 3-year inflation in excess of 90%.
E)Any country designated as a company operating in an underworld economy.
Q3) What is the justification for the remeasurement of foreign currency transactions?
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Worldwide Accounting Diversity and International Accounting Standards
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/72550
Sample Questions
Q1) Which of the following items is not one of the ten accounting issues most commonly requiring adjustments in foreign reconciliations to U.S.GAAP?
A)Foreign currency translation.
B)Depreciation expense.
C)Deferred taxes.
D)Gain/loss on disposal of assets.
E)Interest expense.
Q2) What are the two major types of legal systems used around the world?
Q3) Which of the following is not a factor influencing a country's financial reporting practices?
A)Providers of financing.
B)Inflation.
C)Legal system.
D)Gross National Product.
E)Political and economic ties.
Q4) What are the three authoritative pronouncements that make up the International Financial Reporting Standards (IFRSs)?
Q5) What is the IOSCO?
Q6) What were the major objectives of the Treaty of Rome?
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Financial Reporting and the Securities and Exchange Commission
Available Study Resources on Quizplus for this Chatper
74 Verified Questions
74 Flashcards
Source URL: https://quizplus.com/quiz/72549
Sample Questions
Q1) Overruling the FASB.
A)1 and 4.
B)1,3,and 4.
C)1 and 3.
D)1,2,and 4.
E)1,2,3,and 4.
Q2) What is required by the Trust Indenture Act of 1939?
Q3) What is private placement of securities?
A)a procedure that allows a company to register securities and then sell them over a period of two years without reregistering.
B)a procedure that allows the sale of securities to a small group of knowledgeable investors without any general solicitation.
C)a method of filing Form 10-K with the SEC.
D)the registration of mutual funds that engage in investing and trading securities.
E)a sale of securities to 35 or fewer accredited investors.
Q4) How has the Sarbanes-Oxley Act of 2002 changed the role of the audit committee?
Q5) What was the purpose of the Securities Act of 1933?
Page 14
Q6) What information is required in proxy statements?
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: Accounting for Legal Reorganizations and Liquidations
Available Study Resources on Quizplus for this Chatper
82 Verified Questions
82 Flashcards
Source URL: https://quizplus.com/quiz/72548
Sample Questions
Q1) What official accounting pronouncement provides guidance for the preparation of financial statements during a reorganization?
Q2) How much will be paid to the holder of the note payable secured by the land and building?
(Round your payout percentage to the nearest whole number. )
Q3) Total payment on partially secured debt is calculated to be what amount?
Q4) What occurs in the accounting records for fresh start accounting when a bank agrees to accept less than the debtor's book value of a note payable?
Q5) Compute the amount of unsecured liabilities without priority.
Q6) Compute the amount of free assets after payment of liabilities with priority.
Q7) What is the purpose of Chapter 7 of the Bankruptcy Reform Act?
Q8) What is meant by a "fully secured liability"?
Q9) Lawyer's fees incurred during a reorganization are accounted for with a debit to A)an expense.
Page 15
B)an intangible asset,Reorganization Cost,which would normally be amortized over a five-year period.
C)additional paid-in capital.
D)retained earnings.
E)a liability.
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 14: Partnerships: Formation and Operation
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/72547
Sample Questions
Q1) What theoretical argument could be made against the recognition of goodwill when there is a change in the ownership of a partnership?
Q2) Roberts retires and is paid $160,000 based on the terms of the original partnership agreement.If the goodwill method is used,what is the capital balance of Dana?
A)$20,000.
B)$60,000.
C)$110,000.
D)$120,000.
E)$230,000.
Q3) Reed,Sharp,and Tucker were partners with capital account balances of $80,000,$100,000,and $70,000,respectively.They agreed to admit Upton to the partnership.Upton purchased 30% of each partner's interest,with payments to Reed,Sharp,and Tucker of $32,000,$40,000,and $28,000,respectively.Before the admission of Upton,the profit and loss sharing ratio was 2:3:2.The partners agreed to use the bonus method to account for the admission of Upton to the partnership. Required:
Prepare the journal entry to record the admission of Upton to the partnership.
Q4) By what methods can a person gain admittance to a partnership?
To view all questions and flashcards with answers, click on the resource link above.
Page 17
Chapter 15: Partnerships: Termination and Liquidation
Available Study Resources on Quizplus for this Chatper
73 Verified Questions
73 Flashcards
Source URL: https://quizplus.com/quiz/72546
Sample Questions
Q1) White,Sands,and Luke has the following capital balances and profit and loss ratios; $50,000 (30%),$100,000 (20%)and $200,000 (50%).If the partnership is to be liquidated and $150,000 becomes available for the partners immediately,who gets the money?
A)$0 White;$57,143 Sands;$92,857 Luke.
B)$10,000 White;$47,143 Sands;$92,857 Luke.
C)$0 White;$47,143 Sands;$102,857 Luke.
D)$20,000 White;$57,143 Sands;$82,857 Luke.
E)$30,857 White;$57,143 Sands;$62,000 Luke.
Q2) A local partnership has assets of cash of $5,000 and a building worth $80,000.All liabilities have been paid and the partners are all insolvent.The partners capital accounts are as follows Harry $40,000,Landers $30,000 and Waters 15,000.The partners share profits and losses 4:4:2.If the building is sold for $50,000,how much cash will Waters receive in the final settlement?
A)$5,000.
B)$9,000.
C)$18,000.
D)$28,000.
E)$55,000.
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 16: Accounting for State and Local Governments,
Part I
Available Study Resources on Quizplus for this Chatper
72 Verified Questions
72 Flashcards
Source URL: https://quizplus.com/quiz/72545
Sample Questions
Q1) Fiduciary funds are
A)Funds used to account for the activities of a government that are carried out primarily to provide services to citizens.
B)Funds used to account for a government's ongoing organizations and activities that are similar to those operated by for-profit organizations.
C)Funds used to account for monies held by the government in a trustee capacity.
D)Funds used to account for all financial resources except those required to be accounted for in another fund.
E)Funds used to account for revenues that have been legally restricted as to expenditure.
Q2) Under modified accrual accounting,when are expenditures recorded?
Q3) What is the primary difference between monies accounted for in the general fund and monies accounted for in the special revenue fund?
Q4) What organization is responsible for establishing accounting principles for governmental entities? By whom was this organization established?
Q5) When should property taxes be recognized under modified accrual accounting?
Q6) What are the five types of governmental funds?
Page 19
To view all questions and flashcards with answers, click on the resource link above.
Chapter 17: Accounting for State and Local
Governments,part II
Available Study Resources on Quizplus for this Chatper
53 Verified Questions
53 Flashcards
Source URL: https://quizplus.com/quiz/72544
Sample Questions
Q1) A city starts a solid waste landfill during 2007.When the landfill was opened the city estimated that it would fill to capacity within 5 years and that the cost to cover the facility would be $1.5 million which will not be paid until the facility is closed.At the end of 2007,the facility was 20% full,and at the end of 2008 the facility was 45% full.On government-wide financial statements,which of the following are the appropriate amounts to present in the financial statements for 2008?
A)Both expense and liability will be zero
B)Expense will be $300,000 and liability will be $600,000.
C)Expense will be $600,000 and liability will be $600,000.
D)Expense will be $675,000 and liability will be $600,000.
E)Expense will be $375,000 and liability will be $675,000.
Q2) Jones College,a public institution of higher education,must prepare financial statements
A)As if the college was an enterprise fund.
B)Following the same rules as state and local governments.
C)According to GAAP.
D)As if the college was a fiduciary fund.
E)In the same manner as private colleges and universities.
Q3) What is meant by the term fiscally independent?
Page 20
To view all questions and flashcards with answers, click on the resource link above.
Chapter 18: Accounting for Not-For-Profit Organizations
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/72543
Sample Questions
Q1) In accruing patient charges for the current month,which one of the following accounts should a hospital credit?
A)Accounts Payable.
B)Deferred Revenue.
C)Unearned Revenue.
D)Patient Service Revenues.
E)Accounts Receivable.
Q2) Which entry would be the correct entry on the donor's books to record a gift to a not-for-profit organization whenthe donor relinquishes control of the asset?
A)debit expense-charitable contribution,credit cash.
B)debit refundable advance to charity,credit cash.
C)debit charitable pledge,creditcash.
D)debit cash,creditliability to beneficiary.
E)debit cash,credit refundable advance.
Q3) The Home incurred the following liabilities: $110,000 salaries,$30,000 medical equipment,$10,000 utilities expense. Prepare the journal entries for these transactions.
Q4) Give several examples of voluntary health and welfare organizations.
Q5) What should Dura Foundation report as program service expenses?
To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 19: Accounting for Estates and Trusts
Available Study Resources on Quizplus for this Chatper
74 Verified Questions
74 Flashcards
Source URL: https://quizplus.com/quiz/72542
Sample Questions
Q1) A gift that is specified in a will as "I leave my collection of baseball cards to my son" is a
A)general legacy.
B)specific legacy.
C)demonstrative legacy.
D)residual legacy.
E)devise.
Q2) Prepare the journal entry to record ordinary repairs to the rental property of $5,000.
Q3) Funeral expenses of $26,000 were paid.
Prepare the journal entry to record the transaction.
Q4) Cash of $195,000 was conveyed to the appropriate beneficiary. Prepare the journal entry to record the transaction.
Q5) In a will,a devise is a
A)gift of personal property that is directly identified.
B)cash gift from a particular source.
C)gift of estate property that remains after carrying out the other provisions of the will.
D)gift of real property.
E)gift of intangible property.
To view all questions and flashcards with answers, click on the resource link above.
Page 22