Accounting for Governmental and Nonprofit Entities
Exam Materials
Course Introduction
This course provides an in-depth examination of accounting principles, standards, and procedures applicable to governmental and nonprofit organizations. It covers the unique financial reporting requirements imposed by authoritative bodies such as the Governmental Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB) for these entities. Topics include fund accounting, budgetary controls, taxation, grant and donation reporting, and the preparation and interpretation of financial statements specific to public sector and nonprofit environments. Attention is also given to issues of accountability, stewardship, and compliance with laws and regulations that impact fiscal management and transparency in governmental and nonprofit operations.
Recommended Textbook
Introduction to Governmental and Not for Profit Accounting 7th Edition by Patton
Available Study Resources on Quizplus
15 Chapters
538 Verified Questions
538 Flashcards
Source URL: https://quizplus.com/study-set/3884
Page 2
Chapter 1: Governmental and Not-For-Profit
Available Study Resources on Quizplus for this Chatper
17 Verified Questions
17 Flashcards
Source URL: https://quizplus.com/quiz/77373
Sample Questions
Q1) Concepts statements issued by the GASB and the FASAB emphasize which of the following objectives of governmental financial reporting?
A)It should help the chief executive assess the entity's financial condition.
B)It should help department heads assess their department's results of operations.
C)It should help the judiciary determine whether the government has complied with the law.
D)It should help report users assess accountability.
Answer: D
Q2) An activity that is unique to governments is
A)Budgeting
B)Cash management
C)Levying taxes
D)Advertising
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
3
Chapter 2: The Use of Funds in Governmental Accounting
Available Study Resources on Quizplus for this Chatper
49 Verified Questions
49 Flashcards
Source URL: https://quizplus.com/quiz/77372
Sample Questions
Q1) Which of the following are fiduciary-type funds?
A)Pension Trust Fund,Agency Fund,and Permanent Fund
B)Investment Trust Fund,Special Revenue Fund,and Internal Service Fund
C)Agency Fund,Internal Service Fund,and Pension Trust Fund
D)Pension Trust Fund,Investment Trust Fund,and Agency Fund
Answer: D
Q2) A municipal government decides to construct and operate a public swimming pool.It will charge user fees to recover its costs,but will allow senior citizens and children under the age of three to enter at half-price.What type of fund should it use for this purpose?
A)Special Revenue Fund
B)Enterprise Fund
C)Agency Fund
D)Private Purpose Fund
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Budgetary Considerations in Governmental Accounting
Available Study Resources on Quizplus for this Chatper
28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/77371
Sample Questions
Q1) The legal level of budgetary control is best described as
A)the maximum amount that can be spent without incurring an unfavorable variance
B)the classification or subclassification at which expenditures cannot exceed appropriations
C)the status of the budget officer within the hierarchy of top government officials
D)the sum of favorable budget variances minus the sum of unfavorable budget variances
Answer: B
Q2) The City of Kent has estimated that it will spend $4,500,000 and have revenues of $4,800,000 next year.At the beginning of its new fiscal year,it will need to:
A)debit estimated expenditures for $4,500,000
B)debit estimated revenues for $4,800,000
C)debit budgetary fund balance for $300,000
D)debit appropriations for $4,500,000
E)none of the above.
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
5
Chapter 4: The Governmental Fund Accounting Cycle
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/77370
Sample Questions
Q1) The City of Watsonville places a purchase order for street maintenance supplies of $56,000.This would result in:
A)a debit to expenditures-street maintenance supplies
B)a debit to encumbrances-street maintenance supplies
C)a credit to assigned fund balance
D)a credit to vouchers payable
Q2) Which line item does not properly appear in the Statement of Revenues,Expenditures,and Changes in Fund Balance (operating statement)of a governmental fund?
A)expenditures--debt service
B)expenditures--capital outlay
C)property taxes receivable
D)beginning fund balance
Q3) Which of the following accounts properly would not appear in the General Fund's closing entry at fiscal year end?
A)revenues
B)fund balance
C)taxes receivable
D)expenditures
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: The Governmental Fund Accounting Cycle
Available Study Resources on Quizplus for this Chatper
47 Verified Questions
47 Flashcards
Source URL: https://quizplus.com/quiz/77369
Sample Questions
Q1) Which of the following best describes an assignment of fund balance?
A)it is a government's intent to spend resources for specific purposes
B)it is another term for a budgetary fund balance reserved for encumbrances
C)it is constrained as a result of a formal action by a government's legislative body
D)it is a legal segregation of fund balance,and must be used for the purpose assigned
Q2) Governmental fund liabilities are:
A)claims against current financial resources
B)obligations not currently payable
C)both a and b
D)none of the above
Q3) The General Fund lends cash at the beginning of the year to an Enterprise Fund,expecting to be repaid before the end of the year.What account should be debited in the General Fund?
A)transfer out to enterprise fund
B)due from enterprise fund
C)other financing uses - enterprise fund
D)expenditures - enterprise fund loans
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: The Governmental Fund Accounting Cycle
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/77368
Sample Questions
Q1) Capital assets that were financed through governmental fund activities will appear in which financial statement?
A)government-wide statement of net assets
B)capital projects fund balance sheet
C)debt service fund balance sheet
D)enterprise fund balance sheet
Q2) Which of the following groups of accounts best describes the types of assets and liabilities likely to be found in Capital Projects Funds?
A)cash,investments,construction contract payable,matured bonds payable
B)cash,buildings,equipment,construction contracts payable
C)cash,investments,construction contracts payable,vouchers payable,long-term debt payable
D)cash,investments,retainage payable,vouchers payable
Q3) Based on the preceding set of facts,how much should be reported as Revenues in the Capital Projects Fund?
A)$100,000
B)$2,100,000
C)$3,100,000
D)$8,100,000
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: The Governmental Accounting Cycle
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/77367
Sample
Questions
Q1) Enterprise Fund accounting and reporting is required when an activity is financed with debt secured solely by a pledge of the net revenue from fees and charges.This type of debt typically takes the form of what?
A)revenue bonds
B)general obligation revenue bonds
C)revenue anticipation notes
D)private placements
Q2) In establishing prices for its services,which of the following practices is the least appropriate for an Internal Service Fund?
A)price at less than cost
B)price at cost only
C)price at cost plus an amount for anticipated inflation of equipment costs
D)price at cost plus an amount for depreciation of equipment purchased with a transfer of cash from the General Fund
Q3) Which basis of accounting is used by Enterprise Funds?
A)full accrual
B)modified accrual
C)cash
D)modified cash
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: The Governmental Fund Accounting
Cycle--Fiduciary
Funds
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/77366
Sample Questions
Q1) What is the distinction between Private Purpose Trust Funds and Permanent Funds?
A)Private Purpose Trust Funds account on the modified accrual basis;Permanent Funds account on the full accrual basis
B)The beneficiaries of Private Purpose Trust Funds are "outside" the government;the beneficiaries of Permanent Funds are the reporting government or its citizenry
C)Private Purpose Trust Funds are governmental fund types;Permanent Funds are fiduciary fund types
D)Investments of Private Purpose Trust Funds are valued at cost;investments of Permanent Funds are valued at fair value
Q2) In the statement of fiduciary net position prepared for an Investment Trust Fund,how should the equity of the participants in the investment pool be characterized? A)as fund balance
B)as retained earnings
C)as the excess of additions over deductions
D)as net position held in trust
To view all questions and flashcards with answers, click on the resource link above.
10
Chapter 9: Reporting Principles and Preparation of Fund
Financial Statements
Available Study Resources on Quizplus for this Chatper
41 Verified Questions
41 Flashcards
Source URL: https://quizplus.com/quiz/77365
Sample Questions
Q1) Which information must be presented in budgetary comparison schedules?
A)only the original appropriated budget
B)only the final appropriated budget
C)both the original appropriated budget and the final appropriated budget
D)both the original budget submitted by the chief executive officer and the first budget approved by the legislative body
Q2) Which of the following financial statements is not required to be prepared for proprietary funds in the fund-level financial statements?
A)Statement of net position (or balance sheet)
B)Statement of revenues,expenses,and changes in fund net assets
C)Statement of revenues,expenditures,and changes in fund balances
D)Statement of cash flows
Q3) The financial statements prepared for fiduciary funds are
A)statement of fiduciary net position
B)statement of changes in fiduciary net position
C)statement of fiduciary cash flows
D)only a and b
E)only b and c
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Government-Wide Financial Statements
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/77364
Sample Questions
Q1) Westenhover City is a municipality that has governmental activities,business-type activities,a discrete component unit,and a blended component unit.Which of the following would not properly appear as a specific line item in Westenhover City's government-wide statement of net position?
A)revenues of the blended component unit
B)revenues of the discrete component unit
C)revenues of the governmental activities
D)revenues of the business-type activities
Q2) A city experienced several auto damage claims during its year ended December 31,2012.The total amount claimed was $600,000.No cash was paid out in 2012.However,claims totaling $200,000 were settled by December 31,2012.These claims were settled for $80,000,and were scheduled for payment on January 15,2013.City attorneys felt that the remaining $400,000 of claims could be settled during 2013 for about $160,000.How much should the city recognize as claims expenses in its government-wide financial statements for 2012?
A)$0
B)$80,000
C)$240,000
D)$480,000
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Federal Government Accounting and Reporting
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/77363
Sample Questions
Q1) In the federal government,which organizations make appropriations and which make apportionments?
A)The Congress makes appropriations,and department heads apportion the appropriations to individual agencies or divisions within the department.
B)The Congress makes appropriations,and the Treasury Department appropriates to individual departments the total amount apportioned by the Congress.
C)The President makes appropriations,and department heads periodically apportion parts of the appropriations to agencies in the department.
D)The Congress makes appropriations,and the Office of Management and Budget periodically apportions parts of the appropriations to departments.
Q2) What is the name of the entity that recommends accounting standards for the federal government?
A)the Governmental Accounting Standards Board
B)the Federal Accounting Standards Advisory Board
C)the Financial Accounting Standards Board
D)the American Institute of Certified Public Accountants
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Accounting for Not-For-Profit Organizations
Available Study Resources on Quizplus for this Chatper
43 Verified Questions
43 Flashcards
Source URL: https://quizplus.com/quiz/77362
Sample Questions
Q1) Not-for-profit colleges and universities are required to follow the accounting standards of which standard-setting body?
A)FASB
B)GASB
C)GASAC
D)FASAB
Q2) A not-for-profit museum owns a building and a large collection of art works.Both the building and the art works are capitalized on the entity's statement of financial position.What is the general rule regarding depreciation of the building and the art works?
A)The building must be depreciated,but the art works cannot be depreciated.
B)Both the building and the art works must be depreciated.
C)Neither the building nor the art works can be depreciated.
D)The building must be depreciated,but the art works need not be depreciated if the collection meets the three criteria established by the FASB.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: Accounting for Health Care Organizations
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/77361
Sample Questions
Q1) Catlett County Hospital,a governmental hospital,has its financial statement audit done by a local CPA firm.In 2012,the CPA firm announced that it would no longer charge for the audit.How is the County Hospital required to report the donated audit in 2013,assuming that it would have been billed $20,000 for the audit and that the cost incurred by the CPA firm is estimated at $11,000?
A)Report contribution revenue of $20,000 and audit fees of $11,000
B)Report contribution revenue of $0 and audit fees of $0
C)Report contribution revenue of $20,000 and audit fees of $20,000
D)Report contribution revenue of $11,000 and audit fees of $11,000.
Q2) The difference between a hospital's established billing rate and the amount paid by a third-party payer is referred to as:
A)a bad debt
B)a capitation agreement
C)a charity allowance
D)a contractual adjustment
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Analysis of Financial Statements and Financial Condition
Available Study Resources on Quizplus for this Chatper
27 Verified Questions
27 Flashcards
Source URL: https://quizplus.com/quiz/77360
Sample Questions
Q1) What is the major purpose of the statement of net position from a financial analysis perspective?
A)to describe the major sources of revenue and types of expense
B)to show the inflows and outflows of cash during the reporting period
C)to show whether the entity was efficient and effective in delivering services
D)to provides information about the entity's liquidity and financial flexibility
Q2) What information could a financial analyst potentially obtain by reviewing the statement of activities?
A)whether the resources obtained during the year were sufficient to cover the cost of providing services
B)whether services provided were sufficient for the government's constituencies
C)the current financial condition of a government
D)the current status of a government's assets and liabilities
Q3) Which of the following items should be excluded from the assets or liabilities when computing the quick ratio?
A)inventories
B)amount of long-term debt due in the following year
C)accounts payable
D)cash equivalents
Page 16
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Fundamentals of Accounting
Available Study Resources on Quizplus for this Chatper
29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/77359
Sample Questions
Q1) Alberta's Appliances is a wholesaler that sells to retail stores on credit.Alberta's sales for the year were $250,000.During the year,it received payments of $220,000 from customers.At year-end,it establishes an allowance for uncollectible accounts equal to 5% of the unpaid receivables.How much should Alberta's report as net accounts receivable at December 31?
A)$30,000
B)$28,500
C)$12,500
D)$11,000
Q2) Robert Plant invests $50,000 of his own money in a business.What journal entry should be made to record Robert's investment in the business?
A)debit cash (business);and credit cash (personal)
B)debit cash;and credit Robert Plant,capital
C)debit cash;and credit loans payable
D)debit Robert Plant,capital;and credit cash
Q3) Angel's Appliances buys four washing machines for its inventory at a price of $400 each.It makes the purchase on credit.It then sells three of the machines for cash at $550 each.Make journal entries to record these transactions.Then state how much gross profit Angel made.
To view all questions and flashcards with answers, click on the resource link above.
Page 17