Accounting for Nonprofit Organizations Review Questions
Course Introduction
Accounting for Nonprofit Organizations provides an in-depth exploration of the principles and practices unique to financial management in the nonprofit sector. The course covers fundamental topics such as fund accounting, budgeting, financial reporting, donor restrictions, and regulatory compliance. Students will learn how to prepare and analyze financial statements tailored to nonprofit entities, understand the role of audits and internal controls, and address the challenges of revenue recognition from donations, grants, and government funding. Through case studies and practical exercises, the course emphasizes the importance of transparency, accountability, and ethical stewardship in managing nonprofit resources.
Recommended Textbook
Essentials of Accounting for Governmental and Not for Profit Organizations 11th Edition by Copley
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14 Chapters
1814 Verified Questions
1814 Flashcards
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2
Chapter 1: Introduction to Accounting and Financial
Reporting for Governmental and Not-For-Profit Organizations
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134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/54919
Sample Questions
Q1) Permanent funds can be either a governmental fund or a fiduciary fund where only income on donated assets may be spent.
A)True
B)False
Answer: False
Q2) The ______ Fund accounts for and reports the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purpose other than debt service or capital projects.
A) Special revenue
B) General
C) Enterprise
D) Agency
Answer: A
Q3) Comparison of the legally approved budget with actual results of the General Fund is not part of required supplementary information in the CAFR.
A)True
B)False
Answer: False
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Chapter 2: Overview of Financial Reporting for State and Local Governments
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135 Verified Questions
135 Flashcards
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Sample Questions
Q1) Governmental fund financial statements include columns for the General Fund and all other "major" governmental funds.
A)True
B)False
Answer: True
Q2) Which of the following is true regarding the Comprehensive Annual Financial Report?
A) The basic financial statements consist of the government-wide, the governmental fund, the proprietary fund, and the fiduciary fund financial statements (and the notes to the financial statements).
B) The government-wide financial statements include the Statement of Net Assets, the Statement of Activities, and the Statement of Cash Flows.
C) Both of the above.
D) Neither of the above.
Answer: A
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Page 4
Chapter 3: Modified Accrual Accounting: Including the Role of
Fund Balances and Budgetary Authority
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) The Fire Department of a given city received an appropriation in the amount of $14,000,000 for the fiscal year ended June 30,2014.During the month ended July 31,2013,the following transactions occurred: (a)purchase orders were issued in the amount of $650,000; (b)purchase orders,related to (a)above,were filled in the amount of $610,000; the related invoice amount was $595,000; invoices were paid in the amount of $550,000; (c)salaries were accrued and paid in the amount of $600,000.The balance available for the fire department as of July 31,2013 is:
A) $12,740,000.
B) $12,800,000.
C) $12,765,000.
D) $12,840,000.
Answer: C
Q2) Which of the following items would typically not need an encumbrance?
A) New Building
B) Regular Salaries
C) New Computer
D) Office Equipment
Answer: B
Page 5
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Chapter 4: Accounting for the General and Special Revenue Funds
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) In special revenue funds,revenues are recognized when available and measurable. A)True
B)False
Q2) What is the effect on the General Fund's fund balance when capital assets are purchased during a year from General Fund revenues?
A) Fund balance is increased.
B) Fund balance is decreased.
C) There is no effect, since one asset (cash) is replaced by another (capital asset).
D) None of the above, capital assets must be purchased through a capital projects fund.
Q3) What is the difference between reciprocal interfund activity and nonreciprocal interfund activity?
Q4) What is the different accounting treatment with respect to supplies inventory using the Consumption versus the Purchases method?
Q5) Governmental fund financial statements are prepared using the accrual basis of accounting.
A)True
B)False
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Chapter 5: Accounting for Other Governmental Fund Types:
Capital Projects, Debt Service, and Permanent
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) In a Statement of Revenues,Expenditures,and Changes in Fund Balances,Transfers In are reported within Total Revenues.
A)True
B)False
Q2) What amount would be reported as debt service expenditures for 2014?
A) $162,000
B) $160,000.
C) $ 80,000.
D) Zero
Q3) Capital project funds record the proceeds of debt issued as:
A) Revenues.
B) Other Financing Sources.
C) Expenses.
D) Liabilities.
Q4) When bonds are sold to construct a capital asset through a capital projects fund,an entry would be made to debit Cash and credit Bonds Payable in the capital projects fund.
A)True
B)False
7
Q5) What is the difference between Permanent Funds and Private Purpose Trust Funds?
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Chapter 6: Proprietary Funds
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130 Verified Questions
130 Flashcards
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Sample Questions
Q1) An internal service fund provided services to a General Fund department.At the time of billing,the credit entry in the internal service fund would be:
A) Other Financing Sources-Transfers In.
B) Operating Revenues-Charges for Services.
C) Other Financing Sources-Charges for Services.
D) Due from General Fund.
Q2) Internal service funds account for
A) Activities that produce goods or services to be provided to other governmental units on a cost reimbursement basis.
B) Activities that produce goods or services to be provided to outside consumers units on a cost reimbursement basis.
C) Both A and B.
D) None of the above.
Q3) Long term debt serviced from proprietary funds is recorded in the Long Term Debt Account Group.
A)True B)False
Q4) Under GASB Statement 34,enterprise funds must be used under which circumstances?
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Chapter 7: Fiduciary Trustfunds
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154 Verified Questions
154 Flashcards
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Sample Questions
Q1) What are the required statements and schedules for a pension trust fund and in what part of the CAFR are the schedules reported?
Q2) Describe the accounting treatment of investments with determinable fair values reported in a Private-Purpose Trust Fund
Q3) When accounting for other postemployment benefits,the OPEB obligation for employees of governmental activities is:
A) Reported in the government-wide statements, but not the fund basis statements.
B) The cumulative difference between the amount funded and the annual required contribution.
C) Both A and B.
D) Neither A nor B.
Q4) If a derivative is effective in reducing a government's exposure to identifiable risks,the changes in the value of the derivative are reflected as investment gains or losses in the period that the value changes.
A)True
B)False
Q5) What is a defined benefit pension plan?
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9
Chapter 8: Government-Wide Statements, Capital Assets,
Long-Term
Debt
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) When preparing the government-wide statements,worksheet entries are made to add the balances of the fiduciary funds
A)True
B)False
Q2) In addition to the fund basis statement,GASB Statement 34 requires government-wide statements that are prepared using the accrual basis and the current financial resources measurement focus.
A)True
B)False
Q3) Using the worksheet approach,general (governmental)long term assets and long term debt have a balance of zero until the worksheet entries are made.
A)True
B)False
Q4) General long-term debt,to be paid out of resources of the government's taxing power,is reported in both the governmental fund Balance Sheet and the government-wide Statement of Net Assets.
A)True
B)False
Page 10
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Chapter 9: Accounting for Special-Purpose Entities, Including
Public Colleges and Universities
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105 Verified Questions
105 Flashcards
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Sample Questions
Q1) A public college had tuition and fees for the year ended June 30,2014 in the amount of $45,000,000.Scholarships,for which no services were required,amounted to $2,500,000.Graduate assistantships,for which services were required,amounted to $2,300,000.The amount to be reported by the college for net tuition and fee revenue would be:
A) $40,200,000.
B) $42,700,000.
C) $42,500,000.
D) $45,000,000.
Q2) GASB Statement 39:
Determining Whether Certain Organizations Are Component Units requires most public college foundations to be reported as discretely presented component units in the college's financial reports.
A)True
B)False
Q3) Revenue for reimbursement grants may be recognized before expenditures take place as long as the grant has been awarded.
A)True
B)False
Page 11
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Chapter 10: Accounting for Private Not-For-Profit Organizations
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151 Verified Questions
151 Flashcards
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Sample Questions
Q1) Contributions to a private not-for-profit may be restricted as to time,purpose or for plant acquisition.
A)True
B)False
Q2) A donor gave $100,000 to a foundation,which is financially related to a nongovernmental,not-for-profit organization.The foundation,which is also a nongovernmental,not-for-profit organization,would record the $100,000 as:
A) A Revenue.
B) A Liability.
C) Either (a) or (b), depending upon the policy of the foundation.
D) Neither (a) or (b); the transaction would not be recorded by the foundation.
Q3) If a person names a private not-for-profit organization in his or her will,this is considered a(n)________ and is __________.
A) Conditional promise to give; not recorded.
B) Unconditional promise to give; recorded.
C) Intention to give; recorded.
D) Intention to give; not recorded.
Q4) What is the treatment of multi-year pledges as required by FASB Statement No.116?
Page 12
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Chapter 11: College and University Accounting Private Institutions
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) The NACUBO Financial Accounting and Reporting Manual treats estimates of uncollectible student accounts as:
A) Bad debt expense
B) A reduction in tuition and fee revenue
C) Either bad debt expense or a reduction in tuition and fee revenue as long as the policy is consistently applied
D) None of the above; colleges and universities must use the direct write off method
Q2) Which of the following would not be considered a split-interest agreement,according to the Not-for-Profit Guide?
A) Charitable remainder trusts.
B) Permanent income-sharing agreements.
C) Charitable gift annuities.
D) Pooled (life) income funds.
Q3) Distinguish between (a)true endowments,(b)term endowments,and (c)quasi-endowments.Explain how the net assets of each is classified by a private college or university.
Q4) What is the basis of accounting for a private college or university and what are the principal sources of reporting standards?
Page 13
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Chapter 12: Accounting for Hospitals and Other Health Care
Providers
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) The AICPA Health Care Guide prescribes a separate Statement of Operations and Statement of Changes in Net Assets rather than a Statement of Activities.
A)True
B)False
Q2) Like charities and private colleges,private not-for-profit health care organizations follow FASB standards.
A)True
B)False
Q3) Which of the following could be recognized as contributed services revenue by a not-for-profit hospital?
A) An architect developed building plans for a new outpatient clinic.
B) A high school student class volunteered to answer the telephone during the Friday night midnight shift.
C) Both (a) and (b) above.
D) Neither (a) nor (b) above.
Q4) Identify the three types of temporary restrictions placed on contributions to a private sector not-for-profit health care organization and outline the accounting requirements for each type.
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Chapter 13: Auditing, Tax-Exempt Organizations, and Evaluating Performance
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151 Verified Questions
151 Flashcards
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Sample Questions
Q1) Which of the following is true regarding the Single Audit Act and its amendments?
A) A risk-based approach is used.
B) An opinion is required on compliance of all programs.
C) Both A and B above.
D) Neither A nor B above.
Q2) Service Efforts and Accomplishments Reporting is best completed by using a variety of measures,which are reported consistently.
A)True
B)False
Q3) Tax-exempt organizations are required to file Form 990 by the 15th day of the 5th month following the organization's taxable year.
A)True
B)False
Q4) The program expense ratio for a not-for-profit organization will improve if the organization shifts costs from fund-raising to program expenses.
A)True
B)False
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Chapter 14: Financial Reporting by the Federal Government
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66 Verified Questions
66 Flashcards
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Sample Questions
Q1) Which of the following steps in the federal government's budgetary authority process is most similar to the recording of encumbrances by state and local governments?
A) Apportionment
B) Appropriation
C) Allotment
D) Obligation
Q2) Assume a federal agency places orders for contracted services supporting a federal program.The journal entries at the agency level to record this event will include:
A) a debit to the account Allotments
B) a credit to the account Obligations - Undelivered Orders
C) Both (a) and (b)
D) Neither (a) nor (b)
Q3) The Statement of Net Cost of a federal agency is prepared on the modified accrual basis of accounting.
A)True
B)False
Q4) Identify (in order of occurrence)the steps in the federal budgetary authority process.
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