Advanced Accounting
Textbook Exam Questions
Course Introduction
Advanced Accounting explores complex accounting concepts and procedures beyond introductory courses, focusing on specialized topics such as business combinations, consolidations, partnership accounting, foreign currency transactions, and segment and interim reporting. The course equips students with the skills needed to analyze and prepare consolidated financial statements, handle intricate partnership arrangements, and interpret international accounting standards. Emphasis is also placed on the ethical and regulatory environment affecting advanced accounting practices, preparing students for professional roles in a dynamic business landscape.
Recommended Textbook
Essentials of Accounting for Governmental and Not for Profit Organizations 9th Edition by Paul Copley
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13 Chapters
1497 Verified Questions
1497 Flashcards
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Page 2
Chapter 1: Introduction to Accounting and Financial
Reporting for Governmental and Not-For-Profit Organizations
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Sample Questions
Q1) Which of the following is true regarding Government-wide financial statements?
A) Statement of Cash Flows is not required for Government-wide statements
B) Prior year data must be presented
C) Depreciation can be reported in the statements or disclosed in footnotes
D) Fiduciary activities are only reported if they qualify as a major fund
Answer: A
Q2) Which of the following is true regarding the governmental fund financial statements?
A) The governmental fund financial statements include the Balance Sheet and the Statement of Revenues, Expenditures and Changes in Fund Balances
B) The governmental fund financial statements are prepared on the current financial resources measurement focus and modified accrual basis of accounting
C) The governmental fund Balance Sheet reflects Fund Balances as reserved and unreserved
D) All of the above are true
Answer: D
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Chapter 2: Overview of Financial Reporting for State and Local Governments
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Sample Questions
Q1) GASB Concepts Statement No. 3, Communication Methods in General Purpose
External Financial Reports that Contain Basic Financial Statements, states that
A) Notes to the financial statements may include management's objective explanations
B) Required supplementary information must be objective and may not include predictions or subjective assessments
C) Disclosure in the notes is not an adequate substitute for recognition in the financial statements
D) All of the above are correct
Answer: D
Q2) Under GASB Statement 34, accrual accounting is used for:
A) Government-wide financial statements only
B) Government-wide financial statements and proprietary fund financial statements only
C) Government-wide, proprietary fund and fiduciary fund financial statements only
D) Government-wide and all fund financial statements
Answer: C
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Page 4
Chapter 3: Modified Accrual Accounting: Including the Role of
Fund Balances and Budgetary Authority
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Sample Questions
Q1) The Jacksonville city government approved the budget for the fiscal year ending December 31, 2009. This includes estimated revenues of $2,750,000. The journal entry to record this would be:
A) DR Estimated Revenues Control .. 2,750,000
B) CR Budgetary Fund Balance ..2,750,000
C) DR Budgetary Fund Balance . 2,750,000
D) CR Revenues ..2, 750,000
E) DR Estimated Revenues Control 2,750,000
F) CR Appropriations Control 2,750,000
G) DR Estimated Other Financing Sources . 2,750,000
H) CR Budgetary Fund Balance ...2,750,000
Answer: A
Q2) The Budgetary Comparison Schedule requires a column for the original budget, a column for the final revised budget and a column for actual figures, computed on the accrual basis.
A)True
B)False Answer: False
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Page 5
Chapter 4: Accounting for the General and Special Revenue Funds
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Sample Questions
Q1) When the General Fund purchases water from an enterprise fund, the General Fund would debit Transfers Out.
A)True
B)False
Q2) Which of the following accounts of a governmental unit is debited when supplies previously ordered are received?
A) Encumbrances Control
B) Reserve for Supplies
C) Reserve for Encumbrances
D) Appropriations
Q3) Which of the following is true regarding modified accrual accounting?
A) Revenues are generally recognized when measurable and available to finance expenditures of the current period
B) Expenditures are recognized as the related goods or services are received
C) Both (a) and (b) above
D) None of the above
Q4) In the General Fund, revenues are recognized when earned and available
A)True
B)False
6
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Chapter 5: Accounting for Other Governmental Fund Types:
Capital Projects, Debt Service, and Permanent
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Sample Questions
Q1) Debt service funds are used to account for the payment of principal and interest of both general and enterprise related long-term debt of a state or local governmental unit.
A)True
B)False
Q2) When taxes and/or special assessments are levied specifically for payment of interest and principal on long-term debt, those taxes are recognized:
A) As revenues in the debt service fund
B) As revenues in the general fund with transfers made to the debt service funds for payments
C) As revenues in the capital projects fund with transfers made to the debt service funds for payments
D) None of the above
Q3) The General Fund is always considered to be a major fund. When are other governmental funds considered major:
Q4) Fixed assets of completed projects are recorded in the accounts of capital projects funds.
A)True
B)False
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Chapter 6: Proprietary Funds
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Sample Questions
Q1) The term "proprietary funds" includes enterprise and internal service funds.
A)True
B)False
Q2) Describe the requirements for disclosure of segment information for enterprise funds
Q3) Which of the following would generally be included in the Statement of Net Assets of an Enterprise Fund? \(\begin{array} { | l | c | c | }
\hline & \text { Reserve for } & \text { Revenue Bonds } \\ & \text { Encumbrances } & \text { Payable } \\
\hline \text { A) } & \text { No } & \text { No } \\
\hline \text { B) } & \text { No } & \text { Yes } \\
\hline \text { C) } & \text { Yes } & \text { Yes } \\
\hline \text { D) } & \text { Yes } & \text { No } \\
\hline
\end{array}\)
A) Choice A
B) Choice B
C) Choice C
D) Choice D
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Chapter 7: Fiduciary Trust Funds
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Sample Questions
Q1) The tax agency fund of Fulton County collected $6,000,000 for a school district, $3,000,000 for the county general fund and $4,000,000 for a municipality. County general fund employees handle the collections and a 3 percent collection fee is charged all units except the county. The total amount of revenue recognized by the county general fund would be:
A) $2,910,000
B) $3,000,000
C) $3,090,000
D) $3,300,000
Q2) An investment trust fund is used to account for the external portion of a multi-government investment pool, when the reporting government is trustee.
A)True
B)False
Q3) What account should be credited in a pension trust fund to record employee contributions?
A) Other Financing Sources
B) Net Assets
C) Pension Benefit Obligation
D) None of the above
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Page 9
Chapter 8: Government-Wide Statements, Capital Assets,
Long-Term
Debt
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Sample Questions
Q1) Governments may choose either to depreciate infrastructure assets or use the modified approach.
A)True
B)False
Q2) GASB requires that all infrastructure be capitalized and depreciated
A)True
B)False
Q3) Which of the following is true regarding the government-wide Statement of Activities?
A) Program revenues include charges for services, operating grants and contracts, capital grants and contracts and taxes levied for specific purposes
B) The accrual basis of accounting is used to calculate revenues and expenses
C) Both of the above
D) Neither of the above
Q4) Which of the following are government-wide statements?
A) Statement of Net Assets
B) Statement of Cash Flows
C) Statement of Revenues, Expenses and Changes in Fund Net Assets
D) Both A and C To view
Chapter 9: Accounting for Special-Purpose Entities, Including
Public Colleges and Universities
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Sample Questions
Q1) Public colleges who waive fees for graduate assistants must report tuition income net of the fees waived.
A)True
B)False
Q2) General state appropriations are treated as nonoperating revenue of public colleges and universities.
A)True
B)False
Q3) Which of the following statements is true of a Special-purpose government?
A) Special-purpose governments that are engaged in more than one governmental-type activities can combine the fund and government-wide financial statements.
B) Special-purpose governments engaged in only one governmental-type activity only have to prepare fund-basis financial statements.
C) GASB Statement 35 indicates that public higher education institutions may choose to report as business-type activities.
D) GASB Statement 39 applies only to public educational institutions.
Q4) What is the difference between a component unit and a special purpose local government?
11
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Chapter 10: Accounting for Private Not-For-Profit Organizations
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Sample Questions
Q1) How is an unconditional pledge to contribute to a private not-for-profit organization recorded?
A) As revenue when pledged
B) Not recorded until received
C) As unearned revenue
D) None of the above
Q2) Which of the following pledges of support would not be recognized in the year the pledge was made?
A) A pledge with no restrictions, but conditional on receiving matching pledges
B) An unconditional pledge restricted to a particular purpose
C) An unconditional pledge restricted to a particular year in the future
D) None of the above - all would be recognized
Q3) Country clubs and labor unions are not included in the category "other not-for-profit" organizations because they provide benefit to their members only and not to the general public.
A)True
B)False
Q4) Not-for-profit organizations should have little to no profit.
A)True
B)False
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Chapter 11: College and University Accounting Private Institutions
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Sample Questions
Q1) How does a private college or university treat an academic scholarship?
A) Reduction to revenue
B) Expense
C) No reduction of revenue or expense is recognized
D) Increase to revenue.
Q2) Museum and other inexhaustible collections may or may not be capitalized and recorded in the accounts of a private college.
A)True
B)False
Q3) When a private college is the recipient of a perpetual trust held by a third party, the initial contribution revenue is recorded in the permanently restricted net asset class and income received from the trust is recorded as either unrestricted or temporarily restricted investment income, depending on the trust agreement.
A)True
B)False
Q4) A Pooled life income fund is a split-interest agreement.
A)True
B)False
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Q5) How should the income earned by a private college's endowment be classified?
Chapter 12: Accounting for Hospitals and Other Health Care
Providers
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Sample Questions
Q1) A donor contributed $1,000,000 to a not-for-profit hospital with the restriction that the funds be invested indefinitely and the income be used for cancer research. Which of the following would be true?
A) The gift would be recorded as an increase in permanently restricted net assets.
B) The income from the endowment would be recorded as an increase in unrestricted net assets.
C) Both of the above.
D) Neither of the above.
Q2) The AICPA Audit and Accounting Guide: Health Care Organizations applies to:
A) Private not-for-profit health care organizations
B) Governmentally owned health care organizations
C) Investor-owned health care organizations
D) All of the above
Q3) Health care organizations that are privately owned and operated to provide a return to investors follow GASB standards.
A)True
B)False
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Page 14
Chapter 13: Auditing, Tax-Exempt Organizations, and Evaluating Performance
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Sample Questions
Q1) Tax exempt entities are not allowed to make contributions to political campaigns or they may loose their tax exempt status
A)True
B)False
Q2) The document often relied on for financial analysis by investors and creditors for bonds in the secondary market is:
A) The official statement issued by the government issuing the bonds
B) The comprehensive annual financial report
C) An analysis prepared by the government's auditor
D) None of the above
Q3) All of the following are differences between private sector auditing and governmental auditing except:
A) The public availability of audit reports
B) Testing of compliance with laws and regulations
C) Governmental audits require auditor knowledge of government accounting and auditing
D) All of the above are differences between private sector auditing and governmental auditing
Q4) How is the Unrelated Business Income Tax computed?
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