Introduction to Governmental and Nonprofit Accounting
Exam Answer Key
Course Introduction
This course provides a comprehensive overview of the principles and practices unique to governmental and nonprofit accounting. Students will explore the standards, concepts, and procedures used in recording, classifying, and reporting financial information for organizations in the public and nonprofit sectors. Topics include fund accounting, budgeting, financial reporting, regulatory and legal compliance, and the analysis of financial statements specific to governmental and nonprofit entities. Emphasis is placed on understanding the role of accounting in accountability and decision-making, preparing students for advanced study or careers in public and nonprofit financial management.
Recommended Textbook
Essentials of Accounting for Governmental and Not for Profit Organizations 9th Edition by Paul Copley
Available Study Resources on Quizplus
13 Chapters
1497 Verified Questions
1497 Flashcards
Source URL: https://quizplus.com/study-set/2940 Page 2
Chapter 1: Introduction to Accounting and Financial
Reporting for Governmental and Not-For-Profit Organizations
Available Study Resources on Quizplus for this Chatper
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/58549
Sample Questions
Q1) The government-wide financial statements are prepared using the economic resources measurement focus and accrual basis of accounting.
A)True
B)False
Answer: True
Q2) Which of the following is true regarding the Comprehensive Annual Financial Report (CAFR)?
A) The CAFR has three main sections: introductory, financial and statistical
B) Required Supplementary Information includes a Budgetary Comparison Schedule for the General Fund and all major special revenue funds that have a legally adopted annual budget (unless a statement is prepared)
C) Both of the above
D) Neither of the above
Answer: C
Q3) Governmental accounting standards do not require the statistical section. A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Overview of Financial Reporting for State and Local Governments
Available Study Resources on Quizplus for this Chatper
95 Verified Questions
95 Flashcards
Source URL: https://quizplus.com/quiz/58548
Sample Questions
Q1) Fiduciary funds are to use the:
A) Economic resources measurement focus and accrual basis of accounting
B) Current financial resources measurement focus and accrual basis of accounting
C) Economic resources measurement focus and modified accrual basis of accounting
D) None of the above, the fiduciary funds have no revenues
Answer: A
Q2) A government may have __________________ general fund(s) in a given year?
A) As many as needed
B) Only one
C) The number will vary depending on the needs of the government
D) None of the above
Answer: B
Q3) The government-wide statements and the fund statements for proprietary funds and fiduciary funds use the economic resources measurement focus and the accrual basis of accounting.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Modified Accrual Accounting: Including the Role of
Fund Balances and Budgetary Authority
Available Study Resources on Quizplus for this Chatper
88 Verified Questions
88 Flashcards
Source URL: https://quizplus.com/quiz/58550
Sample Questions
Q1) At year-end, budgetary authority expires and the balances of Expenditures and Encumbrances accounts are closed to
A) Fund Balance - Unreserved
B) Fund Balance - Reserved
C) Other Financing Uses
D) Other Financing Sources
Answer: A
Q2) The amount that Park Ridge would report for expenditures (and encumbrances, if applicable) in its 2007 General Fund Statement of Revenues, Expenditures and Changes in Fund Balances (GAAP Basis) would be:
A) $11,400,000
B) $11,800,000
C) $11,900,000
D) $12,300,000
Answer: B
Q3) Encumbrances Control is closed at year-end.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Accounting for the General and Special Revenue Funds
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/58551
Sample Questions
Q1) Under modified accrual accounting, property tax revenue should be recognized when measurable and available; available means collected no more than 90 days after year-end.
A)True
B)False
Q2) When a special revenue fund accounts for grants that are awarded on a reimbursement basis, revenues are recognized only after expenditures have been recognized.
A)True
B)False
Q3) What would be the effect on the Unreserved Fund Balance at the end of the current fiscal year of recording a $15,000 expenditure for a new computer, assuming a $14,600 encumbrance had been recorded in a General Fund department in the previous fiscal year?
A) Reduce the General Fund's Unreserved Fund Balance $400
B) Reduce the General Fund's Unreserved Fund Balance $14,600
C) Reduce the General Fund's Unreserved Fund Balance $15,000
D) Have no effect on the General Fund's Unreserved Fund Balance
Q4) What is the difference between an extraordinary and special item?
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Accounting for Other Governmental Fund Types:
Capital Projects, Debt Service, and Permanent
Available Study Resources on Quizplus for this Chatper
130 Verified Questions
130 Flashcards
Source URL: https://quizplus.com/quiz/58552
Sample Questions
Q1) Fixed assets are not capitalized in governmental funds.
A)True
B)False
Q2) Permanent funds account for resources that are donor restricted to the extent earnings (but not principal) may be used to support government programs.
A)True
B)False
Q3) If bonds issued to fund a capital project are sold at a premium, the additional money received is:
A) Recorded as Other Financing Sources - Premium on Bonds in the capital projects fund
B) Transferred from the capital projects fund to the debt service fund
C) Transferred from the capital projects fund to the General Fund
D) Both A and B are correct
Q4) General funds and special revenue funds typically record budgets.
A)True
B)False
Q5) What is a bond refunding and why do governments refund bonds?
What is the difference between a current refunding and advance refunding?
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Proprietary Funds
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/58553
Sample Questions
Q1) Customer's meter deposits which cannot be spent for normal operating purposes would be classified as restricted cash in the Statement of Net Assets of which fund?
A) Internal Service
B) Nonexpendable Trust
C) Special Revenue
D) Enterprise
Q2) Which financial statements are required for proprietary funds?
A) Statement of net assets; Statement of revenues, expenses and changes in fund net assets; Statement of cash flows
B) Budgetary comparison schedule; Statement of revenues, expenditures and changes in fund balance; Statement of net assets
C) Balance Sheet; Statement of revenues, expenditures and changes in fund balances; Statement of changes in fiduciary net assets
D) Statement of changes in Fund Balance; Balance Sheet; Statement of cash flows
Q3) Capital projects constructed by an internal service fund are recorded in a capital projects fund.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Fiduciary Trust Funds
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/58554
Sample Questions
Q1) Reporting for Defined Benefit Pension Plans require two financial statements plus two schedules. What are the required statements?
A) Statement of Revenues, Expenses and Changes in Net Assets and Statement of Net Assets
B) Statement of Activity and Balance Sheet
C) Statement of Plan Net Assets and Statement of Changes in Plan Net Assets
D) None of the above
Q2) Fiduciary funds include agency funds, private-purpose trust funds, investment trust funds and pension (or other employee benefit) trust funds.
A)True
B)False
Q3) Which of the following is true regarding fiduciary funds?
A) Fiduciary funds are not included in the government-wide financial statements
B) Fiduciary funds include agency, pension (and other employee benefit) trust, private-purpose trust and investment trust funds
C) Both of the above
D) Neither of the above
Q4) What are the required statements and schedules for a pension trust fund?
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Government-Wide Statements, Capital Assets,
Long-Term
Debt
Available Study Resources on Quizplus for this Chatper
142 Verified Questions
142 Flashcards
Source URL: https://quizplus.com/quiz/58555
Sample Questions
Q1) What fund would not be included in the government-wide financial statements
A) Pension Trust Fund
B) Capital Project Fund
C) Enterprise Fund
D) General Fund
Q2) Internal service funds primarily serve governmental departments; therefore they are not incorporated into the business-type activities category of the government-wide statements.
A)True
B)False
Q3) When converting from fund financial statements to government-wide statements, it is necessary to eliminate those fund transfers that are between the categories of governmental activities and business-type activities.
A)True
B)False
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 all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Accounting for Special-Purpose Entities, Including
Public Colleges and Universities
Available Study Resources on Quizplus for this Chatper
87 Verified Questions
87 Flashcards
Source URL: https://quizplus.com/quiz/58556
Sample Questions
Q1) Which of the following is true regarding financial reporting of special-purpose entities?
A) Special-purpose entities might be included as component units in a primary government's financial statements
B) Special-purpose entities that engage in more than one governmental activity may prepare statements that combine government-wide and governmental fund statements
C) Both of the above are true
D) Neither of the above is true
Q2) Special-purpose governments that are engaged in more than one governmental activity are permitted to combine the fund and government-wide financial statements.
A)True
B)False
Q3) Most public colleges and universities choose to report as special purpose entities engaged in only business-type activities.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Accounting for Private Not-For-Profit Organizations
Available Study Resources on Quizplus for this Chatper
133 Verified Questions
133 Flashcards
Source URL: https://quizplus.com/quiz/58557
Sample Questions
Q1) Which of the following organizations would be subject to the (level b) accounting and reporting requirements of the AICPA's Audit and Accounting Guide: Not-for-Profit Organizations?
A) The International Brotherhood of Electrical Workers
B) St. Jude Children's Hospital
C) Both of the above
D) Neither (a) or (b) above
Q2) Which of the following would not be recognized as contribution revenue by a not-for-profit organization?
A) A pledge to support an educational program for the next 3 years
B) A health clinic is paid to perform clinical trials of a new medicine
C) A gift restricted to purchase equipment
D) Dues paid in excess of the fair value of benefits received
Q3) Which of the following is NOT a characteristic that distinguishes a not-for-profit organization from a business?
A) Contributions from resource providers who expect nothing in return
B) Financial statements intended primarily for use by creditors
C) Operating purposes other than to provide goods or services at a profit
D) Absence of ownership interests
Page 12
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: College and University Accounting Private Institutions
Available Study Resources on Quizplus for this Chatper
105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/58558
Sample Questions
Q1) Which of the following is not a split-interest agreement?
A) Charitable gift annuity
B) Charitable lead trust
C) Pooled life income fund
D) Research grant program.
Q2) A tuition waiver for a student who works as a graduate assistant is treated as a reduction in revenue.
A)True
B)False
Q3) Which of the following types of college/university would have these components of the Financial Report? Statement of Financial Position/ Balance Sheet.
Statement of Activities.
Statement of Cash Flows.
Notes to the Financial Statements.
A) Investor Owned
B) Public University
C) Private Not-for-Profit
D) None of the above
Q4) How should the income earned by a private college's endowment be classified?
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Accounting for Hospitals and Other Health Care
Providers
Available Study Resources on Quizplus for this Chatper
91 Verified Questions
91 Flashcards
Source URL: https://quizplus.com/quiz/58559
Sample Questions
Q1) During the month of December, Godiva Hospital billed patients $45,000, billed 3<sup>rd</sup> parties $70,000 and provided $10,000 of charity care. How much should Godiva report as Accounts Receivable?
A) $45,000
B) $115,000
C) $70,000
D) $125,000
Q2) For hospitals, contractual adjustments to 3<sup>rd</sup> party payers, such as insurance companies, are recorded with a debit to Contractual Adjustment expense and a credit to accounts receivable.
A)True
B)False
Q3) St. John's is a private not-for-profit hospital. At the end of December 2008, a donor pledged to make five payments of $50,000 each, on January 1, 2009, 2010, 2011, 2012 and 2013 to pay for operations in those years. The present value of these payments is $210,618, discounted at 6%. The contribution was not restricted as to purpose. Record all entries required for 2008 and 2009.
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Auditing, Tax-Exempt Organizations, and Evaluating Performance
Available Study Resources on Quizplus for this Chatper
127 Verified Questions
127 Flashcards
Source URL: https://quizplus.com/quiz/58560
Sample Questions
Q1) Beginning in 2004, the requirement for a single audit for organizations receiving federal funds received increased from $300,000 to $500,000
A)True
B)False
Q2) The program expense ratio is calculated as follows: Total expenses / Program service expenses + supporting service expenses
A)True
B)False
Q3) If a government failed to report infrastructure assets, the auditor would be unable to express an unqualified opinion on the fund level financial statements.
A)True
B)False
Q4) In a governmental audit the auditor is required to report directly to appropriate officials in addition to the board or audit committee.
A)True
B)False
Q5) What is the objective of the single audit process?
Page 15
Q6) Describe the different types of governmental audit and attestation engagements.
To view all questions and flashcards with answers, click on the resource link above.