Nonprofit Financial Management
Final Test Solutions
Course Introduction
Nonprofit Financial Management explores the unique financial practices and principles critical to the operation and sustainability of nonprofit organizations. Students will learn about budgeting, accounting, financial reporting, and analysis specific to the nonprofit sector, with a focus on compliance with regulatory requirements and stewardship of donor funds. The course covers techniques for assessing financial health, strategic planning, fundraising strategies, and resource allocation to help future nonprofit leaders make informed decisions that advance their mission-driven goals while ensuring organizational accountability and transparency.
Recommended Textbook
Essentials of Accounting for Governmental and Not for Profit Organizations 11th Edition by Copley
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Chapter 1: Introduction to Accounting and Financial
Reporting for Governmental and Not-For-Profit Organizations
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134 Verified Questions
134 Flashcards
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Sample Questions
Q1) The GASB Concept Statement on Service Efforts and Accomplishments Reporting requires state and local governments to include inputs of nonmonetary resources in their financial reporting.
A)True
B)False
Answer: False
Q2) Governmental activities fund statements may use modified accrual basis when preparing government-wide financial statements.
A)True
B)False
Answer: False
Q3) The ______ Fund accounts for all resources other than those required to be accounted for in other funds.
A) Special revenue
B) General
C) Enterprise
D) Agency
Answer: B
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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) Management's Discussion and Analysis (MD&A)in The Comprehensive Annual Financial Report (CAFR)is part of the Introductory Section
A)True
B)False
Answer: False
Q2) Which part of the financial section of the CAFR is considered "Required Supplementary Information? "
A) Auditor's Report
B) Management's Discussion and Analysis
C) Government-Wide Financial Statements
D) Fund Financial Statements
Answer: B
Q3) Special-purpose governments engaged in business type activities only are required to prepare both proprietary fund and government-wide financial statements.
A)True
B)False
Answer: False
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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) Revenues of governmental fund types should be recognized when:
A) collected in cash.
B) authorized by the budget ordinance.
C) taxes become delinquent.
D) measurable and available.
Answer: D
Q2) The modified accrual basis is a distinct system of accounting that contains financial statement elements that appear nowhere else
A)True
B)False Answer: True
Q3) There are no expenses in modified accrual funds
A)True
B)False
Answer: True
Q4) Real estate property taxes are an example of imposed tax revenue.
A)True
B)False Answer: True
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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) When establishing funds,governments should never attempt to minimize the number of special revenue and other funds,instead using functional classification to record transaction detail.
A)True
B)False
Q2) Which of the following is an interfund transaction?
A) Interfund services provided and used
B) Interfund transfers
C) Interfund loans
D) All of the above are interfund transactons
Q3) The Town of Little River expects to collect $90,000 in sales tax from the state government within 30 days of the end of fiscal year 2014 for retail sales taking place in fiscal year 2014.What entry,if any,would Little River make at the end of 2014?
A) Taxes receivable - current 90,000 Revenues control 90,000
B) Taxes receivable - deferred 90,000 Revenues control 90,000
C) Taxes receivable - current 90,000 Due from state government 90,000
D) Due from state government 90,000 Revenues control 90,000
Q4) What is the difference between an extraordinary and special item?
Page 6
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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) 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.
Q2) If the government is primarily or secondarily liable for the payment of debt principal and interest for a special assessment project,:
A) The tax levy and debt service expenditures should be recorded in an internal service fund.
B) A special revenue fund should account for the proceeds of the debt and construction expenditures
C) The project is accounted for within governmental type funds as if it were a governmental project
D) The debt is not recorded in the government-wide statements
Q3) Encumbrance accounting is typically used for Permanent Funds.
A)True
B)False
Page 7
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Chapter 6: Proprietary Funds
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130 Verified Questions
130 Flashcards
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Sample Questions
Q1) Which of the following statements is true regarding proprietary funds?
A) Accruals and deferrals common to business accounting are recorded in proprietary funds.
B) Proprietary funds use the modified accrual basis of accounting
C) GASB standards require budget-actual reporting for proprietary funds.
D) The purchase of a capital asset is recorded as an expenditure in proprietary funds.
Q2) Enterprise funds are used to account for activities similar to those engaged in profit-seeking businesses.
A)True
B)False
Q3) Unlike enterprise funds,it is frequently desirable for internal service funds to operate at a profit.
A)True
B)False
Q4) Capital assets constructed by an internal service fund are recorded in a capital projects fund.
A)True
B)False
Q5) Under GASB Statement 34,enterprise funds must be used under which circumstances?
8
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Chapter 7: Fiduciary Trustfunds
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154 Verified Questions
154 Flashcards
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Sample Questions
Q1) Which of the following statements is not true regarding agency funds?
A) Agency funds use modified accrual accounting.
B) Agency funds report only assets and liabilities; no fund equities, revenues, or expenditures are recorded.
C) Agency funds are reported in the fiduciary funds Statement of Fiduciary Net Assets.
D) None of the above; all are true.
Q2) The Accrual Basis and Current Resource Measurement Focus are used for Private-Purpose,Investment Trust and Pension Funds.
A)True
B)False
Q3) In an agency fund,the government is acting as an agent for another entity and therefore they do not have rights to these types of funds.
A)True
B)False
Q4) Fiduciary funds use the modified accrual basis of accounting.
A)True
B)False
Q5) Contrast a defined benefit and defined contribution retirement plan.
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Page 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) The governmental funds follow __________ where the government-wide statements follow ___________.
A) Modified accrual accounting, accrual accounting.
B) Accrual accounting, modified accrual accounting.
C) Accrual accounting, accrual accounting.
D) None of the above.
Q2) How much will the city report as Deferred Property Taxes in its June 30,2014 government-wide Statement of Net Assets?
A) $ 620,000.
B) $ 320,000.
C) $ 300,000.
D) $ 0.
Q3) The difference between assets and liabilities in the government-wide statements is called_________.
A) Net Assets.
B) Fund Balance.
C) Net Equity.
D) Accrued Equity.
Q4) With regard to the government-wide statements,list the required statements.
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) Which of the following is true with respect to public four-year higher education institutions (public colleges)?
A) Sometimes, but not always public colleges are included as component units in the state CAFR
B) Revenue sources for public colleges include tuition and fees, state appropriations and donations. All other income is reported as unrelated business income.
C) No public colleges have the power to issue debt; it must be issued by the state as general obligation debt.
D) Public colleges may not choose to report as special-purpose entities engaged only in business-type activities.
Q2) Public higher education institutions typically report as special-purpose entities engaged in governmental and business-type activities or in governmental-type activities only.
A)True
B)False
Q3) List three examples (types)of general-purpose state or local governments and three special-purpose local governments.
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Page 11
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) Which of the following are the net asset classes required by the FASB for private not-for-profit organizations?
A) Reserved and Unreserved.
B) Invested in Capital Assets, Net of Related Debt, Restricted, and Unrestricted.
C) Permanently Restricted, Temporarily Restricted, Unrestricted.
D) None of the above.
Q2) Which of the following would not be recognized as contribution revenue by a private 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) A Statement of Functional Expenses presents a matrix of expenses classified by function and by object or natural classification.
A)True
B)False
Q4) What are the criteria established by Statement of Position 98-02 for allocation of costs that involve fund raising?
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) Private colleges and universities are (primarily)subject to financial reporting standards issued by?
A) GASB.
B) FASB.
C) AICPA.
D) None of the above.
Q2) If the receivable for a student is $8,000 and the student pays only $500 as the result of receiving an athletic scholarship from the school,what would be the appropriate debits
A) Debit Cash.
B) Debit Cash and Debit Expense.
C) Debit Expense.
D) Debit Cash and Debit Tuition Discount on Accounts Receivable.
Q3) Private colleges and universities use the same accounting and reporting standards as public colleges and universities.
A)True
B)False
Q4) A Charitable lead trust is a type of split-interest agreement.
A)True
B)False
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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 difference between accounting for private not-for-profit hospitals and government- owned hospitals is:
A) Government owned hospitals do not have to prepare a Statement of Cash Flows.
B) Government owned hospitals do not have to record depreciation.
C) The equity accounts have different titles and definitions.
D) All of the above.
Q2) The cash flow statements of private health care organizations,both not-for-profit and for-profit,may use the direct or indirect method.
A)True
B)False
Q3) Private sector,not-for-profit health care organizations have a category of assets called "Assets Whose Use is Limited." That category refers to:
A) Assets that have been restricted by donor action.
B) Unrestricted assets that have been limited by individuals or entities other than contributors (such as by bond covenants).
C) Both (a) and (b) above.
D) Neither (a) nor (b) above.
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Page 14
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 would be considered a performance audit under the Government Auditing Standards?
A) An investigation into whether a purchasing department of a government was operated efficiently.
B) An investigation into whether a social service agency of a state government improved the lives of its clients.
C) Both A and B above.
D) Neither A nor B above.
Q2) The GASB has issued standards for Service Efforts and Accomplishments Reporting. A)True
B)False
Q3) Service Efforts and Accomplishments Reporting is limited to financial measures such as revenues and expenses.
A)True B)False
Q4) Service Efforts and Accomplishments Reporting includes measures of service inputs,outputs and outcomes.
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) Allotments are issued by the OMB and establish the amount of an appropriation that will be available each quarter.
A)True
B)False
Q2) The account Fund Balance with Treasury is classified as an asset on a federal agency's balance sheet.
A)True
B)False
Q3) The difference between assets and liabilities of a federal agency is comprised of Fund Balance and may be classified as Nonspendable,Committed,Restricted,Assigned and Unassigned.
A)True
B)False
Q4) The Statement of Custodial Activity is not required of every federal agency but is prepared by the SEC,IRS and Customs.
A)True
B)False
Q5) Identify (in order of occurrence)the steps in the federal budgetary authority process.
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