Nonprofit Financial Management Practice Questions
Course Introduction
Nonprofit Financial Management explores the unique financial practices and challenges faced by nonprofit organizations. This course covers essential topics such as budgeting, financial reporting, analyzing financial statements, cash flow management, and internal controls. Students will learn how to allocate resources efficiently, develop funding strategies, maintain compliance with regulations, and enhance organizational accountability. Real-world case studies and current issues are integrated to provide a practical understanding of financial decision-making in the nonprofit sector, preparing students to effectively manage the financial health and sustainability of mission-driven organizations.
Recommended Textbook
Essentials of Accounting for Governmental and Not for Profit 12th Edition by Copley
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14 Chapters
1794 Verified Questions
1794 Flashcards
Source URL: https://quizplus.com/study-set/2762
Page 2
Chapter 1: Introduction to Accounting and Financial
Reporting for Governmental and Not-For-Profit Organizations
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132 Verified Questions
132 Flashcards
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Sample Questions
Q1) Which of the following funds is considered a Fiduciary Fund?
A) Debt Service Fund
B) Enterprise Fund
C) Internal Service Fund
D) Pension Trust Fund
Answer: D
Q2) Which of the following characteristics would not define an organization as governmental?
A) The power to enact and enforce a tax levy.
B) The potential for unilateral dissolution by a government with the net resources reverting to a government.
C) The receipt of grant money from a state or local government for the purpose of providing services to the public.
D) All of the above.
Answer: C
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Chapter 2: Overview of Financial Reporting for State and Local Governments
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136 Verified Questions
136 Flashcards
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Sample Questions
Q1) The General Fund is always a major fund for purposes of financial reporting.
A)True
B)False Answer: True
Q2) Which of the following is considered Required Supplementary Information (RSI)?
A) Management's Discussion and Analysis.
B) Budgetary Comparison Schedule.
C) Schedule of Risk Management Activities.
D) All of the above are considered RSI.
Answer: D
Q3) Which of the following is not true regarding the Statement of Cash Flows for proprietary funds?
A) Four categories of cash flows are used.
B) Interest and dividends received are recorded as investing activities.
C) The direct method is required for reporting cash flows from operations.
D) At the bottom of the statement, net income is reconciled to cash flows from operations.
Answer: D
Page 4
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Chapter 3: Modified Accrual Accounting: Including the Role of
Fund Balances and Budgetary Authority
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141 Verified Questions
141 Flashcards
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Sample Questions
Q1) Under modified accrual accounting,budgetary authority expires at year end and the balances of Revenues and Expenditures are closed to
A) Net Position
B) Fund Balance
C) Other Financing Uses
D) Other Financing Sources
Answer: B
Q2) The budgetary account used to record budgeted revenues is called "Estimated Revenues Control."
A)True
B)False
Answer: True
Q3) What would be the total Unassigned fund balance?
A) $ 80,000
B) $200,000
C) $280,000
D) $375,000
Answer: B
Page 5
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Chapter 4: Accounting for the General and Special Revenue Funds
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124 Verified Questions
124 Flashcards
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Sample Questions
Q1) The journal entry to record an encumbrance would include:
A) A debit to Encumbrance Control
B) A debit to Budgetary Fund Balance - Reserve for Encumbrances
C) A credit to Budgetary Fund Balance - Reserve for Encumbrances
D) A and C would both be included in the journal entry
Q2) A donor pledged $200,000 to the fund raising drive of a local government to assist its police officers in obtaining the latest technology. The pledge was made on July 16,2014,but was conditioned on the government raising an additional $200,000 from other donors. By the fiscal year-end of June 30,2015,the local government had raised only $5,000 from other donors. What entry would be made for the initial pledge by the local government during the year ended June 30,2015?
A) No entry is required until the condition is fully met.
B) Debit a receivable and credit deferred inflows.
C) Debit a receivable and credit Fund Balance.
D) Debit a receivable and credit revenue
Q3) Governmental fund financial statements are prepared using the accrual basis of accounting.
A)True
B)False
Page 6
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Chapter 5: Accounting for Other Governmental Fund Types:
Capital Projects, Debt Service, and Permanent
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149 Verified Questions
149 Flashcards
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Sample Questions
Q1) Budgets are typically recorded for Capital Projects Funds.
A)True
B)False
Q2) A transfer from the General Fund to a debt service fund to make annual payments on principal and interest would be recorded in the debt service fund as a (an):
A) Other Financing Source.
B) Revenue.
C) Direct addition to Fund Balance.
D) Other Financing Use.
Q3) Which of the following statements is false?
A) All of the governmental funds use the modified accrual basis of accounting B) Debt service funds are required to report accrued interest payable as current liabilities.
C) General fixed assets that are acquired with governmental fund resources are recorded as expenditures in the governmental funds but are displayed as capital assets in the governmental-wide financial statements
D) Permanent funds reflect resources that are legally restricted so that principal may not be expended and earnings are used to benefit the government or its citizenry
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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 enterprise fund should be used when the government has a policy to establish fees to cover the costs of providing services for an activity.
A)True
B)False
Q2) When governments operate landfills as enterprise funds,which of the following is correct?
A) GASB requires that certain post-closure costs be estimated and accrued during the period the landfills receive solid waste.
B) GASB requires that a portion of future estimated costs be charged as an expense and liability of the landfill using units-of-production method as waste is accepted.
C) The purpose of recording post-closure expenses and liabilities is to match the estimated costs with the revenues during the period of time the waste is accepted.
D) All of the above are correct
Q3) An enterprise fund should be used when debt is back solely by fees and charges
A)True
B)False
Q4) Under GASB Statement 34,enterprise funds must be used under which circumstances?
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Page 8
Chapter 7: Fiduciary Funds, Inter-fund Transactions
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141 Verified Questions
141 Flashcards
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Sample Questions
Q1) Investment pools invested from external parties are recorded in Investment Trust Funds.
A)True
B)False
Q2) Which of the following is true regarding fiduciary funds?
A) When a government provides employees a defined benefit pension plan, the government is required to present a ten year Schedule of Changes in Net Pension Liability and Related Ratios as required supplementary information
B) Governmental type funds report a net pension liability representing the unfunded pension obligation.
C) Both of the above.
D) Neither of the above.
Q3) Investments in a pension trust fund should generally be reported using fair market value.
A)True
B)False
Q4) Contrast the purpose of Private-purpose Trust Funds and Permanent Funds.
Q5) Describe the accounting treatment of investments with determinable fair values reported in a Private-Purpose Trust Fund
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Chapter 8: Government-Wide Statements: Capital Assets;
Long-Term
Debt
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144 Verified Questions
144 Flashcards
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Sample Questions
Q1) Government-wide statements are prepared using the modified accrual basis; therefore,governmental fund-basis statements need to be adjusted from their original accrual basis.
A)True
B)False
Q2) In addition to a Statement of Net Position,which of the following are government-wide statements?
A) Statement of Revenues, Expenses, and Changes in Fund Net Position.
B) Statement of Cash Flows.
C) Both A and B.
D) Neither A nor B.
Q3) A donated collection is not required to be capitalized. If a government decides not to capitalize them,how will they be accounted for at the time of the donation?
A) Debit revenue, credit expense/expenditure
B) Debit collections, credit revenue
C) Debit expense/expenditure, credit revenue
D) Debit collections, credit cash
Q4) With regard to the government-wide statements,indicate the measurement focus and basis of accounting that should be employed.
Page 10
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Chapter 9: Accounting for Special-Purpose Entities
Including Public Colleges and Universities
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104 Verified Questions
104 Flashcards
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Sample Questions
Q1) Reimbursement grants allow revenue to be recognized at the time the grant is made.
A)True
B)False
Q2) Special-purpose governments that are engaged in only one governmental-type activity are permitted to combine the fund and government-wide financial statements
A)True
B)False
Q3) Special-purpose governments that are engaged in both governmental and business-type activities are permitted to combine the fund and government-wide financial statements.
A)True
B)False
Q4) 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
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Chapter 10: Accounting for Private Not-For-Profit Organizations
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150 Verified Questions
150 Flashcards
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Sample Questions
Q1) Which of the following statements is false with respect to private not-for-profit organizations?
A) Exchange transactions should be recorded on the accrual basis of accounting where the revenues are recognized when earned.
B) An intention to give should be recorded as revenue when the intention is communicated to the not-for-profit.
C) In certain situations contributed services should be recognized as revenue.
D) FASB statement 124 requires that investments in equity securities with readily determinable values be reported at fair market value.
Q2) The equity section of Statement of Financial Position for private not-for-profits includes which accounts?
A) Unrestricted, Temporarily Restricted, Permanently Restricted Net Assets.
B) Net investment in capital assets, Restricted and Unrestricted net assets.
C) Unreserved Fund Balance, Reserved Fund Balance.
D) None of the above.
Q3) A private not-for-profit reports all expenses in unrestricted net asset class.
A)True
B)False
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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 private college would:
A) Record contribution revenue of $3,792 in 2014.
B) Record contribution revenue of $3,792 in 2015.
C) Record interest revenue of $3,792 in 2014.
D) Record interest revenue of $3,792 in 2015.
Q2) When a private college or university has a foundation,and that foundation receives contributions specifically directed for the benefit of the college or university,
A) The college or university records no revenue until monies are received from the foundation
B) The college or university must recognize its interest in the contribution as an asset and revenue at the same time as the foundation.
C) At the time of the contribution to the foundation, the college or university records an increase in net assets and unearned revenue. When the money is received the unearned revenue is reduced and revenue is recorded.
D) None of the above
Q3) A Charitable gift annuity 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) A hospital reported the following uncollectible amounts:
$ 10,000 for services rendered to homeless individuals with no intention of collection.
$ 30,000 for services rendered with the expectation of collection,but which proved to be uncollectible.
What amount should be reported in revenues and provision for bad debt for these items?
A) Revenues: $ 40,000; Provision for Bad Debt: 40,000.
B) Revenues: $ 40,000; Provision for Bad Debt: 30,000.
C) Revenues: $ 30,000; Provision for Bad Debt: 30,000.
D) Revenues: $ 0; Provision for Bad Debt: 0.
Q2) The AICPA Audit and Accounting Guide: Health Care Organizations applies to:
A) Private sector, not-for-profit hospitals.
B) Public sector, government-owned hospitals.
C) Both (a) and (b) above.
D) Neither (a) nor (b) above.
Q3) Patient service revenue for a hospital does not include charges for charity care.
A)True B)False
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Chapter 13: Auditing, Tax-Exempt Organizations, and Evaluating Performance
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150 Verified Questions
150 Flashcards
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Sample Questions
Q1) What is the maximum threshold for a tax-exempt organization to file a form 990-EZ?
A) A charity with gross receipts of < $25,000.
B) A charity with gross receipts of < $50,000.
C) A charity with gross receipts of < $500,000.
D) A charity with gross receipts of < $500,000 and total assets of < 2.5 $million.
Q2) Which of the following is not considered to be a major user group by the GASB?
A) Citizen groups.
B) Investors and creditors.
C) Government executive branch officials.
D) Legislative and oversight officials.
Q3) Which of the following conditions would exempt income-producing activities from the Unrelated Business Income Tax (UBIT)?
A) Majority of labor is performed by paid employees.
B) The business sells donated merchandise.
C) The business is carried on regularly but is unrelated to the organization's tax-exempt purpose.
D) The business is operated for a profit.
Q4) What is required for an organization to qualify for tax-exempt status?
Page 15
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Chapter 14: Financial Reporting by the Federal Government
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68 Verified Questions
68 Flashcards
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Sample Questions
Q1) At what point in the budgetary authority process may a federal agency or its subunits begin to place orders for goods and services?
A) Apportionment
B) Appropriation
C) Allotment
D) Obligation
Q2) The Department of Treasury maintains a government-wide system of accounts and prepares the federal government's consolidated financial statements.
A)True
B)False
Q3) The account Obligations - Undelivered Orders is credited when goods and services are received.
A)True
B)False
Q4) Which of the following is not required in a federal agency's financial report?
A) Management's Discussion and Analysis
B) Notes to the Financial Statements
C) Required Supplemental Information
D) Budgetary Comparison Schedule
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