Not-for-Profit Accounting Exam Materials

Course Introduction

Not-for-Profit Accounting explores the unique principles, standards, and reporting requirements relevant to non-profit organizations, including charitable entities, educational institutions, and health care organizations. The course covers the preparation and analysis of financial statements in accordance with Generally Accepted Accounting Principles (GAAP) for not-for-profit entities, fund accounting, budgeting, tax compliance, and financial management practices tailored to the sector. Students will gain practical skills in managing restricted and unrestricted resources, compliance reporting, auditing, and ethical considerations, equipping them to effectively oversee the financial operations and transparency required of not-for-profit organizations.

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) With respect to MD & A, a government may discuss any issues it deems important to the completeness of the annual report

A)True

B)False

Answer: False

Q2) The General Fund is always a major fund for purposes of financial reporting.

A)True

B)False

Answer: True

Q3) Which of the following is true regarding the government-wide Statement of Net Assets?

A) Discretely presented component units are included in a separate column (or columns)

B) Net assets are broken down into three categories: invested in capital assets, reserved and unreserved

C) Both of the above

D) Neither of the above

Answer: A

Page 3

To view all questions and flashcards with answers, click on the resource link above.

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) 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

Q2) Contrast revenue recognition under the accrual and modified accrual bases of accounting.

Answer: Under modified accrual accounting, revenues should be recognized when measurable and available to finance expenditures of the current period. Under accrual accounting, revenues are recognized when earned and realizable.

Q3) 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

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) The budgetary account used to control Revenues is called "Estimated Revenues Control."

A)True

B)False

Answer: True

Q2) The Reserve for Encumbrances account is properly considered to be a(an):

A) Current liability if paid within a year; otherwise, long-term debt

B) Equity account; a reservation of fund equity

C) Budgetary account

D) Long-term liability

Answer: B

Q3) When liabilities authorized by an appropriation have been incurred, the appropriation is said to be

A) Expensed

B) Encumbered

C) Expended

D) Collected

Answer: C

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) The Expenditures control account in the General Fund is debited when:

A) Equipment previously ordered is received

B) The budget is recorded

C) The books are closed at the end of the year

D) Supplies are ordered

Q2) Which of the following is true regarding accounting for inventories?

A) GAAP permits use of either the consumption method or the purchases method

B) If inventories are significant, GAAP requires that an asset account be credited in order to record a fund balance reserve

C) Under the consumption method, Expenditures are debited when inventory is received

D) All of the above are true

Q3) Governmental fund financial statements are to be prepared on the accrual basis of accounting.

A)True

B)False

Q4) In the General Fund, revenues are recognized when measurable and available. A)True

B)False

Page 6

Q5) What is the difference between an extraordinary and special item?

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) At the inception of a capital lease agreement,

A) A liability is incurred and reported in the governmental fund account

B) A liability is incurred and reported in the government-wide financial statements

C) An expenditure is recorded in the governmental fund account

D) Both B and C

Q2) Which of the following is/are true regarding Capital Projects Funds?

A) The major source of funding for capital projects funds is the issuance of long-term debt

B) Capital project funds only exist for the duration of the project for which it is created

C) Capital Project funds use the Modified Accrual Basis of Accounting

D) All of the above are true

Q3) Budgets are typically recorded for Special Revenue Funds.

A)True

B)False

Q4) With respect to Capital Projects Funds, GASB standards require the accrual basis of accounting.

A)True

B)False

Page 7

To view all questions and flashcards with answers, click on the resource link above.

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) An internal service fund provided services to a General Fund department. At the time of billing, the debit entry in the General Fund would be:

A) Other Financing Sources-Transfers Out

B) Expenditures

C) Operating Revenues-Charges for Services

D) Expenses

Q2) Proprietary funds report using the current financial resources measurement focus and the modified accrual basis of accounting

A)True

B)False

Q3) Internal Service Funds account for activities that produce goods or services to be provided to outside customers on a cost reimbursement basis

A)True

B)False

Q4) Long term debt serviced from proprietary funds is recorded in the Long Term Debt Account Group.

A)True

B)False

To view all questions and flashcards with answers, click on the resource link above. Page 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) The term "fiduciary funds" include agency, pension trust, investment trust and permanent funds.

A)True

B)False

Q2) Private-purpose trust funds account for donated resources that benefit the general citizenry.

A)True

B)False

Q3) Financial reporting requirements for a defined benefit pension plan includes a schedule of employee contributions.

A)True

B)False

Q4) A defined benefit plan will never have unfunded actuarial liabilities.

A)True

B)False

Q5) Governments that contribute to single employer and agent multiple-employer plans compute annual pension cost as the unfunded actuarial liability.

A)True

B)False

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) To qualify as a collection, a donated or purchased item must meet all of the following conditions except:

A) Held for public exhibition, education or research to further public service

B) Protected, kept unencumbered, cared for and preserved

C) Subject to an organizational policy that requires th90e proceeds from sales of collection items to be used to acquire other collectibles

D) All of the above conditions must be met

Q2) Which of the following would be included in the Equity section of the Statement of Net Assets?

A) Retained Earnings

B) Temporary Restricted Assets

C) Invested in capital assets, net of related debt

D) Capital Stock

Q3) When preparing the government-wide financial statements, how much property tax revenue should be recognized for the year ended June 30, 2009?

A) $6,200,000

B) $6,500,000

C) $6,860,000

D) $7,000,000

Page 10

To view all questions and flashcards with answers, click on the resource link above.

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 would not be considered a special-purpose government for financial reporting purposes?

A) A public school system

B) An art museum

C) A public hospital

D) A county board of supervisors

Q2) A Township could be either a general-purpose or a special purpose government.

A)True

B)False

Q3) Assume a government is a special-purpose government engaged in only one governmental activity. Which financial statements would be required?

A) Government-wide statements only

B) Governmental fund statements only

C) Statements combining the governmental funds and government-wide statements

D) Either government-wide or governmental funds statements, issued separately

Q4) Public colleges who waive fees for graduate assistants must report tuition income net of the fees waived.

A)True

B)False

To view all questions and flashcards with answers, click on the resource link above.

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) A donor gave $ 500,000 to a private not-for-profit organization to be held in endowment. In addition, the governing board permanently designated $ 1,000,000 to the endowment. In the Statement of Financial Position, how should these amounts be classified?

A) Permanently Restricted: $1,500,000; Unrestricted: $ - 0 -

B) Permanently Restricted: $1,000,000; Unrestricted: $ 500,000

C) Permanently Restricted: $ 500,000; Unrestricted: $1,000,000

D) Permanently Restricted: $ - 0 ; Unrestricted: $1,500,000

Q2) Uptown Church received a donation of marketable equity securities from a church member. In reviewing the financial press, it is determined that the securities had appreciated during the year. At what amount should Uptown report its marketable equity securities in the year-end balance sheet?

A) Market value at the date of receipt

B) Market value at the balance sheet date

C) Donor's cost

D) The lower of a, b or c

Q3) What are the criteria established by Statement of Position 98-02 for allocation of costs that involve fund raising?

To view all questions and flashcards with answers, click on the resource link above. Page 12

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) Under FASB standards, true endowments are classified as Permanently Restricted Net Assets.

A)True

B)False

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) Only not-for-profit organizations follow FASB guidelines AND report the equity as unrestricted, temporarily restricted or permanently restricted.

A)True

B)False

Q4) With respect to colleges and universities, if tuition or fee reduction is an employee benefit it should be treated as a compensation expense, rather than a discount.

A)True

B)False

Q5) How should the income earned by a private college's endowment be classified?

To view all questions and flashcards with answers, click on the resource link above. Page 13

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) Private for-profit health care organizations follow FASB standards excluding those written specifically for not-for-profits.

A)True

B)False

Q2) Health care organizations that are privately owned and operated to provide a return to investors follow GASB standards.

A)True

B)False

Q3) A donor pledged $500,000 to a not-for-profit hospital in 2008 to conduct medical research, conditional on the hospital raising $500,000 from other donors. The other donors met the condition in 2009. The donor transferred the funds to the hospital in 2009. In which year would the revenue be recognized?

A) 2008

B) 2009

C) Half in 2008 and half in 2009

D) None of the above; the hospital would only recognize revenue when the amounts had been expended according to the donor's wishes

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) The highest bond rating assigned by Moody's is:

A) A+

B) A

C) AAA

D) AAA+

Q2) The IRS believes that three of the areas of concern with respect to tax-exempt organizations are:

A) Cost allocations

B) Excess executive compensation

C) Organizations operating out of their tax-exempt purpose

D) All the above

Q3) Which of the following is not true of Tax Exempt Entities?

A) Even though they are tax exempt entities they must still file a tax return

B) They have to report income that is unrelated to the organization

C) They have Retained Earnings in the equity section of financial statements

D) Tax exempt entities get an automatic $1,000 deduction in Unrelated Business. Income

Q4) Government financial audits are subject to both GAAS and GAGAS.

A)True

B)False

To view all questions and flashcards with answers, click on the resource link above.