Not-for-Profit Accounting Mock
Exam
Course Introduction
Not-for-Profit Accounting explores the unique accounting principles and practices applicable to nonprofit organizations, including charities, educational institutions, health care entities, and government agencies. The course covers topics such as fund accounting, financial statement preparation, donor restrictions, regulatory and reporting requirements, budgetary control, and the role of audits in the nonprofit sector. Students learn to analyze financial statements, ensure compliance with standards such as the Financial Accounting Standards Board (FASB) guidelines, and address ethical considerations specific to not-for-profit entities, preparing them to effectively manage and report on financial resources in mission-driven organizations.
Recommended Textbook
Accounting for Governmental and Nonprofit Entities 17th Edition by Jacqueline Reck
Available Study Resources on Quizplus
17 Chapters
1144 Verified Questions
1144 Flashcards
Source URL: https://quizplus.com/study-set/2906 Page 2
Chapter 1: Introduction to Accounting and Financial
Reporting for Governmental and Not-For-Profit Entities
Available Study Resources on Quizplus for this Chatper
59 Verified Questions
59 Flashcards
Source URL: https://quizplus.com/quiz/57892
Sample Questions
Q1) The Governmental Accounting Standards Board (GASB)is the body authorized to establish accounting principles for all state and local governments,both general purpose and special purpose.
A)True
B)False
Answer: True
Q2) A statistical section should be included in
A) A comprehensive annual financial report (CAFR).
B) The basic financial statements.
C) The notes to the financial statements.
D) Required supplementary information, other than MD&A.
Answer: A
Q3) Providing information on accountability is the primary financial reporting objective for both governmental and not-for-profit entities.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Principles of Accounting and Financial Reporting
for State and Local Governments
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/57891
Sample Questions
Q1) The GASB concept statements indicate that in certain instances a remeasured value for an asset or liability should be reported on the financial statements. Which of the following is not one of the methods recommended by the GASB for remeasured amounts?
A) Historical cost.
B) Lower of cost or market.
C) Fair value.
D) Replacement cost.
Answer: B
Q2) The positive fund balance in a special revenue fund must at a minimum be reported as assigned.
A)True
B)False
Answer: True
Q3) All capital assets acquired by or used by a fund should be reported in the fund balance sheet or statement of net position.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Governmental Operating Statement Accounts
Budgetary Accounting
Available Study Resources on Quizplus for this Chatper
80 Verified Questions
80 Flashcards
Source URL: https://quizplus.com/quiz/57890
Sample Questions
Q1) A liability is recorded in governmental funds when:
A) Goods or services are ordered.
B) Goods or services are received and the invoice is vouchered.
C) Invoices are paid.
D) The appropriation is reduced.
Answer: B
Q2) The expenditure classification "Current Expenditures" is an example of which of the following types of classifications?
A) Activity.
B) Character.
C) Function.
D) Object.
Answer: B
Q3) Encumbrance accounting is required in the accounting for payroll of governmental funds.
A)True
B)False
Answer: False
Page 5
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Accounting for Governmental Operating
Activitiesillustrative Transactions and Financial Statements
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/57889
Sample Questions
Q1) Under the modified accrual basis of accounting applicable to governmental fund types,property tax revenue is accrued and recorded at net realizable value.
A)True
B)False
Q2) The voters of the city passed an ordinance to increase their sales tax by ¼ percent.The proceeds of the sales tax are to be used for culture and recreation.In the governmental activities journal,how would the ¼ percent sales tax revenue be recorded?
A) Program Revenue-Culture and Recreation-Sales Tax.
B) Program Revenue-Culture and Recreation-Operating Grants and Contributions.
C) General Revenue-Sales Tax.
D) General Revenue-Culture and Recreation-Sales Tax.
Q3) Which of the following types of nonexchange transactions recognize revenue when all the eligibility requirements are met?
A) Voluntary nonexchange transactions.
B) Imposed nonexchange transactions.
C) Derived tax revenues.
D) Property tax revenues.
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: Accounting for General Capital Assets and Capital Projects
Available Study Resources on Quizplus for this Chatper
82 Verified Questions
82 Flashcards
Source URL: https://quizplus.com/quiz/57888
Sample Questions
Q1) General capital assets financed wholly or partially through collections of special assessments are recorded in the same manner as any other general capital assets in the governmental activities category at the government-wide level.
A)True
B)False
Q2) If general capital assets are donated,revenue related to the donation is recognized in the governmental fund statement of revenue,expenditures and changes in fund balance.
A)True
B)False
Q3) Interest incurred during construction of general capital assets cannot be capitalized as part of the cost of those assets.
A)True
B)False
Q4) Capital projects funds should use the modified accrual basis of accounting for revenues and expenses.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Accounting for General Long-Term Liabilities and Debt Service
Available Study Resources on Quizplus for this Chatper
72 Verified Questions
72 Flashcards
Source URL: https://quizplus.com/quiz/57887
Sample Questions
Q1) If a city has an unpaid capital lease obligation at the beginning of its fiscal year,the journal entry in the debt service fund to record the lease payment during that fiscal year will include:
A) A debit to Capital Lease Obligations Payable.
B) A credit to Expenditures-Principal of Capital Lease Obligation.
C) A debit to Expenditures-Principal of Capital Lease Obligation.
D) A debit to Interest Expense on Capital Leases.
Q2) The City of New Haven issued $20 million of tax-supported bonds at 102 to finance a new prison.Upon issuance,how will the premium be recorded?
A) A $400,000 revenue to the capital projects fund and a $400,000 revenue in governmental activities.
B) A $400,000 revenue to the debt service fund and a $400,000 premium on bonds payable in governmental activities.
C) A $400,000 expenditure in the debt service fund and a $400,000 expense in governmental activities.
D) A $400,000 other financing source to the debt service fund and a $400,000 premium on bonds payable in governmental activities.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Accounting for the Business-Type Activities of
State and Local Governments
Available Study Resources on Quizplus for this Chatper
75 Verified Questions
75 Flashcards
Source URL: https://quizplus.com/quiz/57886
Sample Questions
Q1) In which of the following funds is it appropriate to record depreciation of capital assets?
A) Internal service fund.
B) Permanent fund.
C) General fund.
D) Capital projects fund.
Q2) The liability for utility revenue bonds should be reported in business-type activities on the government-wide statements,as well as in the enterprise fund.
A)True
B)False
Q3) Proprietary funds follow the current financial resources measurement focus and use the accrual basis of accounting.
A)True
B)False
Q4) How does the statement of cash flows under GASB standards differ from the statement of cash flows under FASB standards?
Q5) Explain how capitalization of interest costs differs for enterprise funds as opposed to governmental funds.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Accounting for Fiduciary Activitiesagency and Trust Funds
Available Study Resources on Quizplus for this Chatper
63 Verified Questions
63 Flashcards
Source URL: https://quizplus.com/quiz/57885
Sample Questions
Q1) When a cash and investment pool of a certain city was established,the debt service fund transferred investments to the pool having a cost of $3,000,000 but a current fair market value of $2,900,000.To record this transaction,the journal entry made by the debt service fund will include:
A) A debit to Equity in Pooled Cash and Investments in the amount of $3,000,000.
B) A debit to Revenues-Change in Fair Value of Investments in the amount of $100,000.
C) A debit to Investments in the amount of $2,900,000.
D) A credit to Investments in the amount of $100,000.
Q2) A defined benefit plan specifies the amount or rate of contribution that the employer and employees must contribute to benefit the members' accounts in the pension plan.
A)True
B)False
Q3) Which of the following is the appropriate measurement focus for agency funds?
A) Economic resources.
B) Current financial resources.
C) Cash and cash equivalents.
D) Accrual basis.
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Financial Reporting of State and Local Governments
Available Study Resources on Quizplus for this Chatper
65 Verified Questions
65 Flashcards
Source URL: https://quizplus.com/quiz/57884
Sample Questions
Q1) Which of the following is a primary objective of financial reporting by state and local governments?
A) To provide information that can be used for capital allocation decisions made by external investors.
B) To report on the legal requirements imposed on the government by its elected officials.
C) To provide information that can be used to assess a government's accountability.
D) To fulfill the government's statutory duty to report on cash received and cash disbursed.
Q2) What is meant by the term "reporting entity" in accounting for state and local governments?
Q3) Similar in purpose to the International Accounting Standard Board (IASB)is the International Public Sector Accounting Standards Board.
A)True
B)False
Q4) Under GASB standards,only proprietary funds prepare a statement of cash flows. A)True
B)False
Page 11
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Analysis of Governmental Financial Performance
Available Study Resources on Quizplus for this Chatper
59 Verified Questions
59 Flashcards
Source URL: https://quizplus.com/quiz/57883
Sample Questions
Q1) Which of the following trends is most likely to be a signal of impending fiscal stress?
A) An increasing ratio of own source revenues to total revenues.
B) A decreasing ratio of total revenues to total expenditures.
C) A decreasing ratio of debt service expenditures to operating revenues.
D) A decreasing ratio of operating expenditures to total revenues.
Q2) Which of the following governments would have publicly accessible information available through the Electronic Municipal Market Access (EMMA)?
A) A city that had issued revenue bonds.
B) A county that has entered into a capital lease.
C) All state and local governments over 25,000 in population.
D) Those state and local governments who have issued debt subject to Securities and Exchange Commission (SEC) oversight.
Q3) Which of the following financial capability indicators is a measure of a government's capacity to issue bonded debt?
A) Revenue dispersion.
B) Property taxes per capita.
C) Bonded debt per capita.
D) Available legal debt limit.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Auditing of Governmental and Not-For-Profit Organizations
Available Study Resources on Quizplus for this Chatper
65 Verified Questions
65 Flashcards
Source URL: https://quizplus.com/quiz/57882
Sample Questions
Q1) Under a single audit,low-risk Type A programs are identified as those:
A) Audited in at least one of the two most recent audit periods as a major program.
B) With no significant changes in personnel or systems that would have significantly increased risk.
C) Considered low-risk in the auditor's professional judgment.
D) All of the above.
Q2) What are the major types of audits and audit engagements described in the Government Accountability Office's Government Auditing Standards or generally accepted government auditing standards (GAGAS),and how do they differ?
Q3) In which section of the standard audit report does the auditor inform financial statement users that certain information,such as combining statements or budgetary comparison schedules may not have been subject to the comprehensive audit procedures?
A) Auditor's Opinion section.
B) Other Matters section.
C) Other Information section
D) Auditor's Responsibility section.
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Budgeting and Performance Measurement
Available Study Resources on Quizplus for this Chatper
59 Verified Questions
59 Flashcards
Source URL: https://quizplus.com/quiz/57881
Sample Questions
Q1) The schedule of legally required events in the budgeting process is generally referred to as the:
A) Budget docket.
B) Legal timetable.
C) Hearing schedule.
D) Budget calendar.
Q2) Which of the following is not one of the criteria for an allowable cost under a federal grant?
A) A cost that is necessary and reasonable for the performance of the federal award and allocable thereto under the OMB cost principles.
B) A cost that conforms to any limitations or exclusions set forth in the OMB cost principles or in the federal award as to types or amount of cost items.
C) A cost that has been approved by the FASB or GASB as an allowable cost.
D) A cost that is adequately documented.
Q3) Public hearings must be held to provide adequate opportunity for citizens' input to governmental budgets,prior to legislative adoption of the budget.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Accounting for Not-For-Profit Organizations
Available Study Resources on Quizplus for this Chatper
74 Verified Questions
74 Flashcards
Source URL: https://quizplus.com/quiz/57880
Sample Questions
Q1) One characteristic that separates a governmental not-for-profit from a nongovernmental not-for-profit is the ability to raise taxes.
A)True
B)False
Q2) According to the FASB,a voluntary health and welfare organization would report the account Provision for Uncollectible Pledges as which of the following?
A) Expense.
B) Contra revenue.
C) Contra asset.
D) FASB allows management to determine its policy for reporting the Provision for Uncollectible Pledges.
Q3) A voluntary health and welfare organization (VHWO)is a type of not-for-profit that depends primarily on charges for services as a source of revenue,rather than on contributions from the public at large.
A)True
B)False
Q4) Explain the accounting for contributions received by a financial intermediary under the FASB Codification.
To view all questions and flashcards with answers, click on the resource link above.
15
Chapter 14: Not-For-Profit Organizationsregulatory, Taxation,
and Performance Issues
Available Study Resources on Quizplus for this Chatper
54 Verified Questions
54 Flashcards
Source URL: https://quizplus.com/quiz/57879
Sample Questions
Q1) Which of the following would not be required under not-for-profit incorporation laws?
A) Appointment of a board of directors.
B) Establishment of by-laws.
C) A clearly stated purpose for the organization.
D) Application for 501(c)(3) status.
Q2) The Internal Revenue Service requires that information from the audited financial statements be used to complete the Form 990.
A)True
B)False
Q3) All not-for-profit organizations are required to file some type of Form 990 with the Internal Revenue Service.
A)True
B)False
Q4) Why do states and the federal government exercise oversight responsibility over not-for-profit,tax-exempt corporations? How do states and the federal government differ in the way they exercise this responsibility?
Q5) Explain the purpose of "intermediate sanctions".
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Accounting for Colleges and Universities
Available Study Resources on Quizplus for this Chatper
61 Verified Questions
61 Flashcards
Source URL: https://quizplus.com/quiz/57878
Sample Questions
Q1) The accrual basis of accounting is used to record revenues and expenses of both public business-type and private colleges and universities.
A)True
B)False
Q2) Which of the following statements is regarding generally accepted accounting principles (GAAP)for colleges and universities?
A) The FASB has set standards for private and public colleges and universities from the time of its inception in 1974.
B) The National Association of Colleges and University Business Officers (NACUBO) provides category (b) accounting principles under the FASB GAAP hierarchy.
C) Public and private colleges and universities are subject to the requirements in the AICPA audit and accounting guide for Not-for-Profit Entities.
D) The GASB is responsible for establishing GAAP for public colleges and universities.
Q3) Tuition refunds are recorded by debiting Tuition and Fees-Unrestricted.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Accounting for Health Care Organizations
Available Study Resources on Quizplus for this Chatper
59 Verified Questions
59 Flashcards
Source URL: https://quizplus.com/quiz/57877
Sample Questions
Q1) The format for a not-for-profit health care entity's statement of operations is the same as that for other types of not-for-profits; the FASB requires a different title on the statement since most revenues are derived from user charges.
A)True
B)False
Q2) Which of the following would be considered an asset limited as to use?
A) Cash donated for an endowment.
B) Cash from a federal research grant, which is to be used for water quality research.
C) Cash the board of directors has designated for equipment acquisitions.
D) Cash contributions that are to be used for the building fund.
Q3) Unlike other not-for-profit entities,the FASB requires health care entities to prepare a statement of changes in net assets.
A)True
B)False
Q4) A contractual adjustment is recorded as a contra-revenue account.
A)True
B)False
Q5) What auditing issues are of particular significance to the health care industry?
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Accounting and Reporting for the Federal Government Glossary
Available Study Resources on Quizplus for this Chatper
65 Verified Questions
65 Flashcards
Source URL: https://quizplus.com/quiz/57876
Sample Questions
Q1) One of the purposes of the Federal Financial Management Improvement Act of 1996 was to:
A) Establish a requirement that the financial statements of the federal government as a whole be audited.
B) Improve the effectiveness of programs receiving federal funds.
C) Establish generally accepted federal accounting principles.
D) Rebuild the credibility and restore public confidence in the federal government.
Q2) A federal agency does not record depreciation expense.
A)True
B)False
Q3) A certain federal agency placed an order for office supplies at an estimated cost of $14,400.Later in the same fiscal year these supplies were received at an actual cost of $14,800.Assume commitment accounting is not used by this agency.At the time the order is placed,what is the net effect on the budgetary and proprietary track accounts?
A) Budgetary accounts: $14,400; Proprietary accounts: $14,400.
B) Budgetary accounts: $14,400; Proprietary accounts: $0.
C) Budgetary accounts: $14,400; Proprietary accounts: $14,800.
D) Budgetary accounts: $0; Proprietary accounts: $0.
To view all questions and flashcards with answers, click on the resource link above. Page 19