Not-for-Profit Accounting Practice Questions
Course Introduction
Not-for-Profit Accounting introduces students to the unique financial reporting requirements, standards, and practices applicable to not-for-profit organizations. The course covers the principles of fund accounting, revenue recognition, budgeting, and financial statement preparation for charities, foundations, and other nonprofit entities.
Emphasis is placed on the interpretation and application of Generally Accepted Accounting Principles (GAAP) as they relate to the not-for-profit sector, as well as understanding the regulatory environment, compliance requirements, and the use of financial information for effective decision-making and stewardship within mission-driven organizations.
Recommended Textbook
Introduction to Governmental and Not for Profit Accounting 7th Edition by Patton
Available Study Resources on Quizplus
15 Chapters
538 Verified Questions
538 Flashcards
Source URL: https://quizplus.com/study-set/3884 Page 2
Chapter 1: Governmental and Not-For-Profit
Available Study Resources on Quizplus for this Chatper
17 Verified Questions
17 Flashcards
Source URL: https://quizplus.com/quiz/77373
Sample Questions
Q1) For which types of organizations is the Financial Accounting Standards Board (FASB)responsible for establishing accounting and financial reporting standards?
A)Business-type organizations and not-for-profit organizations,including not-for-profit colleges,universities and health care providers
B)Business-type organizations;not-for-profit organizations;and all colleges,universities and health care providers,whether organized as not-for-profit or governmental entities
C)Business-type organizations only
D)All entities,except for those under the jurisdiction of the American Institute of CPAs
Answer: A
Q2) A not-for-profit organization performs all of the following activities except
A)Charging a fee for services provided
B)Paying dividends to shareholders
C)Purchasing long-lived (capital)assets
D)Paying overtime to employees
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
3
Chapter 2: The Use of Funds in Governmental Accounting
Available Study Resources on Quizplus for this Chatper
49 Verified Questions
49 Flashcards
Source URL: https://quizplus.com/quiz/77372
Sample Questions
Q1) Which basis of accounting is used by funds that have a current financial resources measurement focus?
A)full accrual basis
B)cash basis
C)modified accrual basis
D)modified cash basis
Answer: C
Q2) Which of the following is true regarding a statement of cash flows prepared by a government?
A)the statement of cash flows will be identical to one prepared by a business
B)the statement of cash flows will be prepared using the indirect method
C)the statement of cash flows will have no more than three cash flow classifications
D)the statement of cash flows will be prepared using the direct method
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Budgetary Considerations in Governmental Accounting
Available Study Resources on Quizplus for this Chatper
28 Verified Questions
28 Flashcards
Source URL: https://quizplus.com/quiz/77371
Sample Questions
Q1) The City of Kent has estimated that it will spend $4,500,000 and have revenues of $4,800,000 next year.At the beginning of its new fiscal year,it will need to:
A)debit estimated expenditures for $4,500,000
B)debit estimated revenues for $4,800,000
C)debit budgetary fund balance for $300,000
D)debit appropriations for $4,500,000
E)none of the above.
Answer: B
Q2) If a City Manager is looking at the cash forecast,he or she is most likely concerned about which of the following issues?
A)anticipated police overtime pay resulting from the 4th of July parade next summer
B)the expected cost of bridge repairs in the coming five years
C)anticipated short-term borrowing to cover the end of month payroll
D)the total amount to be spent for Fire Department operations in the current year
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: The Governmental Fund Accounting Cycle
Available Study Resources on Quizplus for this Chatper
39 Verified Questions
39 Flashcards
Source URL: https://quizplus.com/quiz/77370
Sample Questions
Q1) Within a city's General Fund,which source of revenues is least likely to be accrued in advance of receipt in cash?
A)building inspection fees
B)property taxes
C)interest on investments
D)sales taxes
Q2) Which line item does not properly appear in the Statement of Revenues,Expenditures,and Changes in Fund Balance (operating statement)of a governmental fund?
A)expenditures--debt service
B)expenditures--capital outlay
C)property taxes receivable
D)beginning fund balance
Q3) The total amount of taxes receivable from all taxpayers within a government's jurisdiction will be posted to which type of account?
A)a control account
B)a contra account
C)a net assets account
D)a subsidiary account
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: The Governmental Fund Accounting Cycle
Available Study Resources on Quizplus for this Chatper
47 Verified Questions
47 Flashcards
Source URL: https://quizplus.com/quiz/77369
Sample Questions
Q1) The City of Maysville's General Fund balance sheet for its December 31,2013 year end shows inventory of $28,000 and prepaid rent of $10,000.The city also had $60,000 of outstanding encumbrances in its General Fund at year-end.In December 2013,a grantor provided the City with $42,000 that must be used to pay musicians who perform in the city's series of summer concerts in the park during 2014.How much should the city report as nonspendable fund balance in its General Fund on December 31,2013?
A)$10,000
B)$28,000
C)$38,000
D)$42,000
E)$60,000
Q2) Which of the following liabilities normally would not be reported in governmental funds?
A)accrued salaries payable
B)bonds payable
C)vouchers payable
D)all of the above are commonly reported in governmental funds
E)none of the above are commonly reported in governmental funds
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: The Governmental Fund Accounting Cycle
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/77368
Sample Questions
Q1) Depending on the restrictions placed on resources used to acquire a police car,the acquisition of the car could be reported in which of the following funds?
A)general fund
B)special revenue fund
C)capital projects fund
D)all of the above
E)none of the above
Q2) Accrued interest on the following type of debt is reported in a governmental fund:
A)short-term tax anticipation notes payable
B)serial bonds
C)general obligation bonds
D)long-term bank notes
Q3) Based on the preceding set of facts,what should be reported in the financial statements of the General Fund for the year?
A)other financing uses of $1 million
B)expenditures of $1 million
C)other financing sources of $2 million and other financing uses of $1 million
D)revenues of $2 million and other financing sources of $7 million
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: The Governmental Accounting Cycle
Available Study Resources on Quizplus for this Chatper
37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/77367
Sample Questions
Q1) In Proprietary Fund accounting,which of the following statements are true?
A)materials and supplies are recognized as expenditures when purchased
B)materials and supplies are recognized as expenses when consumed
C)capital assets are considered as expenditures when they are acquired
D)capital assets are not recorded in proprietary funds
Q2) You are computing an hourly billing rate for the Print Shop Internal Service Fund.Which of the following items should become part of the rate?
A)salaries paid to maintenance staff
B)materials consumed during the year
C)depreciation
D)all of the above
Q3) When an Internal Service Fund sends a bill to the General Fund,which account should the Internal Service Fund debit?
A)expenditures - vehicle usage
B)transfer out to the general fund
C)revenues - vehicle charges
D)due from general fund
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: The Governmental Fund Accounting
Cycle--Fiduciary
Funds
Available Study Resources on Quizplus for this Chatper
35 Verified Questions
35 Flashcards
Source URL: https://quizplus.com/quiz/77366
Sample Questions
Q1) When a donor makes a gift that is accounted for in a Private Purpose Trust Fund,which account should be credited?
A)Additions - donations
B)Deferred revenues
C)Net appreciation in fair value of investments
D)Transfers in to Private Purpose Trust Fund
Q2) Which of the following is not a fiduciary fund?
A)pension trust fund
B)permanent fund
C)private-purpose trust fund
D)agency fund
Q3) The City of Albertville invests the assets of several neighboring cities through its Investment Trust Fund.What account should Albertville credit when it receives money from the neighboring cities for investment purposes?
A)Revenues
B)Additions - contributions from city
C)Additions - revenues
D)Additions - net increase in fair value of investments
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Reporting Principles and Preparation of Fund
Financial Statements
Available Study Resources on Quizplus for this Chatper
41 Verified Questions
41 Flashcards
Source URL: https://quizplus.com/quiz/77365
Sample Questions
Q1) In the net position component called "invested in capital assets,net of related debt" (that appears in proprietary fund financial statements),what is the meaning of net of related debt?
A)bonds,notes,or other borrowings originally issued to acquire or improve the capital assets shown in the amount invested in capital assets
B)outstanding balances of bonds,notes,or other borrowings,issued for any purpose approved by the governing body
C)outstanding balances of all liabilities,regardless of their form,issued to acquire or improve the capital assets shown in the amount invested in capital assets
D)outstanding balances of bonds,notes,or other borrowings,issued to acquire or improve the capital assets shown in the amount invested in capital assets
Q2) Which basis of accounting is used when presenting governmental and proprietary funds in fund-level financial statements?
A)governmental - modified accrual;proprietary - modified accrual
B)governmental - accrual;proprietary - accrual
C)governmental - modified accrual;proprietary - accrual
D)governmental - accrual;proprietary - modified accrual
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Government-Wide Financial Statements
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/77364
Sample Questions
Q1) How much should the city report in its December 31,2012,government-wide financial statements as net position invested in capital assets,net of related debt?
A)$70,000
B)$60,000
C)$58,333
D)$10,000
Q2) The City of Bogue provides other postemployment benefits (OPEB)to its full-time employees.The City uses an actuary to measure its obligation.Which of the following should the City report as a liability in its government-wide statement of net position?
A)the contribution it made to the OPEB plan during the year B)the unpaid portion of medical benefits it expects to pay retirees for events that happened during the year.
C)the cumulative difference between the annual accrual basis OPEB expense,as determined by the actuary,less payments to retirees and contributions to the OPEB plan D)nothing.The liability should only be reported in the governmental fund balance sheet.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Federal Government Accounting and Reporting
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/77363
Sample Questions
Q1) Which of the following actions will reduce the balance in the budgetary account "Allotments - realized resources"?
A)Administering department makes a quarterly allotment to the agency.
B)Agency,which uses commitment accounting,makes a commitment to acquire materials.
C)Agency sends disbursement schedule to Treasury requesting payment of invoice.
D)Agency makes year-end accrual for unbudgeted,but accrued vacation pay,
Q2) When do federal agencies make an entry to record "Fund Balance with the Treasury"?
A)when the Treasury tells the agency the Federal government has sufficient cash to pay bills
B)each time the department of which the agency is a part allots funds to the agency
C)when the Office of Management and Budget apportions funds to the department of which the agency is a part
D)when the Congress makes and the President approves an appropriation
To view all questions and flashcards with answers, click on the resource link above.
13
Chapter 12: Accounting for Not-For-Profit Organizations
Available Study Resources on Quizplus for this Chatper
43 Verified Questions
43 Flashcards
Source URL: https://quizplus.com/quiz/77362
Sample Questions
Q1) In response to a fund-raising campaign,an electric utility provides free electricity to a not-for-profit entity.How should the not-for-profit entity report this gift in its statement of activities?
A)It should not be reported in the statement.
B)It should not be reported on the face of the statement,but should be disclosed in the notes.
C)It should be reported at its fair value as a revenue and as an expense.
D)The entity may choose either to not report it or to report it at fair value as a revenue and as an expense.
Q2) A not-for-profit university uses fund accounting.The university's governing board decides to set aside $500,000 in a separate fund called the Student Performance Quasi-Endowment Fund,the income of which will be used to finance a long-term study on the career paths of the university's graduates.In which net asset classification of the university's statement of financial position should this fund be reported?
A)Unrestricted
B)Temporarily restricted
C)Permanently restricted
D)Endowment funds
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Accounting for Health Care Organizations
Available Study Resources on Quizplus for this Chatper
40 Verified Questions
40 Flashcards
Source URL: https://quizplus.com/quiz/77361
Sample Questions
Q1) When a not-for-profit hospital uses funds for internal record-keeping purposes,what types of resources are accounted for in the General Funds?
A)all resources used in normal daily operations except for plant resources
B)all resources except for those in funds that are classified as restricted
C)all resources except for assets whose use is limited
D)all resources except for those in funds that are classified as restricted and assets whose use is limited
Q2) In the statement of operations of a not-for-profit hospital,which of the following is not likely to be a factor in determining Excess of revenues over expenses?
A)net patient service revenue
B)change in unrealized gains and losses on investments
C)investment income
D)provision for bad debts
Q3) (Distinguishing among the three net asset classifications)
Assume that Andy Kelly Hospital (Problem 44)is a not-for-profit hospital.For each of the six transactions or events shown in that problem,state which of the three net asset classifications are affected: unrestricted;temporarily restricted;or permanently restricted.
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 14: Analysis of Financial Statements and Financial Condition
Available Study Resources on Quizplus for this Chatper
27 Verified Questions
27 Flashcards
Source URL: https://quizplus.com/quiz/77360
Sample Questions
Q1) What can a financial analyst learn from a hospital's number of days' revenue in receivables?
A)the hospital's accounts receivable collection efficiency
B)the average length of stay of patients in the hospital
C)the average daily occupancy rate of the hospital's beds
D)the proportion of hospital beds occupied by patients covered by self-pay patients
Q2) What can an analyst learn from the liquidity indicators?
A)the amount of cash than an entity can obtain from liquidating its capital assets
B)the amount of cash needed to liquidate its long-term debt
C)the amount that an entity is likely to realize from selling all of its assets
D)the ability of an entity to meet its short-term obligations
Q3) The Government Finance Officers Association recommends general-purpose government's have a financial policy to maintain the General Fund's unrestricted fund balance at:
A)ten percent of expected annual General Fund expenditures.
B)45 days of expected governmental fund expenditures
C)no less than two months of regular General Fund revenues or expenditures.
D)no less than two months of total annual governmental fund revenues
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Fundamentals of Accounting
Available Study Resources on Quizplus for this Chatper
29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/77359
Sample Questions
Q1) Glen Turner purchases a high-speed copying machine on credit for his printing business.The machine is expected to have a useful life of four years.What journal entry should be made at the time the copying equipment is received?
A)debit equipment;and credit accounts payable
B)debit copying expenses;and credit accounts payable
C)debit cash;and credit equipment
D)debit depreciation expense - equipment;and credit equipment
Q2) An owner of a business withdraws cash from his business.Which of the following accounts would need to be reduced to record this transaction?
A)accounts receivable
B)owner's equity
C)expenses
D)accounts payable
Q3) Which of the following formulations of the accounting equation is incorrect?
A)assets - liabilities = equity
B)assets = liabilities + equity
C)assets = liabilities + opening equity + (revenues - expenses)+ (owner additions towithdrawals from equity)
D)assets = liabilities - equity
To view all questions and flashcards with answers, click on the resource link above.
Page 17