Public Financial Management
Exam Questions
Course Introduction
Public Financial Management explores the principles, processes, and tools that governments and public sector organizations use to plan, direct, control, and account for financial resources. This course examines key topics such as budget formulation and execution, public expenditure management, revenue generation, fiscal policy, financial reporting, and audits. Emphasis is placed on transparency, accountability, and the role of financial management in promoting effective and efficient delivery of public goods and services. By integrating theoretical frameworks with real-world case studies, students develop a comprehensive understanding of the challenges and best practices in managing public finances within diverse institutional, economic, and political contexts.
Recommended Textbook Essentials of Accounting for Governmental and Not for Profit 12th Edition by Copley
Available Study Resources on Quizplus
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
Available Study Resources on Quizplus for this Chatper
132 Verified Questions
132 Flashcards
Source URL: https://quizplus.com/quiz/55055
Sample Questions
Q1) The Financial Accounting Standards Board sets financial reporting standards for private not-for-profits and investor-owned businesses.
A)True
B)False Answer: True
Q2) A government may have two or more General Funds.
A)True
B)False
Answer: False
Q3) Depreciation on capital assets is not included as an expense in the Statement of Revenues,Expenses,and Changes in Fund Net Position in the proprietary fund financial statements
A)True
B)False Answer: False
Q4) Infrastructure is capitalized by state and local governmental units.
A)True
B)False
Answer: True
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
136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/55049
Sample Questions
Q1) In addition to a Statement of Net Position,what statements are required in the government-wide Financial Statements?
A) Statement of Activities.
B) Statement of Cash Flows.
C) Both of the above.
D) Neither of the above.
Answer: A
Q2) In addition to government-wide statements,governments are required to prepare fund financial statements within which three categories of funds?
Answer: Governmental Proprietary Fiduciary
Q3) List the fund financial statements required by GASB Statement 34 for proprietary type funds.
Answer: Proprietary fund financial statements: Statement of Net Position Statement of Revenues,Expenses,and Changes in Fund Net Position Statement of Cash Flows
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
141 Verified Questions
141 Flashcards
Source URL: https://quizplus.com/quiz/55048
Sample Questions
Q1) Rainy day funds that are available "in emergencies" or "revenue shortfalls" may still be classified as committed if the emergency or shortfall condition is specified and is of such a magnitude as to distinguish it from events that are routine.
A)True
B)False
Answer: True
Q2) An example of an imposed nonexchange revenue is the property tax.
A)True
B)False
Answer: True
Q3) Net resources of a governmental fund represented by prepaid insurance is an example of a nonspendable fund balance
A)True
B)False Answer: True
Q4) Revenues for governmental funds should be recognized when measurable and earned.
A)True
B)False Answer: False
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
124 Verified Questions
124 Flashcards
Source URL: https://quizplus.com/quiz/55047
Sample Questions
Q1) The City of Smithville was awarded a federal grant on May 1,2015 in the amount of $2,400,000 for the purpose of conducting a summer youth employment program. This was a reimbursement-type grant. On August 31,$5,475,000 of expenditures was recorded,and cash was paid out. On October 15 the $5,475,000 was received from the federal government. Record necessary entries as of July 1,August 31,September 30 and October 15.
Q2) What is the difference between reciprocal interfund activity and nonreciprocal interfund activity?
Q3) Nonreciprocal interfund activity:
A) Includes interfund services provided and used
B) Includes exchange-like transactions
C) Includes interfund loans
D) Includes interfund transfers and reimbursements
Q4) Interfund Transfers are flows of cash or other assets that:
A) Require repayment.
B) Are an exchange between funds of equal value.
C) Do not require repayment.
D) Are taxable.
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. Page 6
Chapter 5: Accounting for Other Governmental Fund Types:
Capital Projects, Debt Service, and Permanent
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/55046
Sample Questions
Q1) A special assessment tax is a tax levy that is assessed against only those taxpayers who are deemed to benefit from the service or project paid for by the proceeds of the special assessment levy.
A)True
B)False
Q2) When a government receives a gift that must be invested permanently and the investment proceeds are used to benefit the government or its citizens,it would be appropriate to account for that gift in a private purpose trust fund.
A)True
B)False
Q3) Premiums generated from the issuance of bonds for a capital projects fund are generally transferred to the Debt Service Fund.
A)True
B)False
Q4) Unexpended intergovernmental grants and taxes dedicated to capital improvements in a capital projects fund are likely to be classified as Restricted Fund Balance
A)True
B)False
Chapter 6: Proprietary Funds
Available Study Resources on Quizplus for this Chatper
130 Verified Questions
130 Flashcards
Source URL: https://quizplus.com/quiz/55045
Sample Questions
Q1) Capital assets of an enterprise fund should be reported in the:
A) Government-Wide Statement of Net Position only.
B) Proprietary Fund Statement of Net Position only.
C) General Fixed Asset Account Group only.
D) Government-Wide Statement of Net Position and Proprietary Funds Statement of Net Position.
Q2) Restricted Net Position for a proprietary fund is:
A) Net resources whose use is restricted by users of the services.
B) Reported net of depreciation.
C) Reported net of accumulated depreciation and any outstanding debt used to acquire the asset.
D) Net resources whose use is restricted by creditors, grantors or laws or regulations of other governments.
Q3) Governmental units use which fund type to account for services provided to the general public on a user-charge basis?
A) General Fund.
B) Internal service fund.
C) Permanent fund.
D) Enterprise fund.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Fiduciary Funds, Inter-fund Transactions
Available Study Resources on Quizplus for this Chatper
141 Verified Questions
141 Flashcards
Source URL: https://quizplus.com/quiz/55044
Sample Questions
Q1) Which of the following is true regarding fiduciary funds?
A) Fiduciary funds are included in the fund basis statements but not in the government-wide.
B) Fiduciary funds are reported by fund type, not as major funds.
C) Both of the above.
D) Neither of the above.
Q2) If a government has no potential liability for payment of special assessment debt in the event of default by the property owners,then an agency fund may be used to account for the proceeds of the special assessment.
A)True
B)False
Q3) Assume a government makes a change of assumption that results in an increase in its estimate of the net pension liability. This will be recorded in the government-wide statements as an increase in the net pension liability and an increase in deferred outflows of resources.
A)True B)False
Q4) Describe the accounting treatment of investments with determinable fair values reported in a Private-Purpose Trust Fund
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
144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/55043
Sample Questions
Q1) In addition to the fund basis statement,GASB Statement 34 requires government-wide statements that are prepared using the accrual basis and the current financial resources measurement focus.
A)True
B)False
Q2) Capital assets acquired through proprietary funds are reported in both the Statement of Net Position of those funds and the government-wide Statement of Net Position.
A)True
B)False
Q3) A government reported expenditures for infrastructure as follows: $18 million for improvements and additions; $20 million to extend the life of existing infrastructure; $17 million for general repairs. The cost of its infrastructure,excluding land,is $750 million,and the infrastructure has an estimated life of 50 years,on average. Which of the following would be the reported expense (in millions)under each of the following options?
A) Depreciation Approach: $15; Modified Approach: $37
B) Depreciation Approach: $15; Modified Approach: $32
C) Depreciation Approach: $32; Modified Approach: $37
D) Depreciation Approach: $32; Modified Approach: $32
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
104 Verified Questions
104 Flashcards
Source URL: https://quizplus.com/quiz/55042
Sample Questions
Q1) Which of the following is true regarding the Statement of Cash Flows for a public college?
A) The indirect method must be used.
B) The statement is in the same format required for state and local governmental enterprise funds.
C) Both of the above are true.
D) Neither of the above is true.
Q2) Which of the following groups would not be considered a component unit of a special-purpose government,for the purposes of applying GASB Statement 39: Determining Whether Certain Organizations Are Component Units?
A) General governments.
B) Booster clubs.
C) Museums.
D) Health care entities.
Q3) Special-purpose governments that are engaged in more than one governmental activity are permitted to combine the fund and government-wide financial statements.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Accounting for Private Not-For-Profit Organizations
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/55054
Sample Questions
Q1) A private not-for-profit reports all expenses in unrestricted net asset class.
A)True
B)False
Q2) The Statement of Functional expenses presents a matrix of expenses classified by function (various programs,fund-raising,etc.)and by object or natural classification (salaries,supplies,travel,etc.).
A)True
B)False
Q3) Cash flows must be presented separately in the Statement of Cash Flows for the three classes (unrestricted,temporarily restricted,and permanently restricted).
A)True
B)False
Q4) The FASB requires private not-for-profit organizations to report individual assets and liabilities separated by unrestricted,temporarily restricted and permanently restricted. A)True
B)False
Q5) What is the treatment of multi-year pledges as required by FASB Statement No.116?
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
125 Verified Questions
125 Flashcards
Source URL: https://quizplus.com/quiz/55053
Sample Questions
Q1) The three classes of net assets required to be presented by a private college or university are:
A) Permanently Restricted, Temporarily Restricted, and Unrestricted.
B) Reserved, Unreserved, and Undesignated.
C) Net investment in capital assets, Restricted, and Unrestricted.
D) Educational and General, and Auxiliary Enterprises
Q2) Private colleges are required to report net assets in the following categories:
A) Unrestricted and Restricted
B) Temporarily Restricted , Permanently Restricted and Unrestricted
C) Unrestricted, Temporarily Restricted and board designated
D) Restricted, Unrestricted and Temporarily Restricted
Q3) The FASB has the authority to set accounting standards for all of the following organizations except:
A) Public colleges.
B) Private colleges.
C) For profit proprietary schools.
D) Educational foundations established to support a private college or university.
Q4) How should the income earned by a private college's endowment be classified?
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Accounting for Hospitals and Other Health Care
Providers
Available Study Resources on Quizplus for this Chatper
100 Verified Questions
100 Flashcards
Source URL: https://quizplus.com/quiz/55052
Sample Questions
Q1) According to AICPA Health Care Guide,which of the following should not be included in the determination of a performance indicator for a health care organization?
A) Transfers among affiliated organizations.
B) Receipt of temporarily or permanently restricted contributions.
C) Transactions with the owners, other than in exchange for services.
D) All of the above should be excluded.
Q2) Private health care organizations,both not-for-profit and for-profit,follow GASB standards while government healthcare organizations follow FASB.
A)True
B)False
Q3) Charity care is reported as both revenue and expense (bad debt)in the Statement of Operations.
A)True
B)False
Q4) Both commercial and not-for-profit hospitals in the private sector follow FASB standards.
A)True
B)False
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
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/55051
Sample Questions
Q1) Which of the following is true regarding the Internal Revenue Service's concern regarding tax-exempt organizations?
A) Organizations are charging many of their program expenses to fund-raising.
B) Executives of tax-exempt organizations are receiving excessive salaries and benefits.
C) Both (a) and (b).
D) Neither (a) nor (b).
Q2) The Museum of Creative Arts had the following expenses: $5,000 of membership development expense,$3,000 of Fund-raising expense,$3,000 of Instructional Classes expense,and $1,500 of general and administrative expense.What is the program expense ratio (rounded)?
A) 24%.
B) 39%.
C) 43%.
D) 70%.
Q3) Describe the types of audit opinions that may be issued on a governmental or not-for-profit financial report.
Q4) How is the Unrelated Business Income Tax computed?
Q5) What is the objective of the single audit process?
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Financial Reporting by the Federal Government
Available Study Resources on Quizplus for this Chatper
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/55050
Sample Questions
Q1) Assume a federal agency has the following events:
1.Receives a warrant from the Treasury notifying the agency of appropriations of $12,000,000.2.OMB apportions 1/4<sup>th</sup> of the appropriation for the first quarter of the year.3.The Director of the agency allots $ 2,850,000 to program units.4.Program units place orders $ 2,790,000.5.Supplies ($ 490,000)and services ($ 2,291,000)are received and paid during the first quarter. Supplies of $ 417,000 were used in the quarter. Required:
Prepare any necessary journal entries to reflect the events described above. Identify whether the entry is budgetary or proprietary.
Q2) Which of the following is (are)true regarding the Government Accountability Office?
A) The GAO establishes accounting standards applicable to the federal government and its agencies
B) The GAO establishes auditing standards applicable to the federal government and its agencies
C) Both (a) and (b) above
D) Neither (a) nor (b) above
To view all questions and flashcards with answers, click on the resource link above. Page 16