14. When agency directors make allotments, what budgetary accounts are affected?
A. Unapportioned Authority and Allotments–Realized Resources.
B. Allotments–Realized Resources and Undelivered Orders.
C. Appropriations and Allotments–Realized Resources.
D. Allotments–Realized Resources and Expended Appropriations.
15. Assume that Congress enacted an appropriation for a federal agency in the amount of
$500,000. The proprietary entry that would be necessary would be
Debit Credit
A
.
Fund Balance with Treasury
Unexpended Appropriations
$500,000
$500,000
B. Cash
Appropriations
$500,000
$500,000
C. Appropriation Realized
Unapportioned Authority
$500,000
$500,000
D
.
Cash
Obligations
$500,000
$500,000
16. If an agency incurs expenses that were not previously obligated, the agency should make a
proprietary entry that DEBITS
A. Fund balance.
B. Advances to others.
C. Appropriations used.
D. Unexpended appropriations.
17. An agency makes an internal preliminary request for the purchase of $75,000 of equipment
and supplies with an anticipated cost of $10,000. The budgetary entry made by the agency
would be
Debit Credit
.
Capital Assets
Appropriations
75,000
$85,000
B. Allotments – Realized Resources
Commitments
$85,000
$85,000
C. Appropriations
Commitments
$85,000
$85,000
D
.
Appropriations
Allotments
$85,000
$85,000
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18. A budgetary entry for depreciation on an agency’s equipment would
A. Include a debit to expenses.
B. Include a credit to accumulated depreciation.
C. Include a debit to appropriations.
D. Not be necessary.
19. Which transaction of a federal agency require both budgetary and proprietary entries?
A. Receipt of budgetary authority from the Congress, i.e., receipt of appropriation.
B. Consumption of materials and supplies.
C. Depreciation of capital assets.
D. Signing a contract to buy services.
20. When materials or supplies that have been ordered are received, what budgetary account is
credited?
A. Undelivered orders.
B. Appropriations.
C. Expended appropriations–unpaid.
D. Appropriations used.
21. Which of the following budgetary accounts typically is not closed at year end?
A. Unapportioned Authority.
B. Expended Appropriations–Paid.
C. Expired Authority.
D. Commitments.
22. When equipment is purchased on account, what proprietary accounts are credited?
A. Accounts Payable and Unexpended Appropriations.
B. Cash and Unexpended Appropriations.
C. Accounts Payable and Appropriations Used.
D. Accounts Payable and Expended Appropriations.
23. Which transaction of a federal agency requires a budgetary entry but not a proprietary entry?
A. Receipt of budgetary authority from the Congress, i.e., receipt of appropriation.
B. Consumption of materials and supplies.
C. Depreciation of fixed assets.
D. Approval and placement of purchase order.
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24. Which transaction of a federal agency requires a proprietary entry, but not a budgetary entry?
A. Receipt of capital assets or material ordered.
B. Consumption of materials and supplies.
C. Accrued salaries and benefits.
D. Approval and placement of purchase order.
25. Which transaction of a federal agency does not require both budgetary and proprietary
entries?
A. Receipt of budgetary authority from the Congress, i.e., receipt of appropriation.
B. Payment of liabilities.
C. Accrued salaries and benefits.
D. Receipt of fixed assets or material ordered.
26. When equipment is purchased on account, what proprietary accounts are debited?
A. Equipment and Unexpended Appropriations.
B. Capital Expenses and Unexpended Appropriations.
C. Equipment and Appropriations Used.
D. Equipment and Expended Appropriations.
27. Which of the following journal entries would you expect to see for a federal agency?
A. Debit to unapportioned authority and credit to commitments.
B. Debit to unapportioned authority and credit to allotments–realized resources.
C. Debit to unapportioned authority and credit to apportionments.
D. Debit to unapportioned authority and credit to expended appropriations–unpaid.
28. Which of the following journal entries would you expect to see for a federal agency?
A. Debit to commitments and credit to unappropriated authority.
B. Debit to commitments and credit to allotments–realized resources.
C. Debit to commitments and credit to undelivered orders–unpaid.
D. Debit to commitments and credit to expended appropriations–unpaid.
29. Previously purchased materials costing $50,000 were used by a federal agency. The
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Debit Credit
A
.
Operating/Program Expenses – Materials
Inventory for Agency Operations
$50,000
$50,000
B. Operating/Program Expenses – Materials
Appropriations Used
$50,000
$50,000
C. Appropriation Realized
Inventory for Agency Operations
$50,000
$50,000
D
.
Inventory for Agency Operations
Accounts Payable
$50,000
$50,000
30. Which of the following proprietary accounts of a federal agency would be closed at year-
end?
A. Appropriations realized.
B. Apportionments.
C. Appropriations used.
D. Unexpended appropriations.
31. The following are representative of the basic year-end financial statements required by an
agency except
A. Statement of Net Cost.
B. Statement of Social Insurance.
C. Statement of Investing.
D. Statement of Custodial Activity.
32. Which of the following would not be included as part of the consolidated financial
statements of the federal government?
A. Balance sheet.
B. Statement of custodial activity.
C. Statement of net cost.
D. Statement of social insurance.
1. Generally accepted government auditing standards (GAGAS) are established by
A. The GASB.
B. The Comptroller General.
C. The AICPA.
D. The FASB.
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2. Generally accepted governmental auditing standards are issued by the
A. AICPA.
B. U.S. Government Accountability Office.
C. U.S. Office of Management and Budget.
D. U.S. Department of the Treasury.
3. The scope of a financial audit opinion will generally include all of the following except
A. The note disclosures.
B. The government-wide financial statements.
C. The governmental funds’ balance sheet.
D. The statistical section.
4. All of the following represent criteria for determining questioned costs except
A. Unallowable costs.
B. Unreasonable costs.
C. Unquestioned costs.
D. Unapproved costs.
5. Which of the following is not a reporting unit?
A. Governmental activities.
B. Aggregate nonmajor governmental funds.
C. Aggregate of all discretely presented component units, aggregate nonmajor governmental
funds, aggregate nonmajor Enterprise Funds; Internal Service Fund type; and aggregate
fiduciary fund type.
D. Agency Funds.
6. Which of the following is not an opinion unit?
A. Governmental activities.
B. Internal Service Fund type.
C. Aggregate of all discretely presented component units, aggregate nonmajor governmental
funds, aggregate of nonmajor Enterprise Funds; Internal Service Fund type; and
aggregate fiduciary fund type.
D. Each major governmental fund.
7. A single audit must include all of the following except
A. A financial statement audit.
B. Compliance testing.
C. A performance audit.
D. Internal control evaluation and testing.
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8. Single audits must comply with all of the following guidance except
A. AICPA generally accepted auditing standards.
B. Generally accepted government auditing standards.
C. OMB Circular A-133.
D. Single audits must comply with all of the above guidance.
9. Which single audit report does not include an “opinion”?
A. Report on the schedule of expenditures of federal awards.
B. Report on internal controls over federal financial assistance.
C. Report on financial statements.
D. Report on major federal financial assistance program compliance.
10. Which of the following is true?
A. A single audit must include a GAAS audit and a GAGAS audit.
B. A single audit must include a GAAS audit, but not a GAGAS audit.
C. A single audit must include a GAGAS audit, but not a GAAS audit.
D. A single audit does not include a GAAS audit or a GAGAS audit.
11. Questioned costs that may not reflect the actions that a prudent person would take under the
circumstances are
A. Unallowable costs.
B. Unreasonable costs.
C. Unapproved costs.
D. Undocumented costs.
12. A government is required to have a single audit for any year in which it expends federal
awards of
A. At least $100,000.
B. At least $300,000.
C. At least $500,000
D. At least 25% of its total expenditures.
13. An auditor must audit as a major program
A. All Type A programs unless the auditor has identified one as low risk.
B. All Type A programs.
C. All Type B programs.
D. At least two programs in each audit cycle.
14. Assume that programs that were classified as major federal programs totaled $4,500,000. If
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total federal awards expended were no more than
A. $4,500,000.
B. $9,000,000.
C. $12,000,000.
D. $18,000,000.
15. If the total of major federal programs was $7,000,000 for an auditee who is not low risk, the
percentage of coverage rule would be met if the aggregate of major federal programs were
no more than
A. $7,000,000.
B. $14,000,000.
C. $21,000,000.
D. $28,000,000.
16. Which of the following statements concerning the identification of a Type A low-risk
program is true?
A. A Type A program can be considered low-risk if it has been audited as a major program in
one of the last two years, and the current year had no reportable audit findings.
B. A Type A program is low-risk if it was audited as a major program last year, whether or
not there were any reportable audit findings.
C. A Type A program is low-risk if there were no audit findings within the last two years.
D. A Type A program can never be classified as low-risk.
17. An auditor is only required to perform a risk assessment on Type B programs that
A. Exceed the larger of $100,000 or three-tenths of 1% of total federal awards expended if
the total is less than or equal to $100 million.
B. Exceed the larger of $100,000 or three-tenths of 1% of total federal awards expended if
the total is more than $100 million.
C. Exceed the larger of $300,000 or three-hundredths of 1% of total federal awards
expended if the total is less that $100 million.
D. Exceed the larger of $300,000 or three-hundredths of 1% of total federal awards
expended if the total is more that $100 million.
18. For governments that expend less than $3 million of federal awards during a year, each
federal program for which it expended $300,000 or more is
A. Always treated as a major federal program.
B. Treated as a major federal program if it is a high risk Type B program.
C. Treated as a major federal program if it has not been audited as a major program in either
of the two previous years.
D. Treated as a major federal program only if needed to meet the 50% test.
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19. A federal program that a government classifies as a Type A program
A. Must be treated as a major program.
B. Cannot normally be treated as a low-risk program in three consecutive years.
C. Can usually be treated as a low-risk program in more than three consecutive years.
D. May be treated as a low-risk program for an indefinite number of consecutive years.
20. For a government that has less than $100 million in total federal awards expended, an auditor
must perform a risk assessment on a federal program classified as a Type B program
A. If program has not been assessed in last three years.
B. Every two years.
C. If federal awards expended under the program exceed $100,000.
D. If federal awards expended under the program exceed $300,000.
21. Which of the following could not be an independent auditor for governmental entities?
A. Public auditors.
B. Officials of a government other than the one being examined.
C. Officials of the government being examined even if they are a part of government’s
management assuming they meet certain prescribed criteria.
D. Officials of the government being examined that are separately elected.
22. Auditors are responsible for
A. Preparing a government’s financial statements and related notes to the financial
statements.
B. Reporting on financial and other economic events, transactions, and balances.
C. Maintaining a government’s internal control system.
D. Collecting sufficient objective data to allow them to express an opinion on the accuracy
and reliability of management’s assertions regarding a government’s financial statements.
23. With respect to illegal acts, an auditor should
A. Design procedures to find illegal acts.
B. Alert appropriate law enforcement officials regarding any material illegal acts found
while conducting the audit.
C. Report any illegal acts discovered during the audit.
D. Not be responsible to discover illegal acts.
24. Which of the following categories is not a threat to an auditor’s independence?
A. The auditor has done the work that is being audited.
B. The auditor lacks any vested interest in the results of the audit.
C. The auditor has become too close to the audited organization over time.
D. The auditor makes management decisions.
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25. Which of the following is not an auditee responsibility
A. Prepare appropriate financial statements.
B. Insure the audit covers the auditee’s entire operations.
C. Comply with laws, regulations, and the provisions of contracts related to each of the
federal programs.
D. Take corrective action on audit findings.
26. A nonfederal entity is required to have either a Program-Specific Audit or a Single Audit if
they
A. Received $300,000 or more in federal awards.
B. Expended $300,000 or more in federal awards.
C. Received $500,000 or more in federal awards.
D. Expended $500,000 or more in federal awards.
27. For basic financial statements of a local government to be presented fairly in all material
respects, the basic financial statements must include an opinion unit for:
A. Governmental activities in the government-wide financial statements.
B. All funds in the special revenue fund type reported together as a unit.
C. Investment trust funds as a unit apart from other fiduciary funds.
D. All agency funds reported together as a unit.
28. A material weakness in internal control is a significant deficiency, or combination of
significant deficiencies, that results
A. From a material misstatement in the financial statements.
B. In more than a remote likelihood that a material misstatement of the financial statements
will not be prevented or detected.
C. In a material misstatement of the financial statements.
D. In a government having a qualified audit opinion on their financial statements.
29. When reporting on internal control deficiencies, an auditor need not report
A. Significant deficiencies.
B. Material weaknesses.
C. Possible deficiencies.
D. Immaterial differences.
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30. Audit reports that meet the requirements of the Single Audit Act and OMB Circular A-133
need not include
A. An opinion on the financial statements.
B. An opinion on the schedule of expenditures of federal awards.
C. A report on internal controls.
D. A report on management’s discussion and analysis.
31. To complete an audit in conformity with generally accepted governmental auditing standards,
the auditor should
A. Audit the financial statements following generally accepted auditing standards.
B. Obtain an understanding of the internal controls over major federal financial assistance
programs.
C. Audit the schedule of expenditures of federal awards.
D. Audit management’s discussion and analysis and the statistical section since both include
information from the basic financial statements.
32. A data collection form
A. Is used in detailed testing of major federal program compliance.
B. Is used to summarize the results of a single audit.
C. Is completed by the cognizant agency.
D. Is not necessary unless the single audit report does not include a schedule of findings and
questioned costs.
33. In order for a government to have a program-specific audit, which of the following must be
met?
A. Expend less than $300,000 of federal awards.
B. Expend federal awards under only one federal program.
C. Have low-risk programs.
D. Have a combination of high-risk and low-risk programs.
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