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1) Assuming an auditee is not considered low-risk, the auditor is required to express an
opinion on compliance on major programs, which must add up to 90 percent of federal
funds expended by the auditee.
2) Governments and other nonprofits receiving federal funds follow Governmental
Auditing Standards and do not have to comply with
3) With respect to fund basis financial statements, a government may designate any
fund to be a major fund if reporting that fund separately would be useful.
4) With respect to colleges and universities, academic or athletic tuition waivers are
accounted for as expenses.
5) Private colleges and universities use the same accounting and reporting standards as
other private not-for-profit organizations.
6) The cash flow statements of health care organizations, both private and
government-owned,may use the direct or indirect method.
7) Federal agencies must include a Statement of Cash Flows in their annual report.
8) When bonds are sold to construct a capital asset through a capital projects fund, an
entry would be made to debit Cash and credit Bonds Payable in the capital projects
fund.
9) Fund-raising efficiency is a measure of performance that expresses how much an
organization spends in raising a dollar of donations.
10) The FASB requires private not-for-profit organizations to report expenses separated
by unrestricted, temporarily restricted and permanently restricted.
11) Fund basis financial statements in which capital projects funds are reported are the
Governmental Funds Balance Sheet and the Governmental Funds Statement of
Revenues, Expenditures, and Changes in Fund Balances.
12) An intention to give (such as being named in a will) is the same as an unconditional
promise to give and can be recorded as revenue when the intention is made known.
13) Internal Service Funds account for activities that produce goods or services to be
provided to outside customers on a cost reimbursement basis.
14) Fund balance is an account title used only in governmental funds to indicate the
excess of assets over liabilities.
15) The Budgetary Comparison Schedule is considered a part of Required
Supplementary Information in the Comprehensive Annual Financial Report.
16) A government may have two or more General Funds.
17) With respect to the Statement of Cash Flows for a private not-for-profit
organization, the purchase of equipment would be considered an investing activity.
