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1) Fiduciary funds include agency, pension trust, investment trust, and permanent funds.
2) Escheat property, often collected by the state, is to be reported either in a
private-purpose trust fund or in the fund to which the property ultimately reverts.
3) The account Obligations Undelivered Orders is credited when goods and services are
received.
4) The Government Accounting Standards Board has authority for issuing
Governmental Auditing Standards, but not auditing standards for private companies and
not-for-profits.
5) Governmental-type fund financial statements do not include a Statement of Cash
Flows.
6) Public colleges must report tuition income net of athletic scholarships.
7) If a government failed to report infrastructure assets, the auditor would have to
express an adverse opinion on the fund level financial statements.
8) GASB requires both extraordinary and special items to be reported separately after
other financing sources and uses in the General and Special Revenue fund financial
statements
9) A special assessment tax is assessed against all tax payers regardless of who benefits.
10) An Enterprise Fund has an indefinite life.
11) For financial reporting purposes, governmental health care entities, public school
systems, other not-for-profit entities and public colleges and universities may be
considered to be special-purpose entities.
12) Combining statements are required whenever a non-major column is used in one of
the fund financial statements.
13) The GASB has created four eligibility requirements that must be met before
revenue can be recognized: (1) required classification of recipients, (2) timing, (3)
reimbursements, and (4) contingencies.
14) The GASB has the authority to establish accounting and financial reporting
standards for both government-owned and private not-for-profit organizations.
15) Proprietary funds use the current financial resources measurement focus and
modified accrual basis of accounting.
16) Encumbrances are often deemed necessary for recurring expenditures such as
payroll.
17) Performing arts organizations are an example of other private not-for-profit
organizations.
18) Capital outlay expenditures of capital projects funds will typically result in
additions to the general fixed assets reported in the governmental fund Balance Sheet.
19) Proprietary funds use the modified accrual basis of accounting.
20) Which of the following is notcorrect regarding the GASB Cash Flow Statement?
A) The reconciliation of income and cash flows from operations starts with operating
income
B) Fixed Assets acquisitions are reported in the Capital Related Financing Section
C) Cash received from Interest and Dividend Income is recorded in the Operating
Section
D) All of the above are correct
21) The
A) Private not-for-profit health care organizations
B) Governmentally owned health care organizations
C) Investor-owned health care organizations
D) All of the above
22) Which type of audit opinion is appropriate if an auditor is not deemed to be
independent?
A)Adverse
B)Disclaimer of opinion
C)Qualified
D)Unqualified
23) Which of the following would not be included in FASB Statement of Financial
Accounting Concepts #4, which identifies the information needs of the users of
non-business financial statements?
A)Assessing services provided by a non-business organization and its ability to
continue to provide those services
B)Format and content of financial statements
C)Assessing managements stewardship and performance
D)Evaluation of an organizations resources, obligations and effects of changes in net
resources
24) An internal service fund provided services to a General Fund department. At the
time of billing, the credit entry in the internal service fund would be:
A)Other Financing SourcesTransfers In
B)Operating RevenuesCharges for Services
C)Other Financing SourcesCharges for Services
D)Due from General Fund
25) The tax agency fund of Orange County collected $7,000,000 for a school district,
$3,000,000 for the county General Fund, and $5,000,000 for a municipality located in
the County. County General Fund employees handle the collections, and a 2.5 percent
collection fee is charged all units except the county. The total amount of revenue
recognized by the county General Fund would be:
A)$ 390,000
B)$3,300,000
C)$3,390,000
D)$15,300,000
26) All of the following are budgetary accounts except:
A) Estimated Revenues
B) Appropriations
C)Expenditures
D) All of the above
27) The initial transfer of cash from the General Fund to establish a motor pool internal
service fund would require the General Fund to credit Cash and debit:
A)Investment in Internal Service Fund
B)Other Financing Uses-Transfers Out Control
C)Expenditures Vehicle maintenance
D)Accounts Receivable-Internal Service Fund
28) Which of the following is not an example of a voluntary health and welfare
organization?
A. Meals on Wheels
B. Performing arts organizations
C. Big Brothers/Big Sisters
D. Girl and Boy Scouts
29) How is the receipt of an unconditional pledge to contribute to a private
not-for-profit organization recorded?
A) Not recorded until received
B) As revenue when pledged
C) As unearned revenue when pledged
D) None of the above
30) Which of the following is True regarding the Statement of Cash Flows for a public
college?
A)Cash received for interest is reported as an increase in cash flows from operating
activities
B)Cash paid for interest is reported as a decrease in cash flows from either noncapital or
capital and related financing activities
C)Both A and B are True
D)Neither A nor B is True
31) Which of the following characteristics would not define an organization as
governmental?
A)The power to enact and enforce a tax levy
B)The potential for unilateral dissolution by a government with the net resources
reverting to a government
C)The receipt of grant money from a state or local government for the purpose of
providing services to the public
D)All of the above
32) Which of the following is True regarding the government-wide financial
statements?
A)Government-wide statements include the Statement of Net Position, the Statement of
Activities, and the Statement of Cash Flows
B)Government-wide statements are prepared using the economic resources
measurement focus and accrual basis of accounting
C)Both of the above are True
D)Neither of the above is True
33) Which of the following is True regarding accounting for investments by state and
local governmental units?
A)Investments in securities accounted for under the equity method are to be reported at
fair value
B)Realized gains and losses are to be reported separately from unrealized gains and
losses in the Statement of Changes in Fiduciary Net Position
C)Both of the above
D)Neither A nor B above
34) Under the modified accrual basis of accounting, GASB standards for property tax
revenue recognition provide that revenue should not be recognized for property taxes
collected:
A)More than 90 days after fiscal year end
B)More than 60 days after fiscal year end
C)More than 30 days after fiscal year end
D)After fiscal year end
35) Which of the following is not part of a financial audit?
A)Forming judgments about internal controls
B)Testing compliance with laws and regulations
C)Providing an opinion on compliance with GAAP
D)Assessing the degree to which program objectives have been met
36) On October 1, 2014, the City of Mizner issued $4,000,000 in 4%, general obligation
bonds at 101 for the purpose of constructing an addition to City Hall. The premium was
transferred to a debt service fund. A total of $3,975,000 was used to construct the
addition, which was completed prior to June 30, 2015 . The remaining funds were
transferred to the debt service fund. The bonds were dated October 1, 2014, and paid
interest on April 1 and October 1 . The first of 20 annual principal payments of
$200,000 is due October 1, 2015 . The fiscal year for Mizner is July 1- June 30 .
What would be the amount of debt service expenditures reported in the fiscal year
ended June 30, 2016?
A)$160,000
B)$200,000
C)$360,000
D)$400,000
37) Which of the following is True regarding the Statement of Cash Flows required by
the GASB for proprietary funds?
A)Either the direct or indirect method may be used
B)Interest payments would be recorded as investing activities
C)Acquisition of capital assets with bond proceeds would be a decrease in cash
provided by capital and related financing activities
D)Interest received on investments is reported as cash flows from operating activities
38) Which of the following health care organizations have CategoryB GAAP
established by the
A)Cook County Hospital, a department of Cook County
B)Kishwaukee Hospital, a nongovernmental, not-for-profit hospital
C)Open Door Urgent Care, a privately owned for-profit organization
D)All of the above
39) The city is using an internal service fund to self-insure its risk financingactivities.
Claims accrued or paid by this fund are recorded as:
A) Transfers out
B)Special Items
C)Operating Expenses
D) Nonoperating Expenses
40) Revenue bonds
A)Carry less risk than general obligation bonds
B)Are intended to be paidfrom the revenues of an enterprise
C)Are no longer in existence
D)Are backed by the full faith and credit of the government in addition to enterprise
revenues
41) Which of the following would not be determined to result in asset impairment
under GASB Statement 42?
A) An expansion project at a city airport is halted when a major airline discontinues
service to city
B)A truck is at the end of its useful life
C)A building is damaged by a hurricane
D) New technology renders previous equipment obsolete
42) 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
43) Assume a spending bill has been passed by Congress and signed by the President.
The journal entries at the agency level to record this event will include:
A)a debit to the account Unexpended Appropriations
B)a debit to the account Unapportioned Authority
C)a debit to the account Fund Balance with Treasury
D)None of the above
44) Operating Expense: Contracted Services is an example of which type of federal
government account?
Budgetary Proprietary
Account Account
A) Yes Yes
B) No Yes
C) Yes No
D) No No
45) The General Fund of the City of Plymouth purchased a police car in the amount of
$28,000. Which of the following would be True?
A)The government-wide Statement of Activities would report an expense of $28,000
B)The General Fund Statement of Revenues, Expenditures, and Changes in Fund
Balances would report an expenditure of $28,000
C)Both of the above
D)Neither of the above
46) An example of an expenditure classification by function for a governmental fund
would be:
A)Current
B)Salaries
C)Police Department
D)Public safety
47) Which of the following would be a contribution increasing permanently restricted
net assets?
A)A contribution by a donor in the amount of $1,000,000, set aside by the governing
board as funds not to be expended
B)A contribution by a donor in the amount of $1,000,000 to be used to acquire fixed
assets
C) A contribution of $1,000,000 to fund an endowment
D) None of the above
