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1) Unrelated Business Income Tax is an excise tax, applied to the gross receipts of a
business activity. Therefore allocations of expenses incurred in generating the income
are irrelevant.
2) The Statement of Custodial Activity is not required of every federal agency but is
prepared by the SEC, IRS and Customs.
3) Service Efforts and Accomplishments Reporting is limited to financial measures such
as revenues and expenses.
4) Financial reporting for a special-purpose local government depends on whether that
government is engaged in governmental-type, business-type or fiduciary-type activities.
5) The governmental fund statements are prepared using the current financial resources
measurement focus and accrual basis of accounting.
6) Impact fees charged to real estate developers are recorded in an enterprise fund as
capital contributions, a nominal account that will increase Net Position, but is reported
separately in the statement of Revenues, Expenses and Changes in Fund Net Position.
7) When a purchase order or contract is issued as authorized by an appropriation, it is
known as an expenditure.
8) The FASB requires private not-for-profit organizations to report individual assets and
liabilities separated by unrestricted, temporarily restricted and permanently restricted.
9) Unexpended resources transferred to the debt service fund from the General Fund
would typically be classified as Restricted Fund Balance.
10) 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 50 percent of
federal funds expended by the auditee.
11) Private not-for-profits use record encumbrances to maintain budgetary control.
12) An enterprise fund should be used when a legal requirement exists that the cost of
providing services are to be recovered through fees or charges.
13) Federal agencies must include a Managements Discussion and Analysis in their
financial report.
14) Entities that are tax-exempt under IRS Section 501(c)(3) with gross receipts less
than $ 500,000 and total assets less than $ 2.5 million may file Form 990-EZ
15) The Government-wide financial statements include a separate column for fiduciary
fund information.
16) General Funds and special revenue funds typically record budgets.
17) The Financial Accounting Standards Board has authority to establish accounting
and financial reporting standards for both private and state universities.
18) When preparing the government-wide statements, worksheet entries are made to
add the balances of the fiduciary funds
