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1) When converting from governmental fund financial statements to the governmental
activities column of the government-wide statements, the proceeds from the sale of
capital assets which were listed as an other financing source are eliminated and the gain
or loss is recorded when preparing the government-wide statements.
2) Governments may create special revenue funds whenever a tax or other revenue
source is legislated to be used for a specific purpose, other than capital assets or debt
service.
3) A not-for-profit organization receiving donated fixed assets must record those assets
as temporarily restricted.
4) According to the rules for accounting for colleges and universities under the
jurisdiction of the FASB, an institution may decide not to capitalize museum and other
inexhaustible collections.
5) A pledge of support received by a private college is recorded as revenue when the
promise to give is conditional.
6) The Single Audit Act is intended to provide assurance to the federal government that
federal funds have been expended in accordance with laws and regulations, but does not
include a report on internal controls.
7) Revenues for governmental funds should be recognized when measurable and
earned.
8) Private for-profit health care organizations follow FASB standards excluding those
written specifically for not-for-profits.
9) According to GASB standards relating to Budgetary Accounting, budgetary
comparisons should be included in the appropriate financial statements or schedules for
governmental funds for which an annual budget has been adopted.
10) Investment pools are an example of an activity that may be accounted for in an
internal service fund.
11) A common use of special revenue funds is to account for (noncapital)
intergovernmental grants when federal or state governments provide resources to local
governments
12) The principal of permanent funds must be classified as Restricted Fund Balance.
13) Governmental-type activities fund statements must use accrual basis when
preparing government-wide financial statements.
14) In addition to the government-wide statements, governments are required to prepare
fund financial statements for governmental funds only.
15) Capital Projects funds recognize expenses, but not encumbrances.
16) Private colleges and universities are subject to the standards issued by the FASB.
17) 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.
18) When closing the books for the General Fund, an excess of revenues over
expenditures and transfers out would be credited to Fund Balance.
19) After the issuing of Statement 117, not-for-profit financial statements are relatively
standardized across industries.
20) Government fund statements use the modified accrual basis, while
government-wide, proprietary fund and fiduciary funds use accrual basis.
21) Private not-for-profit health care organizations include what categories in the equity
section of the Statement of Net Assets?
A)Paid in capital and retained earnings
B)Unrestricted, temporarily restricted, and permanently restricted
C)Net investment in capital assets, restricted, and unrestricted
D) Operating, investing, financing
22) GASB requires the ____________ method to report cash flows from operating
activities in the Statement of Cash Flows.
A)Indirect
B)Direct
C)Modifiedaccrual
D)Full accrual
23) Which of the following statements about agency funds is True?
A)An agency relationship that commonly results in the creation of an agency fund is the
collection of taxes and other revenues by an official of one governmental unit for other
governmental units
B)GASB mandates that governments report special assessment resources in an agency
fund only if the reporting government has no obligation to assume debt service on
special assessment debt in the event property owners' default but merely perform the
functions of billing and collecting the special assessments and paying interest and
principal on the special assessment debt
C)Both of the above
D)Neither of the above
24) Which of the following is True regarding pension accounting and reporting?
A)Local governments include only the pension plans for which it is trustee in pension
trust funds Statement of Fiduciary Net Position
B)The pension trust fund Statement of Fiduciary Net Position reflects thenet pension
liability (the excess of the total benefit obligation over the net position available for
benefits)
C)Both A and B
D)Neither A nor B
25) When accounting for pension benefits, the net pension obligation for employees of
proprietary activities is:
A)Reported in the government-wide statements
B)Reported in the proprietary fund-basis statements
C)Both A and B
D)Neither A nor B
26) A government sponsoring a defined benefit pension plan changes an assumption
underlying the measurement of the net pension liability. Assuming the estimated of this
liability increases, how will this be reflected in the government-wide statements?
A) As an increase in the net pension liability and an expense
B) As an increase in the net pension liability and a deferred outflow of resources
C) As an increase in the net pension liability and an intangible asset
D) None of the above, changes in estimated are not recorded
27) Which of the following is True regarding Management's Discussion and Analysis
(MD&A)?
A)MD&A is not considered part of Required Supplementary Information (RSI)
B)MD&A takes the place of footnotes
C)MD&A should present an analysis of significant variations between the original and
final budget
D)All of the above are True
28) The equity section of Statement of Financial Position for private not-for-profits
includes which accounts?
A) Unrestricted, Temporarily Restricted, Permanently Restricted Net Assets
B) Net investment in capital assets, Restricted and Unrestricted net assets
C) Unreserved Fund Balance, Reserved Fund Balance
D) None of the above
29) Northern University has a fiscal year end of June 30 .
In June 2015, tuition and fees of $1,200,000 was assessed for the summer term that runs
from June 1, 2015 through August 31, 2015 . $1,200,000 was collected on June 1,
2015 .
What is the journal entry on June 1 for Northern?
A)Cash and Cash Equivalents1,200,000
Operating Revenues-Student Tuition and Fees400,000
Deferred Revenues-Student Tuition and Fees800,000
B)Cash and Cash Equivalents400,000
Cash and Cash Equivalents, Reserved800,000
Operating Revenues-Student Tuition and Fees400,000
Deferred Revenues-Student Tuition and Fees800,000
C)Cash and Cash Equivalents1,200,000
Operating Revenues-Student Tuition and Fees1,200,000
D) Cash and Cash Equivalents1,200,000
Deferred revenue1,200,000
30) Agency fund assets and liabilities are to be recognized :
A) At the time the government becomes responsible for the assets
B) When they are available and measurable
C) Only in the government-wide financial statements
D) When the earnings process is complete and collection is reasonably assured
31) Which of the following is not a difference between private sector auditing and
governmental auditing?
A)The public availability of audit reports
B)Testing of compliance with laws and regulations
C)Governmental audits require auditor knowledge of government accounting and
auditing
D)None of the above; these are all differences between private sector auditing and
governmental auditing
32) Which of the following types of college/university would have these components of
the Financial Report?
Statement of Financial Position.
Statement of Activities.
Statement of Cash Flows.
Notes to the Financial Statements.
A) Investor Owned
B) Public University
C) Private Not-for-Profit
D) None of the above
33) Which of the following is True regarding the investments of private colleges in
securities with determinable fair values?
A)Investments are to be carried at fair value or amortized cost, depending upon whether
the investments are in equity or debt securities
B)Investments are to be carried at fair value; unrealized gains and losses are to be
reported in the Statement of Activities along with realized gains and losses
C)Investments are to be carried at the lower of cost or market with unrealized losses
reported in the Statement of Activities along with realized gains and losses
D)None of the above
34) The general ledger journal entry in the General Fund to record the adoption of a
budget would include:
A)A debit to Estimated Revenues Control
B)A credit to Estimated Other Financing Sources Control
C)A debit to Budgetary Fund Balance-Reserve for Encumbrances
D)A debit to Appropriations Control
35) Which of the following statements is not correct with respect to contributions to a
private not-for-profit?
A)Contributions to a not-for-profit are recorded at fair market value at the date of
receipt
B)Contributions of assets other than cash to a not-for-profit are recorded at the donors
basis
C)Contributions to a not-for-profit may be restricted as to purpose or time or for plant
acquisition
D)Revenues, including contributions are considered to be unrestricted unless
donor-imposed restrictions apply
36) Government Auditing Standards identify which of the following categories of
professional engagements:
A)Financial audits
B)Financial audits and performance audits
C)Financial audits, agreed-upon procedures and performance audits
D)Financial audits, attestation engagements, performance audits, and nonaudit services
37) The journal entry for the Debt Service fund upon the receipt of money from the
General Fundwould be:
A) Debit to Cash and a credit to Transfers Payable
B) Debit to Transfer In and credit to Cash
C) Debit to Cash and credit to Transfer In
D) Debit to Cash and credit to Transfer Out
38) Which of the following are not required disclosures in a Form 990?
A)A Statement of Functional Expense
B)A discussion of program effectiveness
C)A Statement of Revenues, Expenses and Changes in Net Assets
D)None of the above. They are all required disclosures
39) All of the following are commonly used major revenue source classes except for
A)Taxes
B)Intergovernmental revenues
C)Fines and Forfeits
D)Transfers from other funds
40) Special purpose governments engaged only in fiduciary-type activities are required
to prepare all of the following except:
A)Statement of Fiduciary Net Position
B)Statement of Cash Flows
C)Statement of Changes in Fiduciary Net Position
D)Management Discussion and Analysis
41) How does a for-profit organization record contributions made to a private
not-for-profit organization?
A) As an expense when originally pledged
B) As a reduction in revenue when pledged
C) As an expense when contributed
D) As a reduction in revenue when contributed
42) Which of the following funds use accrual accounting?
A) Internal Service Fund
B)Special Revenue Fund
C)Permanent Fund
D) Both A & B
43) Under GASB Statement 34, accrual accounting is used for:
A)government-wide financial statements only
B)government-wide financial statements and proprietary fund financial statements only
C)government-wide, proprietary fund, and fiduciary fund financial statements only
D)government-wide and all fund financial statements
44) Private colleges and universities are (primarily) subject to financial reporting
standards issued by?
A)FASB
B)GASB
C)
D) None of the above
45) Which of the following accounts in the General Fund is credited when a purchase
order is approved?
A)Appropriations Control
B)Encumbrances Control
C)Budgetary Fund Balance -- Reserve for Encumbrances
D)Vouchers Payable
46) Assume Towne Center Art Museum received the following contributions in 2015 .
Prepare journal entries to record these events and any year-end adjusting journal entries
resulting from the events.
(a)Unrestricted pledges of support were received in the amount of $280,000. All of
these are due within the year and it is estimated that 6% will ultimately prove to be
uncollectible.
(b)600 Memberships were sold to the public in the amount of $40 each. Membership
provides the individual with a monthly magazine and other benefits. The estimated fair
value of member benefits is $15. The member year runs from July 1 to June 30 .
(c)A local carpenter donated supplies and labor with values of $25,000 and $20,000
(respectively) to construct a new exhibition area. Fixed assets are classified as
unrestricted net assets.
(d)On March 1, 2015 a local businessman made a pledge payable in a future period.
The pledge is restricted in purpose and has a present value of $105,000 (effective
interest rate of 6%).
47) The ______ Funds are used to account for situations in which the government is
acting as a collecting/disbursing agent.
A) Agency
B) Enterprise
C) General
D) Special revenue
48) Which of the following is True regarding the Statement of Cash Flows for a public
college?
A)The direct method must be used
B)The statement is in the same format required for state and local governmental
enterprise funds
C)Both A and B are True
D)Neither A nor B is True
49) At what point in the budgetary authority process may a federal agency or its
subunits begin to place orders for goods and services?
A)Apportionment
B)Appropriation
C)Allotment
D)Obligation
50) Under FASB Statement 117, reclassifications of net assets are not made:
A)For satisfaction of time restrictions
B)For satisfaction of program restrictions
C)For satisfaction of fixed asset acquisition
D)For permanently restricted net assets
51) Which of the following is True with respect to long-term debt?
A)Term bonds mature in equal installments over the term of the bond
B)If a sinking fund is required by creditor or law, the unexpended resources of its debt
service fund would be classified as assigned
C)Resources transferred to the debt service fund from the General Fund would typically
be classified as Other Financing Sources by the debt service fund
D)If bonds supporting a capital project are issued at a premium, typically the premium
may be used on capital expenditures
52) A donor made a gift of cash to a private college or university in 2015 with an
expressed purpose restriction. All of the funds were expended in 2015 . The private
college or university must:
A)Record the gift as a temporarily restricted revenue, reclassify the funds to
unrestricted, and then report the expense as unrestricted
B)Record the gift and expense as unrestricted
C)Record the gift and expense as temporarily restricted
D)Use either of the methods described in (a) or (b)
53) A federal agency prepared the following schedule showing the status of federal
appropriations at the end of the first quarter:
What is the total amount of purchase orders placed in the first quarter of the year?
A)30,000
B)145,000
C)175,000
D)180,000
