1) A Charitable lead trust is a type of split-interest agreement.
2) NACUBO guidelines treat estimates of uncollectible accounts as reductions in
revenue.
3) Positive fund balances of capital projects funds are classified as nonspendable,
restricted, committed, or assigned.
4) Governmental Audit Reports are due five months after the end of the fiscal year.
5) Tuition waived for work-study and graduate assistants is recognized as an expense
when preparing a Statement of Revenues, Expenses, and Changes in Net Position.
6) The account Fund Balance with Treasury is classified as an asset on a federal
agencys balance sheet.
7) The difference between assets and liabilities in the government-wide statements is
called Net Position.
8) Government-wide financial statements use the economic resources measurement
focus and the accrual basis of accounting.
9) Special Revenue Funds may be used whenever a government wishes to segregate
income for specific purposes.
10) FASAB, GASB and FASB standards are set forth primarily in documents called
concept statements.
11) The fund balance reported in the Governmental Funds Balance Sheet must equal the
total Net Position in the governmental activities column of the government-wide
Statements of Net Position.
12) GASB requires that infrastructure be depreciated on the government-wide
statements unless the government chooses to use the modified approach which expenses
amounts expended to increase the life of infrastructure.
13) The GASB does not require supplementary information to be reported with its
financial statements even if it is essential to establish appropriate context for the
financial statements and notes.
14) Accounting standards for the federal government and its agencies are established by
the Federal Accounting Standards Advisory Board.
15) Solid waste landfills are required to estimate the cost of closure which include:
A)Cost of equipment used
B)Cost of landfill cover
C)Cost of caring for the site for 30 years
D)All of the above
16) A donor contributed $1,000,000 to a not-for-profit hospital with the restriction that
the funds be invested indefinitely and the income be used for cancer research. Which of
the following would be True?
A)The gift would be recorded as an increase in permanently restricted net assets
B)The income from the endowment would be recorded as an increase in temporarily
restricted net assets
C)Both (a) and (b) above
D)Neither (a) nor (b) above
17) The Hierarchy of GAAP is established by the:
A)Financial Accounting Standards Board
B)Federal Accounting Standards Advisory Board
C)Governmental Accounting Standards Board
D)All of the above have established a hierarchy
18) Which of the following is not True regarding the Statement of Revenues, Expenses,
and Changes in Net Position for a public college?
A)Tuition revenues are reported net of tuition waivers when those waivers require
service on the part of the recipient student
B)Tuition fees waived by the institution in return for services provided by employees
and student assistants are shown as expenses
C)Interest expense is accrued and bond premiums and discounts are amortized
D)None of the above
19) Nonreciprocal inter fund activity:
A)Includes inter fund services provided and used
B)Includes exchange-like transactions
C)Includes inter fund loans
D)Includes inter fund transfers and reimbursements
20) Sam Smith died, leaving a will that provided that $1,000,000 be transferred to a
not-for-profit hospital. The hospital is to invest the funds for 10 years and give $40,000
each year to the granddaughter. At the end of the 10 years, the $1,000,000 can be used
for any purpose desired by the hospital. Which of the following is True?
A)The hospital would record revenue in the amount of $1,000,000, increasing
temporarily restricted net assets
B)The hospital would record revenue in an amount equal to the $1,000,000 less the
present value of the 10 payments to the granddaughter
C)The hospital would record revenue in an amount equal to the present value of the 10
payments to the granddaughter
D)The hospital would not record revenue for 10 years; then a revenue would be
recorded, increasing unrestricted net assets
21) Which of the following is True regarding the government-wide Statement of
Activities?
A)In the government-wide Statement of Activities, special items are those items that are
both unusual and infrequent and are not under the control of management
B)Transfers between governmental and business type activities are eliminated and do
not appear on the government-wide Statement of Activities
C)The Statement of Activities includes depreciation expense
D)Taxes levied, including those restricted to a particular purpose,are reported as
program revenue
22) ______ funds are created when individuals or organizations contribute resources
with the agreement that principal and/or income will be used to benefit individuals or
private organizations.
A)Agency
B)Investment trust
C)Private-purpose trust
D)Permanent
23) If the government is primarily or secondarily liable for the payment of debt
principal and interest for a special assessment project,:
A)The tax levy and debt service expenditures should be recorded in an internal service
fund
B)A special revenue fund should account for the proceeds of the debt and construction
expenditures
C)The project is accounted for within governmental type funds as if it were a
governmental project
D)The debt is not recorded in the government-wide statements
24) How would purchase orders and contracts be reported under modified accrual
accounting and accrual accounting?
Modified AccrualAccrual
A) ExpenditureLiability
B) ExpenditureNo entry
C) EncumbranceNo entry
D) EncumbranceLiability
25) GASB standards ____________ that each governmental reporting entity display
___________ General Fund in its general-purpose financial statements.
A)recommend, one or more
B)recommend, only one
C)require, only one
D)require, one or more
26) What type of fund is used when resources are provided mainly through
business-like transactions to parties external to the government?
A) Internal Service Funds
B) Capital Projects Funds
C) Agency Funds
D)Enterprise Funds
27) Which of the following is not a required statement of a private not-for-profit
hospital?
A)Statement of Functional Expense
B)Statement of Financial Position
C)Statement of Cash Flows
D)Statement of Operations
28) Which of the following is True regarding fiduciary funds?
A)Fiduciary funds use the economic resources measurement focus and accrual
accounting
B)Fiduciary funds include pension (and other employee benefit) trust, investment trust,
agency, and permanent funds
C)Both of the above
D)Neither of the above
29) Which of the following is True regarding the Statement of Cash Flows for a public
college?
A)The indirect method must be used
B)The statement is in the same format required for state and local governmental
enterprise funds
C)Both of the above are True
D)Neither of the above is True
30) According to GASB Statement No. 54, spendable fund balances are displayed in
which of the following categories?
A)Restricted, Committed, Assigned, Unassigned
B)Restricted, Unrestricted, Assigned, Unassigned
C)Spendable, Assigned, Unassigned
D)Restricted, Unrestricted
31) Government-wide statements use the:
A)current financial resources measurement focus and accrual basis of accounting
B) economic resources measurement focus and modified accrual basis of accounting
C)economic resources measurement focus and accrual basis of accounting
D)none of the above
32) Which of the following is included in Required Supplementary Information (RSI)?
A)Management’s Discussion and Analysis (MD&A)
B)Budgetary Comparison Schedule
C)The Schedule of Funding Progress and Schedule of Employer Contributions when
the government reports a pension trust fund
D)All of the above
33) Which fund category must change from modified accrual to accrual basis when
preparing government-wide financial statements?
A)Governmental
B)Proprietary
C)Fiduciary
D)A & Bonly
34) Which of the following is True regarding modified accrual accounting?
A)Revenues are recognized when measurable and available to finance expenditures of
the current period
B)Expenditures are generally recognized as the related goods or services are received
C)Both (a) and (b) above
D)None of the above
35) In February, X City ordered $550,000 of supplies. On March 17th it received all of
the ordered supplies and an invoice of $551,000. Which of the following would be
recorded upon receipt of the supplies and invoice?
A)Debit Encumbrances Control for $550,000
B)Debit Encumbrances Control for $551,000
C)Debit Budgetary Fund Balance — Reserve for Encumbrances for $550,000
D)Debit Budgetary Fund Balance — Reserve for Encumbrances for $551,000
36) Which of the following is a common source of funding for capital projects?
A)Issuance of long term debt
B)Proceeds of dedicated taxes
C)Grants from other governments
D)All of the above are sources of funding for capital projects
37) Which of the following are best described as proprietary funds?
I.Internal Service funds
II.Pension funds
III.Enterprise funds
A)I only
B)I and II
C)I and III
D)I, II, and III
38) State and local governmental funds are organized into three categories including:
A) governmental, proprietary, and restricted
B) proprietary, fiduciary, and restricted
C) governmental, fiduciary, and restricted
D) governmental, proprietary, and fiduciary
39) Impact fees imposed on commercial developers by an enterprise fund and not
associated with specific projects or improvements are recorded as:
A)Transfers from the enterprise fund to a capital projects fund
B)Operating revenues to the enterprise fund
C)Unearned revenue to the enterprise fund
D)Capital contributions to the enterprise fund
40) Federal agencies that are required to report a Statement of Custodial Activity have
transactionsthat are similar to which fund type of a state or local government?
A)Agency funds
B)Internal service funds
C)Capital projects funds
D)Permanent funds
41) A city government collects local option sales taxes legally restricted to pay for the
construction of a new courthouse. Which fund should account for the receipt of the
sales taxes?
A)Special revenue fund
B)Capital projects fund
C)Private-purpose trust fund
D)General fund
42) Which of the following is True regarding the Statement of Financial Position for
nongovernmental, not-for-profit organizations?
A)The Statement must display assets and liabilities separated between the categories of
unrestricted, temporarily restricted, and permanently restricted
B)The Statement must display totals for net assets separated between the categories of
unrestricted, temporarily restricted, and permanently restricted
C) Both A & B above
D)Neither A nor B above
43) A donor gave equipment valued at $60,000 at the beginning of 2015 to a private
not-for-profit organization. The equipment had a 10-year life and depreciation of $6,000
was charged during 2015 . At the end of the year, the net assets to be reported in
unrestricted net assets related to this equipment would be:
A)$60,000
B)$54,000
C)$ 0
D)Either $54,000 or $0, depending upon the policy of the organization
44) The Statement of Cash Flows for a proprietary fund would include which of the
following?
A)Operating, investing, financing
B)Operating, capital and related financing, investing
C)Operating, investing, fiduciary and capital related financing activities
D)Operating,investing, capital and related financing and noncapital related financing
45) A non-expendable trust which benefits a government or its citizenry and which
stipulates that earnings only (not principal) may be used for its provided purpose should
be reported in a:
A)Permanent Fund
B)Special Revenue Fund
C) Private-purpose Trust Fund
D) None of the Above
46) Under the modified accrual basis of accounting, expenditures should be recognized
when:
A)they are authorized by the budget ordinance
B)they are paid
C)they are measurable and can be financed by the revenues of the current period
D)the fund liability is incurred
47) Public colleges and universities follow __________ guidelines while private
colleges and universities follow ________ guidelines
A)GAO, FASB
B)FASB, GAO
C)GASB, FASB
D)FASB, GASB
48) Governmental funds, other than the General Fund, are considered major if:
I.Total Assets, Liabilities, Revenues, or Expenditures of that individual governmental
fund are at least 10% of the corresponding total (assets, liabilities, and so forth) for all
governmental funds.
II.Total Assets, Liabilities, Revenues, or Expenditures of the individual governmental
fund are at least 5% of the corresponding total for all governmental and enterprise funds
combined.
A)I only
B)II only
C)Either I or II, but need not be both
D)Both I and II
49) Which of the following is not True regarding the Statement of Cash Flows for
nongovernmental, not-for-profit organizations?
A)Either the direct or indirect method may be used
B)If a not-for-profit organization received a restricted cash contribution for long-term
purposes, that cash contribution would be reported as a cash flow from financing
activities
C)Restricted contributions used for long-term purposes are reported as financing
activities
D)Four categories of cash flows are used
50) During the fiscal year ended December 31, 2015, the City of Johnstown issued 6%
general obligation serial bonds in the amount of $2,000,000 at 102 ($2,040,000) and
used $1,980,000 of the proceeds to construct a fire station. The $40,000 premium was
transferred to a debt service fund. The $20,000 left in the capital projects fund at the
end of the project was later transferred to the debt service fund. The bonds were dated
April 1, 2015 and paid interest on October 1 and April 1 . The first of 10 equal annual
principal payments was due on April 1, 2016 .
What would be the amount of expenditures recorded by the debt service fund for the
fiscal year ended December 31, 2015?
A)$320,000
B)$120,000
C)$ 90,000
D)$ 60,000
51) Assume the OMB apportions 1/4th of an appropriation to a federal agency for the
first quarter of the fiscal year. 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 credit to the account Fund Balance with Treasury
D)None of the above
52) The City of Charlestown levied property taxes in the amount of $10,000,000. It is
estimated that 2% will not be collected. The taxes were levied July 1, 2014 for the fiscal
year ended June 30, 2015 . During the year ended June 30, 2015, $8,900,000 in
property taxes were collected from this levy. It is estimated that $620,000 will be
collected during the next 60 days, $300,000 will be collected more than 60 days after
June 30, 2015, and $180,000 will never be collected.
How much will the city report as Deferred Inflow – Property Taxes in its June 30, 2015
government-wide Statement of Net Position?
A)$ 0
B)$180,000
C)$ 300,000
D)$ 620,000
53) The governmental funds report a total of $2,000,000 Transfers In and $1,500,000
Transfers Out. To consolidate governmental activities what amount will be eliminated
from the Transfers In and Transfers Out accounts among the governmental funds?
A) $500,000
B) $1,500,000
C) $2,000,000
D) $3,500,000
54) How should the acquisition of general fixed assets acquired by capital leases be
accounted for?
55) St. Marks is a private not-for-profit hospital. At the end of December 2014, a donor
pledged to make five payments of $50,000, beginning on January 1, 2015 . The
contributions are restricted to pay for operations in those years. The present value of
these payments is $223,255, discounted at 6%. The contribution was not restricted as to
purpose. Record all entries required for 2014 and 2015 .
56) Identify the accounting standard setting bodies for U.S. commercial, private
not-for-profits, public not-for-profits, state and local governments, and the federal
government.
57) Identify and describe the required supplementary information schedules that must
be prepared when using the modified approach.
58) What is the rule for determining whether a governmental fund, other than the
General Fund, is a major fund?