1. Not-for-profit health care organization financial statements include a
a.Statement of Cash Flows
c.Statement of Revenues, Expenses, and Changes in Fund Balance
b.Statement of Activities
d.Statement of Budget to Actual
2.Not-for-profit health care organization financial statements include a
a.Statement of Net Assets
c.Statement of Operations
b.Statement of Activities
d.Statement of Budget to Actual
3.A not-for-profit health care organization Statement of Operations displays the
a.cash balance at the end of the year
c.net cash used by operating activities
b.amount of operating income
d.classified net assets
4.When the Allowance for Doubtful Accounts is adjusted, the expense is charged to
a.Charity Care
c.Doubtful Account Expenses
b.Provision for Bad Debts
d.Reservation of Fund Equity
5.Public colleges and universities follow accounting standards issued by
a.GASB
c.AICPA
b.FASBd.NACUBO
6. GASB Statement No. 35 requires governmental colleges and universities to
a.follow the GASB Statement No. 34 financial reporting model
c.use the 1995 AICPA Audits of Colleges and Universities financial reporting model
b.produce a Statement of Operations
d.only use the modified approach for infrastructure assets
7.A college or university is classified as governmental if
a.the governing board is appointed by the college president
c.the governing board is publicly elected
b.the university pays corporate income taxes
d.all of the above
8.The Coleville Community College can levy taxes, issue tax-exempt debt and the governing board is publicly elected. The Coleville Community College is a
a.private not-for-profit organization
c.business-type activity
b.governmental organization
d.both b and c are correct
9.Governmental colleges and universities implementing GASB Statements No. 34 and 35 will
a.no longer use funds
c.use invested in capital assets net of related debt, restricted and unrestricted net asset classes
b.use restricted, unrestricted and temporarily restricted net asset classes
d.none of the above
10.Colleges and universities may elect to record transactions directly into net asset classes rather than
a.the Statement of Activities
c.funds
b.the Statement of Operations
d.liabilities
11.Governmental colleges and universities display student financial aid as a(n)
a.discount
c.it is not displayed
b.expense
d.expenditure
12.A public college provides scholarship assistance of $8,000,000 to its students. When the students register for classes the college applies $7,500,000 of the financial aid to their tuition and fee bills of $10,000,000 and students receive $500,000 in cash. The amount that will be recognized as tuition and fee revenue by the college is
a.$10,000,000
c.$2,500,000
b.$2,000,000
d.$9,500,000
13.A public university bills $80,000,000 in tuition and fees and provides $23,000,000 in financial aid. The university refunds in cash $800,000 of this financial aid directly to students.What amount will the university report as tuition and fee revenue?
a.$80,000,000
c.$57,000,000
b.$79,200,000
d.$57,800,000
14.A public college has tuition and fee billings of $30,000,000 and provides $6,000,000 in financial aid to students. The students apply $5,200,000 of this financial aid to their tuition and fee bill and take the excess in cash. What amount is reported as an expense for financial aid?
a.$6,000,000
c.$800,000
b.$5,200,000
d.$6,800,000
15.A public college and university have tuition and fee revenue of $18,000,000 for the summer semester that bridges two fiscal years. Sixty percent of the instruction takes place in the next fiscal year and the university decides to allocate the revenue on that basis. The journal entry to record this transaction in the current fiscal year will include
a.$10,800,000 in revenue
c.$10,800,000 in deferred revenue
b.$18,000,000 in revenue
d.$7,200,000 in deferred revenue
16.A patron gets a call from the Metropolitan Opera Society and pledges $1,000 to be used for general operations. The Metropolitan Opera Society will record
a.Contribution Revenue – Unrestricted
c.Contribution Revenue – Permanently Restricted
b.Contribution Revenue – Temporarily Restricted
d.nothing because it is only an oral pledge
17.The Humane Society conducts a fund-raising drive by telephone and has total pledges of $55,000 and notes on other possible donors who were still considering making pledges of $8,000. What amount of contribution revenue will be recorded?
a.$55,000
c.$8,000
b.$63,000
d.Zero
18.A donor makes a pledge to the zoo of $8,000 that will be paid in four installments of $2,000 each this year. The first installment of $2,000 is mailed in with the pledge card and the zoo will record
a.Contribution Revenue – Temporarily Restricted of $8,000
c.Contribution Revenue – Unrestricted of $2,000
b.Contribution Revenue – Temporarily Restricted of $6,000
d.both b and c
19.A local charity received a $1,000 pledge that the donor agrees to pay next year. This is a(n)
a.unconditional, unrestricted contribution
c.conditional, unrestricted contribution
b.unconditional, restricted contribution
d.conditional, restricted contribution
20.A woman cleans out her attic and takes her thirty-year old clothes to her local Goodwill store. She estimates she could get $50 for these if she held a garage sale. The Goodwill store sorts the clothes and determines they cannot be used or sold and puts them in the pile that will go to the landfill. Goodwill should record
a.a loss equal to amount of the dumping fee
c.nothing
b.a $50 unrestricted contribution
d.a $50 unrestricted contribution net of the dumping fee
21.The League of Women Voters meets once a month in a conference room that is made available free by a local hotel and spends $25 for coffee and cookies at the hotel. The normal rental rate for this room is $150. The League will record
a.nothing
c.$125 unrestricted contribution
b.$150 temporarily restricted contribution
d.$150 unrestricted contribution
22.A local corporation provides blankets worth $5,000 during a winter blizzard to be handed out by the homeless shelter to the needy. The shelter will record
a.an unrestricted contribution of $5,000
c.a temporarily restricted contribution of $5,000
b.an asset and liability of $5,000 each
d.none of the above
23.A contributed service may be recognized as contribution revenue if it is a
a.service that helps the organization
c.skill the organization normally purchases
b.specialized skill possessed by the individual
d.b and c
24.A Certified Public Accountant provides 100 hours of free audit services to a local museum that is valued at $50 an hour and also helps out by spending 100 hours helping clean and landscape the grounds. The museum would record contribution revenue of
a.$5,000
c.zero
b.$10,000
d.none of the above
25.A sculpture worth $22,000 is donated to a botanical garden that has an outdoor sculpture park. The botanical garden has decided to capitalize their sculpture collection so the donation would be recorded as a
a.unrestricted contribution
c.temporarily restricted contribution
b.permanently restricted contribution
d.invested in capital assets net of related debt26.A viewer makes a $100 pledge to the local public broadcasting station and receives a coffee mug valued at $2 in return. The station will record contribution revenue in the amount of
a.$100
c.$102
b.$98
d.zero
27.Supporting services include
a.fund-raising activities
c.management and general
b.membership development d.all of the above
28.Not-for-profit organizations record capital assets in the
a.capital asset account
c.depreciation account
b.property and equipment account
d.net assets account
29.Not-for-profit organizations classify net assets as
a.conditional or unconditional
c.temporarily restricted, permanently restricted or unrestricted
b.restricted or unrestricted
d.restricted, unrestricted and invested in capital assets net of related debt
30.Investment income or net appreciation generated from unrestricted donated assets should be reported a.as a change in unrestricted net assets
c.as a change in cash
b.where the donor specified
d.as a change in contributions
31.FASB Statement No. 124 requires that losses on investments of a donor-restricted endowment fund will
a.reduce temporarily restricted net assets first
c.reduce unrestricted net assets first
b.reduce the endowment
d.be charged off as an expense
32.The basic financial statements for a not-for-profit opera society include a
a.Statement of Activities
c.Statement of Budget to Actual
b.Statement of Net Assets
d.Balance Sheet
33.The basic financial statements for the American Red Cross include
a.Statement of Net Assets
c.Statement of Budget to Actual
b.Statement of Functional Expenses
d.all of the above
34.The Statement of Functional Expenses is only required for
a.art museums
c.religious organizations
b.labor unions
d.voluntary health and welfare organizations
35.The Statement of Financial Position classifies assets, liabilities and net assets by
a.fund
c.unrestricted, temporarily restricted or permanently restricted
b.program or supporting service
d.revenues or expense
36.The primary government’s financial reporting entity includes
a.organizations for which the primary government is an issuer of conduit debt
c.organizations that receive grants from the primary government
b.organizations for which the primary government is financially accountable
d.organizations that collect taxes for the primary government
37.Financial accountability exists if the primary government
a.collects taxes for the entity but cannot impose its will on the entity
c.cannot impose its will on the organization
b.appoints a majority of the governing body and is responsible to fund any deficit incurred by the organization
d.appoints a majority of the governing body and collects taxes and issues conduit debt for the entity
38.A primary government would have a potential financial benefit or burden from another organization if the primary government can
a.modify the organization’s budget
c.modify the organization’s fees
b.use the organization’s resources
d.appoint the organization’s finance director
39.Component units are
a.all other legally separate governmental entities that are located within a county
c.other organizations that should be included to prevent the financial statements from being misleading
b.all funds of the primary government
d.all entities that participate in an external pool
40.A component unit is blended if
a.the primary government can use or access the organization’s resources
c.the primary government is obligated in some manner to repay the debt of the organization
b.the primary government can impose its will and appoint a majority of the governing board
d.the governing bodies of the component unit and the primary government are substantially the same
41.Discretely presented component units are shown on the government-wide financial statements
a.in a separate column(s) of the Statement of Net Assets
c.only as a footnote disclosure
b.blended with the primary government’s data
d.in the governmental activities column of the Statement of Net Assets
42.The Management’s Discussion and Analysis
a.is optional under the GASB Statement No. 34 financial reporting model
c.should provide an analysis of significant variations between the original and final budget
b.should only discuss events that occurred during the fiscal year
d.should include all notes to the financial statements
43.Required governmental fund financial statements include
a.Statement of Net Assets and Statement of Revenues, Expenditures and Changes in Fund Balances
c.Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balances
b.Balance Sheet and Statement of Activities
d.Statement of Net Assets and Statement of Activities
44.A government must designate major and nonmajor funds for
a.all fund categories
c.each governmental and proprietary fund
b.each governmental and fiduciary fund
d.each governmental and enterprise fund
45.The major funds of a financial reporting entity would
a.be presented in a separate column in the government-wide statements
c.include an Enterprise fund if its assets are 10% or more of the corresponding element for all funds
b.always include the General fund
d.both a and b
46.What are the two major sections of the Governmental Funds Balance Sheet?
a.Assets; Liabilities and Fund Balances
c.Assets and Liabilities; Net Assets
b.Net Assets; Liabilities and Fund Equity
d.Assets; Liabilities and Net Assets
47.On the fund financial statements, assets and liabilities are
a.listed in alphabetical order
c.listed in order of relative liquidity
b.classified as reserved and unreserved
d.classified as unrestricted, temporarily restricted or permanently restricted
48.On the Governmental Funds Balance Sheet there is a separate column for
a.each governmental fund and a total for all governmental funds
c.the General fund, major governmental funds combined, nonmajor funds combined, and a total of all funds
b.the General fund, each major governmental fund, and a total of all component unit governmental funds
d.each major governmental fund, nonmajor governmental funds combined, and a total of all governmental funds
49.The governmental fund financial statements must include
a.component unit governmental fund totals
c.the classification of fund balance as designated and undesignated
b.a summary reconciliation to the government-wide financial statements
d.details of the six-step conversion to the government-wide financial statements
50.In the conversion from the governmental fund financial statements to the government-wide statements, the amount of capital assets and accumulated depreciation area.included as a capital outlay expenditure
c.increase the amount of total net assets
b.added as noncurrent assets
d.both b and c
51.The reconciliation of total governmental fund balances on the Governmental Funds Balance Sheet to net assets of governmental activities in the government-wide Statement of Net Assets includes
a.adding assets and liabilities of Internal Service funds
c.adding other long-term assets that are deferred in the funds
b.adding general long-term liabilities
d.all of the above
52.In the conversion to the government-wide financial statements, assets and liabilities of the Internal Service funds area.added to the governmental activities assets and liabilities
c.added to the component unit assets and liabilities
b.added to the business-type activities assets and liabilities
d.not reported
53.In the conversion of the governmental fund financial statements to the government-wide statements the amount of long-term debt issued during the year is converted from
a.Bond Proceeds Revenue to Bonds Payable Liability
c.Other Financing Sources to Bonds Payable Liability
b.Bonds Payable Liability to Other Financing Sources
d.Cash with Fiscal Agent to Other Financing Sources
54.In the consolidation process of preparing the government-wide financial statements
a.interfund transfers between governmental funds are consolidated and eliminated
c.interfund borrowings between governmental and proprietary funds are totaled up and netted out
b.internal balances between governmental and proprietary funds are eliminated
d.all of the above
55.Proprietary fund financial statements
a.are prepared using the economic resources measurement focus
c.classify all funds as major or nonmajor
b.include a Statement of Activities
d.all of the above
56.The Proprietary Funds Statement of Net Assets classifies net assets as
a.restricted and unrestricted
c.designated and undesignated
b.invested in capital assets net of related debt; reserved and unreserved
d.invested in capital assets net of related debt; restricted and unrestricted
57.The required government-wide financial statements include the
a.Balance Sheet and Statement of Activities
c.Statement of Activities and Statement of Net Assets
b.Reconciliation Schedule, Statement of Net Assets and Statement of Cash Flows
d.Six-step Conversion Worksheet, Statement of Activities and Statement of Net Assets
58.The government-wide Statement of Net Assets
a.displays the net cost of providing governmental services
c.classifies net assets as invested in capital assets, net of related debt; reserved; or unreserved
b.displays a separate column for governmental activities, business-type activities, total primary government and component unit data
d.all of the above
59.Which of the following are allocated when preparing the government-wide Statement of Activities?a.Depreciation expense for general infrastructure
c.Depreciation expense for assets associated with identified functions
b.Interest expense on general obligation bonds
d.All indirect expenses
60.The government-wide Statement of Activities requires revenues to be identified as
a.either general or program
c.either exchange or nonexchange
b.either operating or nonoperating
d.either governmental or business-type
61.The government-wide Statement of Activities a.presents the net expense or revenue of the governmental and business-type activities of the primary government
c.presents the net expense or revenue of the governmental and business-type activities of each component unit
b.presents the net expense or revenue of each fund of the primary government
d.both a and c
62.Required Supplementary Information for the financial reporting model includes
a.Management’s Discussion and Analysis
c.Budgetary Comparison Schedules
b.information about defined benefit pension plan funding
d.all of the above
63.In what account would the General fund record a loan to an Enterprise fund?
a.Tax Anticipation Notes Payable
c.Due to Other Funds
b.Due from Other Funds
d.Fund Balance
64.A proprietary fund would record inventory using
a.the purchase method
c.either a or b
b.the consumption method
d.none of the above
65.If the purchase method of recording inventory is used and there is a large amount of inventory on hand at fiscal year end, the inventory would
a.be recorded as a liability
c.be recorded as a prepaid expense
b.not require an entry
d.be recorded as an asset with an offsetting reserve of fund balance
66.A governmental fund would record the annual premium for liability insurance in
a.an expense account
c.an amortized premium account
b.a prepaid asset account
d.both a and b
67.Noncurrent assets are recorded in
a.alphabetical order
c.the General Fund
b.Enterprise funds
d.both b and c
68.Which of the following would be classified as a restricted asset
a.General fund designates $100,000 for city hall expansion project
c.General fund designates unrestricted donation
b.Enterprise fund designates $30,000 for purchase of equipment
d.Enterprise fund designates revenues for repayment of revenue bond principal and interest
69.A street light could be classified as
a.a capital asset
c.part of a network of assets
b.infrastructure
d.all of the above
70.Inexhaustible capital assets are
a.depreciated over the anticipated useful life
c.depreciated under the modified approach
b.recorded as infrastructure
d.not depreciated
71. Which of the following is NOT required under the modified approach to reporting infrastructure?
a.Estimate of annual replacement cost of infrastructure at established condition level
c.Complete condition assessment of infrastructure every three years
b.Estimate of annual funding needed to maintain and preserve infrastructure at established condition level
d.Current inventory of infrastructure assets
72.An Enterprise fund would record the payment of debt service principal in what account?
a.Bonds Payable (long-term liability)
c.Other Financing Uses
b.Debt Service Principal Expenditure
d.Due to Other Funds
73.An accrued interest liability is recorded at fiscal year-end for outstanding interest on bonds in
a.a Debt Service fund
c.an Enterprise fund
b.a Cash with Fiscal Agent fund
d.none of the above
74.A deferred revenue account is used to record
a.revenue that has not been received and is unearned
c.revenue that has been received but is unearned
b.unamortized premiums
d.unrealized gains and losses
75.The General fund would record the amount it owes the Utility fund for electricity in what account?
a.Internal Balances
c.Electric Expense
b.Due to Utility Fund
d.Advance to Utility Fund
76.The General fund would record the issuance of general obligation bonds as a
a.debit to General Obligation Bonds Payable
c.credit to General Obligation Bonds Payable
b.debit to Other Financing Sources
d.none of the above
77.Term bonds area.generally issued to achieve level debt service
c.classified as long-term if they have a take-out agreement
b.a current liability because they have a call feature
d.issued with the entire amount of principal due at the same time
78.Compensated absences should be recorded as a liability
a.at the start of each fiscal year for the estimated value of the annual benefit
c.when employees are compensated for sick time
b.when earned if employees will be paid for unused vacation time upon retirement
d.when employees are compensated for either sick time or vacation time
79.A government should record a claims and judgments liability when
a.a lawsuit is filed
c.the amount of the claim can be estimated
b.it is probable a claim will be paid
d.both b and c
80.A state requires local governments to provide free health care to homeless individuals that meet state guidelines and provides funding for the program. The local government will record these monies as a(n)
a.exchange transaction for heath care
c.government-mandated nonexchange transaction
b.imposed nonexchange transaction
d.voluntary nonexchange transaction
81.The state government requires a city to clean up a toxic waste site and provides $3,000,000 to assist with the clean up. The city will record the $3,000,000 grant from the state when
a.the site is cleaned up
c.the monies are received from the state
b.the grant is awarded and eligibility requirements have been met
d.either b or c, whichever is first
82.Eligibility requirements may include
a. required characteristics of recipients
c.contingencies
b.time requirements
d.all of the above
83.A citizen donates $5,000,000 to fund construction of a new public recreational center with the requirement that the city obtain additional donations in the amount of $3,000,000. The $5,000,000 will be recognized by the city when
a.it is pledged.