Questions and Answers of Accounting For Governmental And Nonprofit Entities

Primary responsibility for accounting for agency resources and expended appropriations rests witha. each individual agency.b. the Department of the Treasury.c. the Government Accountability Office.d.
A federal agency's accounting system does not need to include information pertaining toa. expended appropriations.b. fixed assets.c. obligations.d. expenses.e. All of the above must be included.
Direct labor costs incurred by a federal agency during a period will be reflected in the agency's budgetary accounts asa. a debit to Expended Appropriations and credit to Cash.b. a debit to Expended
On June 1,20X7, the Department of Labor ordered $\$ 10,000$ worth of stationery and office supplies from an authorized contractor. At the time of the purchase order, this transaction should be
Unapportioned Authority is reclassified as Apportionments whena. the Office of Management and Budget releases enacted appropriations to the federal agency.b. the appropriate agency officials assign
Six proprietary financial statements have been identified for use by a federal agency. These statements are required to be prepared and presented fora. government-wide financial reporting, but not
Which of the following financial statements is not required to be reported on a governmentwide basis?a. Balance Sheet.b. Statement of Net Cost.c. Statement of Changes in Net Position.d. All of the
Prepare necessary journal entries to record the six transactions in Exercise 19-2 in the proprietary accounts of ABC Agency.
Prepare the general journal entries to adjust and close the Environmental Enhancement Agency's accounts at year-end, assuming the agency is financed solely from appropriations. Appropriations
Using the information from Problem 19-4, prepare the three financial statements illustrated in the chapter for federal agencies:(a) Balance sheet(b) Statement of net cost(c) Statement of changes
1. The statistical section of a comprehensive annual financial report (CAFR)a. is required for fair presentation of a government's financial position and operating results.b. is required in the
A county transit authority is fiscally dependent upon the county because the transit authority—a legally separate entity—cannot set its fares without the substantive approval of the county
In which of the following circumstances would a potential component unit always be fiscally dependent upon a city?a. The city is the sole source of revenue of the potential component unit.b. The
In which of the following circumstances would a city be viewed as having appointed members of a potential component unit's governing body for the purposes of determining if the appointment criterion
If a government both created and can abolish a potential component unit, it is financially accountable for that other entitya. unless the potential component unit has a separately elected governing
A state college treats the university foundation as a component unit in accordance with GASB Statement No. 39.The college is a component unit of the state. The foundation would be included in the
Assuming that a government has some discretely presented component units that have only proprietary activities and others that have only governmental fund activities, a “Component Units” column
In which of the following situations would blending be required under GAAP?a. The primary government appoints the voting majority of the component unit governing body, can impose its will on the
All of the following information would be included in the financial section of a CAFR except thea. letter of transmittal.b. Management's Discussion and Analysis.c. independent auditor's
Which of the following is not a required category of information included in the statistical section of a CAFR?a. Financial trends information.b. Revenue capacity information.c. Debt capacity
A combining statement would be required to be included in a CAFR for which of the following scenarios?a. There are multiple major Enterprise Funds.b. There are multiple Internal Service
Which of the following statements regarding the reporting of individual fund financial statements is true?a. Detailed budgetary information for the General Fund may be included as an individual fund
How many columns at a minimum would be reported on the face of Chestnut County's government-wide Statement of Net Assets?a. 2b. 3c. 4d. 5e. None of the above.Chestnut County has the
How many major Special Revenue Funds would the County report in the governmental funds financial statements?a. 1b. 3c. 4d. 5e. None of the above.Chestnut County has the following:One General
Assume Chestnut County prepares a CAFR. Combining financial statements would be required fora. Internal Service Funds only.b. Special Revenue Funds only.c. all governmental fund
How many major fund columns will be reported in the governmental funds financial statements?a. 2b. 4c. 6d. 7e. 8Chestnut County has the following:One General Fund Three major Special Revenue
Which of the following reporting options for Chestnut County's discretely presented component units would not be allowed by GAAP?a. Assuming the discretely presented component units are governmental
Potential component units that are ultimately excluded from the reporting entity but require at least minimal disclosure in the financial statements could include all of the following excepta. joint
The CAFR must include all of the following excepta. a letter of transmittal.b. a compliance section.c. a financial section.d. a statistical section.e. an introductory section.f. All of the
Bowles County’s fund structure is as follows:Assume that Special Revenue Fund #1, the Capital Projects Fund, Enterprise Fund #1, and Enterprise Fund #4 are major funds.Assume that Special Revenue
Which of the following sets of circumstances require a government to treat another entity as a component unit of its reporting entity? Why? 1. The government appoints 3 of the 7 members of the
Which of the following cases meet the substantively the same governing body criterion and indicate that a component unit should be blended in a city's financial statements instead of discretely
The introductory section of the CAFR would potentially include all of the following information excepta. a listing of elected officials.b. a listing of key nonelected officials.c. a letter of
Indicate in which section of the CAFR the following items would appear using the following key: (1) Introductory, (F) Financial, or (S) Statistical Computation of legal debt limit Organizational
Indicate where the following financial information for the city of Green Hope would be located within the financial section of their CAFR using the following key: (GW) Government-wide financial
Through an Internet search, find at least 10 different examples of reporting entity note disclosures from available CAFRs. Provide a mixture of both blended and discretely presented component units.
The following descriptions appear in the note disclosures of the city of St. Louis, Missouri, financial statements for the year ended June 30, 20X5: The St. Louis Municipal Finance Corporation is
Some VHWOs and ONPOs are required to follow the guidance of SFAS Nos. 116, 117, 124, and 136. Others are not permitted to do so. Why do different standards apply? Which organizations must apply the
Securities donated to a voluntary health and welfare organization (VHWO) should be recorded at thea. donor’s recorded amount.b. fair market value at the date of the gift. c. fair market value at
How much should the center report as contributions revenue for 20X5 from the pledges?a. $0b. $405,000c. $810,000d. $413,000The Charles Vernon Eames Community Service Center is a nongovernment
The Charles Vernon Eames Community Service Center is a nongovernment VHWO financed by contributions from the general public. During 20X5, unrestricted pledges of $900,000 were received, half of which
Cura Foundation, a nongovernment VHWO supported by contributions from the general public, included the following costs in its Statement of Functional Expenses for the year ended December 31,
The permanently restricted net assets of an ONPO include net assets from which of the following? a. b. C. d. Term Endowment Gifts No No Yes Yes Capital Asset Restricted Gifts No Yes Yes No
During the years ended June 30, 20X5, and 20X6, a nongovernment ONPO conducted a cancer research project financed by a $2,000,000 restricted gift. This entire amount was pledged by the donor on July
A nongovernment voluntary health and welfare organization (VHWO) received an unconditional pledge in 20X5 from a donor specifying that the amount pledged be used in 20X7.The donor paid the pledge in
What amount of net assets released from restrictions should the ONPO in question 8 report in its Statement of Activities for 20X6?a. $0b. $800,000c. $1,100,000d. $2,000,000
VHWO GAAP financial statements are prepared under which basis of accounting?a. Cashb. Accrualc. Modified accruald. Coste. Modified cash
On December 31, 20X7, the Greater Ottumwa (Iowa) United Fund, a VHWO, had $150,000 in pledges receivable from 20X7 pledges, all of which were receivable during 20X8. During the past 5 years, this
The primary financial statement(s) that must be prepared by other not-for-profit organizations (ONPOs) do not include a:a. Balance Sheet.b. Statement of Cash Flows.c. Statement of Functional
Unconditional promises to give that are restricted for the purpose of acquiring fixed assets should be recognized as contributions revenue by nongovernment VHWOs and ONPOs in the period(s)
A nongovernment ONPO incurred expenses for its public service programs. The ONPO had resources available from prior year donations that were restricted by donors to finance expenses for these public
Which of the following would not affect a nongovernment ONPO Statement of Activities?a. Depreciation expense.b. Expenditure of restricted contributions for the restricted purpose in the current
A regular contributor to a not-for-profit organization has agreed to directly pay the rental charges for a local banquet facility that will be used for the organization’s annual financial campaign
What characteristics distinguish not-for-profit contributions from exchange or agency transactions?a. They are generally unconditional in that they are not subject to future or uncertain events that
Nongovernment not-for-profit organizations present a Statement of Cash Flows in accordance witha. GASB Statement No. 9.b. GASB Statement No. 34.c. FASB Statement No. 95.d. Hither GASB Statement
A nongovernment not-for-profit organization would present all of the following categories of cash flows excepta. cash flows from noncapital financing activities.b. cash flows from investing
Not-for-profit reporting standards require net assets to be reported in all of the following classes excepta. unrestricted net assets.b. invested in capital assets, net of related
Which of the following is not a common characteristic of a VHWO?a. Typically, no fees or only minimal fees are charged for services that a VHWO provides.b. Resource providers are typically the
A nongovernment VHWO or ONPO has the following resources:Additional information provided indicates that land with a recorded value of $1,500,000 (which was used in calculating the amount of
The bookkeeper of the West Texas Zoological and Botanical Society, a nongovernment ONPO, prepared the following Balance Sheet:Additional Information 1. The Endowment Fund consists solely of
Following is the adjusted trial balance of the Community Association for Handicapped Children, a nongovernment voluntary health and welfare organization, at June 30, 20X6: Community Association for
The following information for 20X7 was derived from the records of a nongovernment ONPO or VHWO:RequiredPrepare a Statement of Activities for this nongovernment not-for-profit organization for the
Which standards setting body has the authority for establishing GAAP for colleges and universities?
What fund types should be used for a government university engaged in both governmental and business-type activities?
How should government college and university revenues and expenses be classified for external financial reporting purposes?
GASB Statement No. 35 requires that government colleges and universities engaged solely in business-type activities presenta. a Statement of Net Assets.b. a Statement of Cash Flows.c. a Statement
Government colleges and universities solely engaged in business-type activities would present the following classes of equity excepta. invested in capital assets, net of related debt.b. restricted
Which of the following statements about accounting for government colleges and universities is false?a. Government colleges and universities engaged in business-type activities commonly account for
A government college or university's Statement of Cash Flows would potentially report all of the following categories of cash flows excepta. cash flows from operating activities.b. cash flows from
Restricted net assets for a governmental college or university are commonly subclassified fora. designated net assets.b. reserved net assets.c. nonexpendable net assets.d. expendable net
How should endowment investments that are permanent in nature be reported on a university Statement of Net Assets?a. As a noncurrent assetb. As a current or noncurrent asset as per the donor’s
Scholarships to students that are being paid from grants the university received (on the students' behalf) for such purposes should be reported asa. a reduction of such grants.b. expenses in the
Scholarships to students that are being paid from the university's own resources should be reported asa. areduction of tuition and fee revenues.b. expenses in the GAAP financial
Which of the following represent common characteristics for the accounting and financial reporting of loan funds in colleges and universities that engage solely in business-type activities?a. Often,
Colleges and universities that engage in both governmental and business-type activities are required to report which of the following external financial statements?a. The same financial reporting
For the spring semester of 20X4, Lane University assessed its students $3,400,000 (net of refunds) of tuition and fees for educational and general purposes. However, only $3,000,000 was expected to
During the years ended June 30, 20X6, and 20X7, Sampson University conducted a diabetes research project financed by a $2,000,000 gift from an alumnus. This entire amount was pledged by the donor on
On January 2, 20X6, Tim Brooks established a $500,000 trust at Wyndham National Bank, the income from which is to be paid to Mansfield University for general operating pur- poses. The Wyndham
The carrying value of the Annuities Payable account of a collegea. should be adjusted to reflect changes in actuarial assumptions such as life expectancies or yield estimates.b. should be
Assume that a wealthy alumnus donated $1 million to Chavis University to provide loans to qualifying students. Though not required by the donor, the university’s Board of Trustees voted to
Assume that a wealthy alumnus donated $1 million to Chavis University to provide loans to qualifying students. Though not required by the donor, the university’s Board of Trustees voted to
Assume that a wealthy alumnus donated $1 million to Chavis University to provide loans to qualifying students. Though not required by the donor, the university’s Board of Trustees voted to
Kashickey College, an institution considered to be governmental in nature, had the following events occur during the year:Tuition scholarships of $45,000 were granted during the year and $7,500 of
Kashickey College, an institution considered to be governmental in nature, had the following events occur during the year:Tuition scholarships of $45,000 were granted during the year and $7,500 of
Kashickey College, an institution considered to be governmental in nature, had the following events occur during the year:Tuition scholarships of $45,000 were granted during the year and $7,500 of
The trial balance of Boegner University, a government university, on September 1, 20X7, was as follows:Boegner University’s dormitory and food service facilities are operated as auxiliary
The following transactions of Cummings State College occurred during the 20X5-20X6 fiscal year:1. Cash was received as follows for the purposes noted: Educational and general: Endowments
Ransom University, a government university, had no endowments prior to September 1, 20X7. The following transactions took place during the fiscal year ended August 31, 20X8:1. At the beginning of the
The following transactions occurred during the 20X6 fiscal year of Pate County College. 1. A donation of $150,000 was received in cash for the purpose of making loans to students. 2. Cash in the
The trial balance of Farley College, a government university, as of September 1, 20XS, includes the following: Land..... Buildings.... Accumulated Depreciation-Buildings Equipment... Accumulated
Analysis of the accounts of Jonimatt State College for the fiscal year ended June 30, 20X7, provided the following information: Revenues from: Tuition and fees... State appropriations .... Federal
Why should hospitals report only the net amount of patient service revenue in their Statement of Revenues, Expenses, and Changes in Net Assets?
A government hospital's assets include the following:a. $\$ 2,000,000$ set aside by the hospital board as an endowment to support research for curing the common coldb. $\$ 25,000,000$ donated by
Following are various types of revenues, gains, and other amounts that may be received or accrued by a government hospital. For each type of revenue or gain, indicate whether it should typically be
Which of the following must be prepared for Agency Funds as part of a government’s Basic Financial Statements?a. Statement of changes in net assets.b. Statement of revenues, expenditures, and
The long-term debt issued in a situation like that described in question 2 should be reported by the government ina. an Agency Fund.b. a Capital Projects Fund.c. a Debt Service Fund.d. the
Which of the following items should be accounted for in an Agency Fund when a special assessment project is financed by issuing special assessment debt for which the government is not obligated in
Which of the following accounts typically would be used by an Agency Fund?a. Revenue.b. Notes receivable.c. Bonds payable.d. Cash.
When a Tax Agency Fund is used, the governmental funds in which the taxes should ultimately be accounted for should report tax revenuesa. when levied.b. when received by year-end or not more than
Which of the following statements is not required to be presented for an Investment Trust Fund?a. Statement of net assets.b. Statement of changes in net assets.c. Statement of cash flows.d. All

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