Questions and Answers of Government And Not For Profit Accounting

A not-for-profit university operates its college bookstore as an auxiliary enterprise. During the year the store has revenues of $20 million and expenses of $18 million. In its statement of
Public universities should report state appropriations asa. Operating revenues.b. Nonoperating revenues.c. Noncapital revenues.d. Special revenues.
In 20X0, a government university was awarded a federal reimbursement grant of $9 million to carry out research. Of this, $6 million was intended to cover direct costs and $3 million to cover
A not-for-profit university maintained an endowment of $400,000, the income of which was restricted for an annual conference on international relations. In a particular year, the fair value of the
Other factors held constant, which of the following colleges is likely to present the least risk that it will default on its bonds?a. One that admits 98 percent of applicantsb. One that draws the
Scholarships for which no services are required should be recorded as _________ and scholarships for which services are required should be recorded as _____ _a. Revenue deductions; expensesb.
In January 20X0, Kirkland University receives a pledge of $200,000 to be used exclusively to support research in a specialized area of communication disorders. The university's fiscal year ends on
Review the Statement of Activities of Hamilton College for the year ended June 30, 20X0, which is presented in Table 2-11. The statement indicates that during the year net assets increased by
A public university had tuition and fees for the year ended June 30, 20X0, in the amount of $18,000,000. Scholarships, for which no services were required, amounted to $1,400,000. Graduate
Review the financial statements of Hamilton College in Chapter 2, and respond to the following questions:1. What percentage of the college's total revenues (including nonoperating items and revenues
During the year, Griffin University's board of trustees established a $200,000 fund to be retained and invested for scholarship grants. The fund earned $12,000, which had not been distributed by
A public college should most likely report its athletic foundation as which of the following in its financial statements under GASE 39:a. Student serviceb. Component unitc. Fund from external
During the year, LeBlanc College received the following:• An unrestricted $70,000 pledge to be paid the following year• A $35,000 cash gift restricted by donors for study abroad scholarships• A
The December 31, 20X0, Statement of Net Assets of Mosholu Medical Center, a major urban hospital and research center, is presented.The following transactions and events occurred in 20Xl:1. The
A not-for-profit hospital signs a contract with an insurance company in which the company agrees to pay it $6 million in capitation fees for the year July 1, 20X0, through June 30, 20Xl. Between July
On June 30, 20X0, a county (government) hospital bought 3,000 shares of stock for $94,000 intending to hold the investment for its proposed expansion of its trauma center. The fair value of the stock
Please go to www.Guidestar.org, and download the Form 990 of three health-care organizations for 2018.1. Mental Health America of Greater Houston2. Southern Illinois Hospital Services3. Ronald
A not-for-profit hospital received a donor-restricted contribution of $10 million, which is used to purchase new equipment. It estimates that the useful life of the equipment will be 10 years with no
Ms. Wiley's estate donated land with a fair value of $600,000 and subject to a mortgage of $320,000 to Saint Joseph Hospital without any restriction. Which of the following entries should the St.
Hannah, an auditor, is performing a routine review of a not-for-profit hospital and noted the following account balances in the statement of operations for the fiscal year ending September 30,
The data below pertaining to two not-for-profit hospices were taken from GuideStar, an online database (www.guidestar. org) that provides information about not-for-profit organizations. Names and
JMH (a not-for-profit) Rehabilitation Center engaged in the following transactions during its most recent fiscal year: 1. Michael Vincent donated $625,000 to the hospital to help pay for the
Percy's community hospital would ordinarily include proceeds from the sale of balloons in the gift shop ina. In a separate entityb. Ancillary service revenuesc. Deductions from gift shop expensesd.
Below are the abridged operating statements of two not for-profit hospitals that serve similar populations.1. What is the performance indicator of the hospitals?2. Using the performance indicator,
A donor gave $100,000 to a not-for-profit hospital in 20X0 with the restriction that it be used for the purchase of equipment. Although the cash was received in 20X0, the equipment was purchased in
The Gulf Coast Hospital, a not-for-profit healthcare institute, issued $140 million in term bonds to finance the construction of a new cancer unit at its main hospital. Terms of the bond covenant
This problem was written by Dave Mest of Seton Hall University.The Dave Health-Care Center (DHCC)was created in 20X0 to provide medical services to low-income residents of DaveTown. DHCC had the
The Old-Fashioned Doc Clinic, a well-established health-care organization, received a $500,000 pledge in fiscal year 20X0 that was restricted to cover operating expenses. The gift was received over
Based on Saint Michael Hospital's established billing rate structure, the hospital would have earned patient service revenue of $8,500,000 for the year. However, Saint Michael does not expect to
Which of the following is not particularly indicative of a program's exposure to risk?a. Engagement of new independent auditorsb. Recently installed and untested computer systemsc. Past
Which of the following is least likely to impair the independence of a county auditor?a. He is appointed by the county manager and reports to the managerb. His responsibilities include preparing the
The requirement for a report on the schedule of findings and questioned costs is set forth in thea. AICPA's Professional Standardsb. GAO's Government Auditing Standardsc. Single Audit Actd. 0MB
The GAO's Green Book deals witha. Environmental issuesb. Federal investment policiesc. Internal controlsd. Waste, fraud, and abuse
What are "general" compliance requirements? Provide several examples.
Per the GAO standards, an auditor's reporta. Must disclose instances of material inefficienciesb. Can exclude from versions that will be made public information that would be harmful to national
What types of matters do "specific" requirements address?
The GAO reporting standards differ from those of the AICPA in that the GAO standards require the auditors to explicitly comment on their testing ofa. Financial transactionsb. Compliancec. Efficiency
Auditors have completed a draft of their report on a performance audit, which in several respects is critical of the program under review. The auditors shoulda. Refrain from discussing the findings
The federal government, through its various government agencies, engaged in the following transactions involving revenues.1. In the middle of its fisca l year, it rented l a nd to a tenant, a nother
The Business Development Corporation (BDC) , a federal agency (fictitious), makes loans to high-tech companies that satisfy specified criteria. The loans are intended to encourage research and
Among the most contentious of federal accounting issues is how the Federal Reserve System should be accounted for in the Financial Report of the U.S. Government.1. Review a recent balance sheet of
The financial statements of the Department of Veterans Affairs (VA) contained the following excerpt from a note entitled "Veteran Benefits":Certain Veterans, who die or are disabled from military
To help middle-income students finance the cost of their university educations, the Student Loan Authority guarantees student loans made by private b anks. By guaranteeing the loans, the agency
Why may it be unclear whether a particular organization associated with the federal government should be considered a federal reporting entity? What are the key criteria as to whether an entity
Per the FASAB, a federal entity should be considered a reporting entity and thereby must issue annual reports if ita. Is listed in the OMB 's Catalog of Federal Agenciesb. Has been designated as a
In the federal government, " proprietary accounts" are those thata. Provide the data required to prepare accrual-basis financial statementsb. Provide the data required to prepare budget-basis
Which of the following statements would summarize all entity transactions, in addition to net cost of operations, that affect net position?a. Statement of net costb. Statement of financingc.
In 20X0, Congress established a small business direct loan program. The program provides that qualifying businesses can obtain loans at a rate 5 percent below that prevailing on Treasury securities
Which of the following is an example of an "exchange" revenue?a. Proceeds from the sale of goods or servicesb. Transfers from another agencyc. An increase in an 0MB allotmentd. Collections of taxes
Review the most recent government-wide Consolidated Financial Report.1. What was the amount of the government's deficit for the year? What was the amount of its net position?2. What three departments
Go towww.USAspending.gov.1. In the latest year for which data are available, which state was the beneficiary of the greatest amount of total federal assistance. How much did it receive?2. Of that
The Waterville School District has an annual meeting with staff, students, and parents in the summer after the school year to review accomplishments in the school district and financials and address
A university's department of accounting would likely consider "number of students successfully passing the CPA exam" as ana. Outcome measureb. Output measurec. Input measured. Efficiency measure
In closing budgetary and expenditure accounts at year-end, a government shoulda. Debit appropriations and credit expendituresb . Credit appropriations and debit expendituresc. Debit expenditures and
In adopting and recording the budget, a government shoulda. Debit estimated revenues and credit revenuesb . Credit estimated revenues and debit fund balancec. Debit revenues and credit fund balanced.
Per GASE Statement No. 34, a budget-to-actual comparison must include columns for the actual results anda. The original budget onlyb. The final budget onlyc. Both the original and the final budgetd.
The implication is clear. The variance between the final budget and actual amounts is more significant than that between the original and final budget amounts. What is the rationale for giving
Which of the following types of budgets would be most likely to include a line item "purch ase of supplies"?a. Object classificationb. Performancec. Capitald . Program
The following relate to the town of Coupland (dollar amounts in thousands):Long-lived assets to be recognized in internal service fundsa. $0b. $140c. $900d. $1,260e . $1,040f. $1,400g. $2,200h.
The following relate to the town of Coupland (dollar amounts in thousands):Long-lived assets to be recognized in the general funda. $0b. $140c. $900d. $1,260e . $1,040f. $1,400g. $2,200h. $4,000i.
The following relate to the town of Coupland (dollar amounts in thousands):Revenue to be recognized in the general funda. $0b. $140c. $900d. $1,260e . $1,040f. $1,400g. $2,200h. $4,000i. $6,300j.
Central School District is awarded a $400,000 federal grant to implement and test a new way of teaching middle school math. The award stipulates that the district must provide a 20 percent match.a.
The following relate to the town of Coupland (dollar amounts in thousands):Revenue to be recognized in an enterprise funda. $0b. $140c. $900d. $1,260e . $1,040f. $1,400g. $2,200h. $4,000i. $6,300j.
Which of the following is not one of the FASB's financial reporting objectives?a. Providing information about economic resources, obligations, and net resourcesb. Providing information to help
Interperiod equity refers to a condition wherebya. Total tax revenues are approximately the same from year to yearb. Taxes are distributed fairly among all taxpayers, regardless of income levelc.
What is the significance for financial reporting of a government's power to levy a tax? How does it affect the government's overall fiscal strength?
Interperiod equity refers to a condition wherebya. Total tax revenues are approximately the same from year to yearb. Taxes are distributed fairly among all taxpayers, regardless of income levelc.
Governments differ from businesses in that theya. Do not raise capital in the financial marketsb. Do not necessarily engage in transactions in which they "sell" goods or servicesc. Are not required
What is the significance for financial reporting of the many restrictions that are placed on a government's resources?
The number of governmental units in the United States is approximatelya. 900b. 9,000c. 90,000d. 900,000
The primary objective of a not-for-profit organization or a government is toa. Maximize revenuesb. Minimize expendituresc. Provide services to constituentsd. All of the above
If businesses are "governed by the marketplace," governmentsare governed bya. Legislative bodiesb. Taxesc. Budgetsd. State constitutions
For each of the following indicate the amount of revenue that Beanville should recognize in its 20X2 (1) Governmentwide statements and (2) Governmental fund statements. Provide a brief
The GASB has identified four classes of nonexchange revenues:• Derived tax• Imposed• Government mandated• VoluntaryFor each of the following revenue transactions affecting a city, identify
A city levies property taxes of $4 billion in June 20Xl for its fiscal year beginning July 1, 20Xl. The taxes are due by January 31, 20X2. The following (in millions) indicates actual and anticipated
A state imposes a sales tax of 6 percent. The state's counties are permitted to levy an additional tax of 2 percent. The state dministers the tax for the counties, forwarding the proceeds to the
Kyle Township charges residents $100 per year to license household pets. As specified in a statute enacted in 20Xl, residents are required to purchase a license by October 1 of each year; the license
A city received two state grants in fiscal 20Xl. The first was an award for a maximum of $800,000, over a two-year period, to reimburse the city for 40 percent of specified costs incurred to operate
The board of trustees of an independent school district is contemplating several policy changes and other measures, all of which it intends to implement within the fiscal year that ends August 31,
In 20Xl, the Bakersville Independent School District incurred $12 million in expenditures for teachers' salary and benefits. In that year, the legislature of the state in which the district is
A city recently proposed the following "one-shot" measures to help balance its 20Xl general fund budget (the only budget that is required by law to be balanced). For each of the measures, indicate
In August 20Xl, the last month of its fiscal year, Goldwaithe Township issued $88,000 worth of tickets for parking and traffic violations. Of these, the township collected $45,000.It expects to
The following relate to three grants that the town of College Hills received from the state during its fiscal year ending December 31, 20Xl.Prepare journal entries to record the three grants.1. A
The city of Carlasville imposes a one percent sales tax in addition to that levied by the state. The state, however, collects the tax on behalf of the city. The state typically does not notify the
The Eaton School District engaged in the following transactions during its fiscal year ending August 31, 20Xl. • It established a purchasing department, which would be accounted for in a new
The following is an excerpt from a note to the financial statements of an actual major city. The city accounts for inventories on the consumption basis. One of the city's departments, which is
1. Prepare the journal entry in the general fund to reflect the vacation pay earned in 20Xl.2. Prepare the journal entry to reflect the payments for vacation days that had been earned in prior
A city is having fiscal problems in 20Xl. It expects to report a deficit in its general fund, the only fund that is statutorily required to be balanced.To eliminate the anticipated deficit the city
A town plans to borrow about $10 million and is considering three alternatives. A town official requests your guidance on the economic cost of each of the arrangements and advice as to how they would
A school district prepares its budget on a cash basis. It is contemplating the changes or actions that follow. For each, indicate the impact that the change would have (1) on yearending June 30 20Xl,
A city has adopted the following plan for compensated time off:• City employees are entitled to a specified number of days each year for holidays and vacation. The number depends on length of
All the amounts shown relate only to supplies. All purchases during the year were paid in cash.Assume that the city uses the consumption method to account for supplies.a. Reconstruct all journal
In 20Xl, city employees earned $1.4 million in sick leave that they did not take during the year. The city estimates that of this amount, $0.8 million will actually be paid to employees who take sick
Assume the same facts as in the previous question. The amount that the city should add to the liability account in the government-wide statement of net position as of year-end 20Xl isa. $0b. $0.1
In 20Xl, city employees earned $3.6 million in vacation pay that they did not use during the year. The city estimates that of this amount $2.8 million will be paid in 20X2 (out of amounts budgeted
Assume the same facts as in the previous question. The amount that the city should add to the liability account in the government-wide statement of net position as of year-end 20Xl isa. $0b. $2.8
Nolanville starts fiscal 20Xl with $25,000 in supplies. During the year, it orders $180,000 in supplies, receives $170,000, and uses $190,000. It accounts for inventories on the consumption basis. In
Assume the same facts as in the previous question. In its 20Xl government-wide financial statements, it should report Expense a. $170,000 b. $170,000 $190,000 $190,000 c. d. Inventory $ 0 $15,000 $
In May 20X3, Nolanville repaid $2 million of the bonds that it had issued in 20Xl. In its 20X3 fund and government-wide statements, Nolanville should report an expenditure/expense relating to the
During 20Xl Luling Township engaged in the following transactions related to modernizing the bridge over the Luling River. The township accounts for long-term construction projects in a capital

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