1. Which of the following is not a typical step in the budgeting process for a state or local government? (Points : 4)

Request by management for input on the budget Review and revisions of the budget by the administrative staff of each unit Public hearings for citizen input Approval by a majority vote of the citizenry

Question 2. 2. The schedule of legally required events in the budgeting process is generally referred to as the (Points : 4)

Budget docket. Legal timetable. Hearing schedule. Budget calendar.

Question 3. 3. When a not-for-profit (nongovernmental) organization spends money for the purpose for which an external donor intended, then the expense is reported as a (Points : 4)

Decrease in temporarily restricted net assets Decrease in unrestricted net assets Decrease in permanently restricted net assets Decrease in current-restricted fund balance

Question 4. 4. A significant deficiency of such magnitude that internal control components do not reduce the risk of detection or prevention of material misstatement to an acceptably low level is called a(an): (Points : 4)

Material weakness and significant deficiency. System design deficiency. Unacceptable reportable condition. Audit alert item.

Question 5. 5. Which of the following financial concepts has been defined by the GASB as "the probability that a government will meet both its financial obligations to creditors, consumers, employees, taxpayers, suppliers, constituents, and others as they become due and its service obligation to constituents, both currently and in the future?" (Points : 4)

Liquidity Financial position Financial leverage Financial condition

Question 6. 6. The responsibility of governments to justify that their actions in the current period have complied with public decisions concerning the raising and spending of public monies in the short-term is known as: (Points : 4)

Operational accountability. Fiduciary responsibility. Legal accountability. Fiscal accountability.

Question 7. 7. In budgeting revenues, state and local government administrators should (Points : 4)

Be careful not to utilize unauthorized sources or exceed authorized ceilings on revenues from specific sources. Ensure that at least the amount of revenues needed to meet spending needs are raised, even if authorized ceilings on some revenue sources must be exceeded. Utilize all authorized revenues sources and at the maximum amount allowed by law. Ignore "other financing sources" since these resource inflows are not available for appropriation.

Question 8. 8. The AICPA Audit and Accounting Guide Health Care Organizations requires that the following statements be prepared for health care organizations: (Points : 4)

Balance sheet, statement of activities, statement of changes in equity, statement of cash flows Balance sheet, statement of revenues and expenses, statement of changes in equity, statement of cash flows Balance sheet, statement of operations, statement of changes in equity, statement of cash flows Balance sheet, statement of operations, statement of changes in equity, statement of cash flows, statement of functional expenses

Question 9. 9. The comprehensive annual financial report (CAFR) of a government should contain a statement of revenues, expenses, and changes in net assets for (Points : 4)

Both proprietary and governmental funds. Proprietary but not governmental funds. Governmental but not proprietary funds. Neither governmental nor proprietary funds.

Question 10. 10. A hospital has not transferred risk on malpractice claims to a third-party insurer. Which of the following statements best expresses the general rule regarding the reporting of liabilities for malpractice claims on the face of the balance sheet (or statement of net position)? (Points : 4)

They should be reported only to the extent that judgments and settlements are due and payable. Outstanding claims should be described in the notes to the statements; adjudicated and settled claims should be reported if they have not been paid. They should be reported if it is highly likely that the disputes ultimately will be resolved in favor of the claimants. They should be reported if it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated.

Question 11. 11. The term that is closely related to the concept of liquidity is (Points : 4)

Financial condition. Financial position. Interperiod equity. None of these terms.

Question 12. 12. The term that is defined as determining whether current-year revenues are sufficient to pay for the services provided that year and whether future taxpayers will be required to assume burdens for services previously provided is (Points : 4)

Financial position Financial condition Interperiod equity None of these terms

Question 13. 13. As a result of its annual food-raising program, an NFPO receives pledges in the amount of $300,000 during December 2012, the last month of its reporting period. Based on its previous history regarding pledges, the NFPO believes that about $250,000 will be collected in the first 60 days of 2013; $35,000 will trickle in during the rest of 2013; and $15,000 will not be collected at all. How much should the NFPO report as net contributions receivable on its 2012 financial statements?

(Points : 4)

$0 $250,000 $285,000 $300,000

Question 14. 14. Which of the following types of governments is always considered to be a primary government for financial reporting purposes? (Points : 4)

A school district with a separately elected governing body A state university whose board members are appointed by the governor with the approval of the state legislature A town A legally separate public authority or public benefit corporation

Question 15. 15. Cash disbursements budgets: (Points : 4)

Need to be prepared because GASB standards specify the use of the accrual basis of accounting for governments. Should usually be prepared for each month of the year, or for shorter intervals, in order to facilitate planning short-term borrowings and investments. Should be prepared only for funds not required to operate under legal appropriation budgets. Should be prepared only for each fiscal year because disbursements for each month are approximately equal.

Question 16. 16. The Clinton school district is a legally separate organization, but two of its seven board members are also city council members and the district is financially dependent upon the city. The school district should be reported as a: (Points : 4)

Blended component unit. Component unit by note disclosure. Discretely presented component unit. Primary government.

Question 17. 17. The required report or statements in the general purpose federal financial report that addresses forward-looking information regarding the possible effects of currently known demands, risks, and uncertainties, and trends in the federal entity is (are): (Points : 4)

Basic statements. Required supplemental information. Management discussion and analysis. Related notes to the financial statements.

Question 18. 18. Cactus College, a small private college, received a research grant from NACUBO to study whether service efforts and accomplishments measures improve institutional performance. Under the provisions of SFAS No. 116 the grant would be reported as an increase in: (Points : 4)

Unrestricted net assets. The fund balance of restricted current funds. Permanently restricted net assets. Temporarily restricted net assets.

Question 19. 19. The Comptroller General of the United States is the head of the: (Points : 4)

Government Accountability Office Office of the Management and Budget Congressional Budget Office Federal Accounting Standards Advisory Board

Question 20. 20. During the years ended June 30, 2008 and 2009, Jasper University, a public university, conducted a cancer research project financed by a $1,000,000 gift from an alumnus. The entire amount was pledged by the donor on July 10, 2007, although she paid only $200,000 at that date. The gift was restricted to the financing of this particular research project. During the two-year research period, Jasper's related gift receipts and research expenditures were as follows:

Year Ended June 30

	2008	2009
Gift Receipts	$200,000	$800,000
Cancer research expenditures	$100,000	$900,000

How much gift revenue should Jasper University report for the year ended June 30, 2009? (Points : 4)

$1,000,000 $900,000 $800,000 $0

Question 21. 21. The "net position" of a federal agency may include all of the following components, except: (Points : 4)

Unexpended appropriations. Cumulative results of operations. Appropriations represented by undelivered orders and unobligated balances. Fund balance with U.S. Treasury.

Question 22. 22. The term that is closely related to the concept of liquidity is: (Points : 4)

Financial condition. Interperiod equity. Financial position. Economic condition.

Question 23. 23. The statement of activities required by SFAS No. 117 for health care entities subject to its jurisdiction must display changes for the period in which of the following categories of net assets? (Points : 4)

Unrestricted Temporarily restricted Permanently restricted All of the above

Question 24. 24. A not-for-profit organization, in order to conform to generally accepted accounting principles (GAAP), displays the changes in all classes of net assets on the (Points : 4)

Statement of financial position Statement of cash flows Statement of activities Statement of functional expenses

Question 25. 25. Which of the following trends is most likely to be a signal of impending fiscal stress? (Points : 4)

An increasing ratio of own source revenues to total revenues A decreasing ratio of total revenues to total expenditures A decreasing ratio of debt service expenditures to operating revenues A decreasing ratio of operating expenditures to total revenues