Multiple choice questions 1-14

Question 1

For the personal financial statement, statement of changes in net worth, which of the following would be a realized increase in net worth?

a Dividend income

b Change in value of land

c Decrease in value of house

d Personal expenditures

e None of the above

Question 2

For the personal financial statement, statement of changes in net worth, which of the following would be an unrealized increase in net worth?

a Personal expenditures

b Decrease in value of furnishings

c Increase in value of land

d Salary

e None of the above

Question 3

Which of the following is not a suggestion for reviewing the statement of financial condition?

a Review realized decreases in net worth.

b Compare specific assets with any related liabilities.

c Observe the due period of the liabilities.

d Review the net worth amount.

e Determine the amount of the assets that you consider to be very liquid.

Question 4

Which of the following would be a source of information for personal financial statements?

a Bank statements

b All of the above

c Insurance policies

d Real estate tax returns

e Checkbooks

Question 5

Which of the following would not be an acceptable presentation on the statement of financial condition?

Group of answer choices

a Payables and other liabilities are presented at the discounted amounts of cash to be paid.

b Investments in real estate should be presented at their estimated current values.

c The liability for income taxes payable should include unpaid income taxes for completed tax years and an estimated amount for income taxes accrued for the elapsed portion of the current tax year to the date of the financial statements.

d All of the above

e A car may be presented at cost.

Question 6

Proprietary funds are a type of funds used by governments. A reasonable definition of proprietary funds would be

a Funds that handle all cash receipts and disbursements not required to be accounted for in another fund.

b None of the above.

c Funds whose principal must remain intact.

d Funds whose purpose is to maintain the assets through cost reimbursement by users or partial cost recovery from users and periodic infusion of additional assets.

e Funds that cash receipts and disbursements related to the payment of interest and principal on long-term debt.

Question 7

Government transactions are recorded in one or more funds designed to emphasize control and budgetary limitations. A fund may be established for which of the following specific purposes?

a Highway maintenance

b Parks

c Endowment fund

d All of the above

e Debt repayment

Question 8

Which of the following is not a minimum requirement for general-purpose external financial statementsstate and local governments?

a Government-wide financial statements

b Management discussion and analysis

c Notes to the financial statements

d Statement of cash flow

e Fund financial statements

Question 9

For state and local governments, the MD&A must include all but which of the following?

a An analysis of the overall financial position and results of operations

b An analysis of significant variations between the original and final budget and the final budget and actual results for the general fund

c Known facts, decisions, or conditions expected to have an impact on financial position or results of operations

d An analysis of balances and transactions of individual funds

e An objective discussion of the basic financial statements and condensed financial information comparing current and prior years

Question 10

Which of the following statements is not true?

a Government transactions are recorded in one or more funds designed to emphasize central and budgetary limitations.

b Government-wide financial statements are prepared on an accrual basis.

c Under GASB Statement No. 34, government-wide statements are superior to fund statements.

d Under GASB Statement No. 34, the government entity will continue to present fund statements.

e The government-wide financial statements are to be prepared on an accrual basis for all of the government's activities.

Question 11

Which of the following is not true?

a Not-for-profit organizations are to present two aggregated financial statements.

b Prior to SFAS No. 117, ''Financial Statements of Not-for-Profit Organizations,'' there were significant differences in the financial reports of not-for-profit organizations.

c SFAS No. 93 requires not-for-profit organizations to recognize depreciation on long-lived tangible assets.

d Under SFAS No. 116, ''Accounting for Contributions Received and Contributions Made,'' contributions are to be segregated into permanent restrictions, temporary restrictions, and unrestricted support imposed by donors.

e According to SFAS No. 124, ''Accounting for Certain Investments Held by Not-for-Profit Organizations,'' equity securities should be shown at their fair values in the statement of financial position.

Question 12

Which of the following is an example of a profit institution?

a State government

b None of the above

c Church

d University

e Bank (I think this is the right answer)

Question 13

Which of the following is not true?

a For a not-for-profit organization, the statement of activities should show realized or unrealized gains and losses.

b Not-for-profit organizations account for a substantial portion of economic activity in the United States.

c Prior to SOP 94-2, not-for-profit accounting principles were derived solely from AICPA audit guides.

d SOP 94-2 concludes that not-for-profit organizations should follow the guidance in effective provisions of GAAP, unless the specific pronouncement explicitly exempts not-for-profit organizations or their subject matter precludes such applicability.

e Under SFAS No. 116, ''Accounting for Contributions Received and Contributions Made,'' contributions received are to be recognized as revenues or gains in the period received.

Question 14

Which of the following is not true?

a Budgeting by objectives and/or measures of productivity could be added to the financial reporting of any not-for-profit institution.

b The accounting for a not-for-profit institution does not include an entity concept or efficiency.

c The accounting for a not-for-profit institution has a bottom-line net income.

d Accounting for not-for-profit institutions differs greatly from accounting for a profit-oriented enterprise.

e Some not-for-profit institutions have added budgeting by objectives and/or productivity to their financial reporting to incorporate measures of efficiency.