69 test bank for essentials of accounting for governmental and not for profit organizations 12th

D Enterprise Funds Which fund category must change from modified accrual to accrual basis when preparing government-wide financial statements.. A current financial resources measurement

69 Test Bank for Essentials of Accounting for

Governmental and Not for Profit Organizations 12th Edition by Copley

Multiple Choice Questions

The Financial Accounting Standards Board (FASB) is the

standard setting organization for which of the following reporting organizations?

1. A) Private not-for-profits

2. B) Public not-for-profits

3. C) Investor owned businesses

4. D) A and C are both correct

The _ is the government’s official annual report

prepared and published as a matter of public record

1. A) comprehensive annual financial report

2. B) governmental annual financial report

3. C) independent auditor’s report

4. D) complete audited financial report

The Governmental Accounting Standards Board has been given authority to establish accounting and financial reporting standards for:

1. A) all governmental units and agencies

2. B) federal, state, and local governments and governmentally related

utilities, authorities, hospitals, and colleges and universities

3. C) state and local governmental entities, and governmentally related

utilities, authorities, hospitals, and colleges and universities

4. D) all governmental units and all not-for-profit organizations

What are Enterprise funds used for?

1. A) To account for pension and employee benefit funds for which the

governmental unit is the trustee

2. B) To account for most of the basic services provided by the governmental units

3. C) To account for resources provided primarily through the use of sales and service charges to parties external to the government

4. D) To report resources that are legally restricted so only earnings, not principal, may be expended, and for purposes to benefit the government and its citizenry

The GASB is under the oversight of:

3. C) FAF

State and local governmental funds are organized into three

categories including:

1. A) governmental, proprietary, and restricted

2. B) proprietary, fiduciary, and restricted

3. C) governmental, fiduciary, and restricted

4. D) governmental, proprietary, and fiduciary

A government may have General

Fund(s)

1. A) Only one

2. B) As many as needed to fulfill legal obligations

3. C) A varying number, depending on the annual needs of the government

4. D) None of the above

The Funds are used to account for situations in which the government is acting as a collecting/disbursing agent

1. A) Agency

2. B) Enterprise

3. C) General

4. D) Special revenue

Under GASB Statement 34, capital assets:

1. A) must be reported in government-wide statements but are not reported in any of the fund financial statements

2. B) must be reported in government-wide statements and in proprietary fund financial statements

3. C) are not to be reported in either government-wide or fund financial

statements

4. D) are to be reported but not depreciated in government-wide and fund financial statements

The FASB has the authority to establish accounting and financial reporting standards for:

1. A) Federal government

2. B) Private not-for-profits

3. C) Public not-for-profits

4. D) State and local governments

Which of the following is not a fiduciary fund type?

1. A) Agency

2. B) Expendable trust

3. C) Private-purpose trust

4. D) Investment trust

What type of fund is used when resources are provided mainly through business-like transactions to parties external to the government?

1. A) Internal Service Funds

2. B) Capital Projects Funds

4. D) Enterprise Funds

Which fund category must change from modified accrual to accrual basis when preparing government-wide financial

statements?

1. A) Governmental

2. B) Proprietary

3. C) Fiduciary

4. D) A & B only

Governmental funds include:

1. A) Special revenue funds

2. B) Internal service funds

3. C) Debt service funds

4. D) A and C

The Fund accounts for all resources other than those required to be accounted for in other funds

2. B) Enterprise

3. C) General

4. D) Special revenue

Which of the following funds is used to account for the payment of principal and interest of general long term debt of a government?

1. A) Capital Projects Fund

2. B) Internal Service Fund

4. D) None of the above

Which of the following fund types uses modified accrual

accounting?

1. A) Enterprise

2. B) Internal Service

3. C) Investment Trust

4. D) Special Revenue

Notre Dame University, a private institution, has level “A” GAAP established by the:

1. A) American Institute of Certified Public Accountants

2. B) Governmental Accounting Standards Board

3. C) National Association of College and University Business Officers

4. D) Financial Accounting Standards Board

Which of the following is a proprietary fund?

1. A) Investment trust

3. C) Special revenue

4. D) Internal service

What basis of accounting would the Enterprise Fund use?

1. A) Accrual

2. B) Modified Accrual

Which of the following funds is not a Fiduciary Fund?

1. A) Investment Trust Fund

2. B) Private Purpose Trust Fund

3. C) Permanent Fund

Which of the following is not a fiduciary fund?

2. B) Permanent

3. C) Pension trust

4. D) Private-purpose trust

The “Hierarchy of GAAP” is established by the:

1. A) Financial Accounting Standards Board

2. B) Federal Accounting Standards Advisory Board

3. C) Governmental Accounting Standards Board

4. D) All of the above have established a hierarchy

Which of the following statement(s) are not included in the

proprietary funds for a government entity:

1. A) Statement of Revenues, Expenditures, and Changes in Fund Balances

2. B) Statement of Cash Flows

3. C) Statement of Net Position

4. D) All of the above are included

Financial reports for state and local governments are well suited for all the following EXCEPT?

1. A) Assessing financial condition and results of operations

2. B) Comparing actual results with the legally adopted budget

3. C) Measuring the effectiveness of government services such as police and fire protection

4. D) Assisting in determining compliance with finance-related laws and regulations

Long-term debt to be paid from proprietary funds is reported as a liability in

1. A) the proprietary fund Statement of Net assets (or Net Position)

2. B) the government-wide Statement of Net assets (or Net Position)

3. C) both A and B

4. D) neither A nor B

Which of the following best describes how many funds a

government should use?

1. A) One for each revenue source

2. B) Two at a minimum; the General Fund and one enterprise fund

3. C) As many as necessary to fulfill legal requirements and sound financial administration

4. D) None of the above

The _ sets the accounting and financial reporting

standards for both state and local governments and public not-for-profits

3. C) GASB

4. D) AICPA

Government-wide statements use the:

1. A) current financial resources measurement focus and accrual basis of accounting

2. B) economic resources measurement focus and modified accrual basis of accounting

3. C) economic resources measurement focus and accrual basis of

accounting

4. D) none of the above

Which of the following would not be included in FASB Statement

of Financial Accounting Concepts #4, which identifies the

information needs of the users of non-business financial

statements?

1. A) Assessing services provided by a non-business organization and its ability to continue to provide those services

2. B) Format and content of financial statements

3. C) Assessing managements’ stewardship and performance

4. D) Evaluation of an organization’s resources, obligations and effects of changes in net resources

Which of the following is an environmental difference between governments and for-profit business enterprises?

1. A) Relationship with stakeholders

2. B) Donor restricted assets

3. C) Fiduciary responsibilities

4. D) Both B and C

Governmental funds use the:

1. A) economic resources measurement focus and accrual basis of

accounting

2. B) current financial resources measurement focus and accrual basis of accounting

3. C) economic resources measurement focus and modified accrual basis of accounting

4. D) current financial resources measurement focus and modified accrual basis of accounting

Level “A” GAAP for The University of Virginia, a public institution, would be established by the:

1. A) Financial Accounting Standards Board

2. B) Governmental Accounting Standards Board

3. C) American Institute of Certified Public Accountants

4. D) National Association of College and University Business Officers

A city government makes its semiannual payment of interest on revenue bonds issued to pay for the construction of additional public transit stations Which fund would account for the

payment?

1. A) Debt service fund

2. B) Capital projects fund

3. C) Enterprise fund

4. D) Internal service fund

Governmental funds do not include:

1. A) Special revenue funds

2. B) Agency funds

3. C) Debt service funds

4. D) The General fund

Which of the following is most correct with regard to

Management's Discussion and Analysis (MD&A)?

1. A) State and local governments are required to provide an MD&A.

2. B) Federal agency financial reports are required to provide an MD&A

3. C) Both state and local governments and federal agencies are encouraged, but not required to provide an MD&A

4. D) Both state and local governments and federal agencies are required to provide an MD&A

Under GASB Statement 34, modified accrual accounting would

be found in the:

1. A) government-wide financial statements only

2. B) governmental fund financial statements only

3. C) governmental and fiduciary fund financial statements only

4. D) governmental, proprietary, and fiduciary fund financial statements but not in the government-wide financial statements

Long-term debt of a governmental unit would be reported in the:

1. A) government-wide financial statements and proprietary fund financial statements

2. B) government-wide financial statements only

3. C) debt service funds of governmental fund financial statements and

government-wide financial statements

4. D) notes to the financial statements only

Which of the following funds is considered a Fiduciary Fund?

1. A) Debt Service Fund

2. B) Enterprise Fund

3. C) Internal Service Fund

4. D) Pension Trust Fund

Under GASB Statement 34, accrual accounting is used for:

1. A) government-wide financial statements only.

2. B) government-wide financial statements and proprietary fund financial statements only

3. C) government-wide, proprietary fund, and fiduciary fund financial

statements only

4. D) government-wide and all fund financial statements

Under the modified accrual basis of accounting, expenditures should be recognized when:

1. A) they are authorized by the budget ordinance

2. B) they are paid

3. C) they are measurable and can be financed by the revenues of the current period

4. D) the fund liability is incurred

Which of the following organizations has authority to establish accounting and financial reporting standards for the federal

government?

1. A) Federal Accounting Standards Advisory Board

2. B) Office of Management and Budget

3. C) Governmental Accounting Standards Board

4. D) None of the above; no one has been granted authority to set standards for the federal government

A permanent fund classified under governmental funds…

1. A) Accounts for most of the basic services provided by the governmental unit

2. B) Accounts for financial resources intended for major capital projects

3. C) Accounts for services provided by one department of a government to another

4. D) Accounts for resources that are legally restricted so only earnings, not principal, may be expended, and for purposes to benefit the government and its citizenry

Which of the following fund types is present in every general-purpose government?

2. B) Special revenue

3. C) General

4. D) Capital projects

Which of the following fund types does not use modified accrual accounting?

1. A) Debt Service

2. B) Special Revenue

3. C) Investment Trust

The GASB sets accounting standards for all of the following

except:

1. A) State and local governments

2. B) Component units owned or controlled by governments

3. C) Governmentally related not-for-profit universities

4. D) Nongovernmental not-for-profit hospital

In order for a fund to exist, there must be:

1. A) A fiscal entity; assets set aside for a specific purpose

2. B) A double-entry accounting entity

3. C) A & B are optional and not required

4. D) Both A & B are required

The Funds are used when resources are provided

primarily through the use of sales and service charges to parties external to the government and it is the intent of the government

to measure revenues, expenses and changes in net position

2. B) Enterprise

3. C) General

4. D) Special revenue

Which of the following is a governmental fund?

2. B) Enterprise

3. C) Special revenue

4. D) Internal service

A city government collects local option sales taxes legally

restricted to pay for the construction of a new courthouse Which fund should account for the receipt of the sales taxes?

1. A) Special revenue fund

2. B) Capital projects fund

3. C) Private-purpose trust fund

4. D) General fund

Fiduciary funds are to use the:

1. A) economic resources measurement focus and modified accrual basis of accounting

2. B) current financial resources measurement focus and accrual basis of accounting

3. C) economic resources measurement focus and accrual basis of

accounting

4. D) none of the above, the fiduciary funds have no revenues.

Which of the following use current financial resources

measurement focus?

1. A) Fiduciary fund statements

2. B) Governmental fund statements

3. C) Proprietary fund statements

4. D) Internal Service fund statements

The GASB has the authority to establish accounting and financial reporting standards for:

1. A) State governments

2. B) Private not-for-profits

3. C) Federal government

4. D) None of the above

Which of the following is not one of the objectives of Federal

Financial Reporting, as outlined in SFFAC 1, which was issued by the FASAB?

1. A) Financial reporting should enable evaluation of the success rate of programs

2. B) Financial reporting should enable evaluation of the service efforts, costs and accomplishments of the reporting entity

3. C) Financial reporting should reveal whether financial systems and controls are adequate

4. D) Financial reporting should demonstrate accountability with regard to raising and expending money

The fund basis statements for governmental funds are presented using the

1. A) Economic Resources Measurement focus and the Accrual Basis of Accounting

2. B) Current Financial Resources Measurement focus and the Modified Accrual Basis of Accounting

3. C) Current Financial Resources Measurement focus and the Accrual Basis

of Accounting

4. D) Economic Resources Measurement focus and the Modified Accrual Basis of Accounting

Capitalized fixed assets are reported in which of the following fund-basis statements?

1. A) Agency fund

2. B) Proprietary fund

3. C) Governmental fund

4. D) All of the above

A city government sells police cars no longer in use No

restrictions have been placed on the proceeds Which fund

should account for the receipt?

1. A) General fund

2. B) Capital projects fund

3. C) Enterprise fund

4. D) Debt service fund

The Fund accounts for and reports the proceeds of

specific revenue sources that are restricted or committed to

expenditure for specified purpose other than debt service or

capital projects

2. B) Enterprise

3. C) General

4. D) Special revenue