Non Profit Accounting: Test 1 Multiple Choice Questions
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Course
Non Profit Accounting:
Institution
Non Profit Accounting:
Which of the following is a special purpose government?
a) The State of Arkansas
b) Greene County
c) Minneapolis Public Schools
d) City of Seattle - answer-c) Minneapolis Public Schools
Which of the following statements is true for both governmental organizations and for-profit organizations...
Gov/Non Profit Accounting: Test 1 Multiple Choice
Questions
Which of the following is a special purpose government?
a) The State of Arkansas
b) Greene County
c) Minneapolis Public Schools
d) City of Seattle - answer-c) Minneapolis Public Schools
Which of the following statements is true for both governmental organizations and for-profit
organizations?
a) Lack of a profit motive
b) Revenue may be earned through exchange transactions
c) Absence of owners
d) Resources are provided by individuals and entities that may not directly benefit from the use of the
resources - answer-b) Revenue may be earned through exchange transactions
Which of the following statements regarding primary sources of accounting and financial reporting
standards is false?
a) The GASB sets standards for all state and local governments.
b) The FASB set standards for all business and not-for-profit entities
c) The FASB and GASB are administered by the Financial Accounting Foundation.
d) The FASAB sets standards for the federal government and its agencies and departments. - answer-b)
The FASB set standards for all business and not-for-profit entities
James Black is reviewing his city's financial reporting because he wants to run for the city council. He is
concerned that the city is not using its resources effectively. James is primarily interested in:
a) Fiscal accountability
b) Social accountability
c) Political accountability
d) Operational accountability - answer-d) Operational accountability
The concept of interperiod equity refers to whether
a) Revenues equaled or exceeded expenses for the year.
b) Total assets (current and noncurrent) were sufficient to cover total liabilities (current and
noncurrent).
c) Current year revenues were sufficient to pay for current year services
d) Future taxpayers can expect to receive the same or higher level of services as current taxpayers. -
answer-c) Current year revenues were sufficient to pay for current year services
What are the components that are included in the minimum requirements for general purpose external
financial reporting?
a) Introductory section, financial section, and statistical section.
b) MD&A, government-wide financial statements, fund financial statements, notes to the financial
statements, and RSI
,c) Letter from the chief financial officer, government financial statements, notes to the financial
statements, and RSI.
d) MD&A, government-wide financial statements, notes to the financial statements, and RSI. - answer-b)
MD&A, government-wide financial statements, fund financial statements, notes to the financial
statements, and RSI
Which of the following is not a required section of a federal agency or department's performance and
accountability report (PAR)?
a) A performance section, which includes an annual performance report (APR).
b) An MD&A
c) A basic financial statements section.
d) A statement of nonparticipation in political matters - answer-d) A statement of nonparticipation in
political matters
The basic financial statements of a not-for-profit include all of the following except
a) Statement of financial position
b) Statement of Activities
c) Statement of changes in functional expenses
d) Statement of cash flows - answer-c) Statement of changes in functional expenses
The primary reason that not-for-profit (NFP) organizations should report expenses incurred for program
purposes separately from those for supporting services such as management and general and fund-
raising is that
a) GASB standards require it.
b) Program managers need information about the cost of activities for which they are responsible.
c) Top managers need to know how much they are spending for nonprogrammatic management and
general support.
d) Donors, potential donors, oversight bodies, and other need to know what percentage of total
expenses are being incurred for carrying out the NFP's programs - answer-d) Donors, potential donors,
oversight bodies, and other need to know what percentage of total expenses are being incurred for
carrying out the NFP's programs
Special purpose governments generally provide a wider range of services to their residents than do
general purpose governments.
- True
- False - answer-- False
The Financial Accounting Standards Board (FASB) is the body authorized to establish accounting
principles for all colleges and universities and health care entities.
- True
- False - answer-- False
The Governmental Accounting Standards Board (GASB) is the body authorized to establish accounting
principles for all state and local governments, both general purpose and special purpose.
- True
- False - answer-- True
, A characteristic common to governments and not-for-profit organizations is that they do not exist to
provide goods or services at a profit or profit equivalent.
- True
- False - answer-- True
The FASB, GASB, and FASAB all focus their standards on both internal and external financial reporting.
- True
- False - answer-- False
Interperiod equity refers to the concept that current-year revenues are sufficient to pay for services
provided that year, so that future taxpayers will not be required to assume the burden for services
previously provided.
- True
- False - answer-- True
The GASB provides optional guidance for those entities providing service efforts and accomplishments
(SEA) reports to the public.
- True
- False - answer-- True
The Governmental Accounting Standards Board is assigned responsibility for setting accounting and
financial reporting standards for
a) Governments such as federal agencies, states, cities, counties, villages, and townships.
b) State and local government entities and governmentally-related units and agencies, such as utilities,
authorities, hospitals, and colleges and universities
c) Not-for-profit organizations
State and local governments and all not-for-profit organizations - answer-b) State and local government
entities and governmentally-related units and agencies, such as utilities, authorities, hospitals, and
colleges and universities
The Financial Accounting Standards Board has the responsibility for setting accounting and financial
reporting standards for
a) All not-for-profit organizations that are nongovernmental and business entities.
b) All not-for-profit organizations and business entities
c) All not-for-profit organizations.
d) Special purpose governments with a business purpose. - answer-a) All not-for-profit organizations
that are nongovernmental and business entities.
Which of the following is identified by the GASB as the "cornerstone" of all financial reporting in
government?
a) Decision usefulness
b) Stewardship
c) Accountability
d) Interperiod equity - answer-c) Accountability
Which of the following is not an objective of financial reporting by state and local governments?
a) To assist users in assessing the adequacy of systems and controls.
b) To assist users in assessing financial condition and results of operations.
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