Accounting Online Program Governmental and Nonprofit Accounting 3

Question 1

The Management's Discussion and Analysis (MD&A) section in a government ACFR is classified as:

Accepted Answer

Required supplementary information

Answer

The MD&A is classified as Required Supplementary Information (RSI) and must precede the basic financial statements, providing management's narrative analysis.

Question 2

Which GASB statement requires government employers to recognize a net pension liability on the face of their government-wide financial statements?

Accepted Answer

GASB 68

Answer

GASB Statement 68 requires government employers to recognize a net pension liability, calculated as the total pension liability minus the plan's fiduciary net position.

Question 3

The Statement of Financial Position for a nonprofit organization presents:

Accepted Answer

Total assets, liabilities, and net assets classified by donor restrictions

Answer

The Statement of Financial Position (the nonprofit balance sheet) presents total assets, total liabilities, and net assets separated into with and without donor restriction categories.

Question 4

Which measurement focus do proprietary funds use under GASB standards?

Accepted Answer

Economic resources

Answer

Proprietary funds use the economic resources measurement focus and full accrual basis of accounting, the same approach used by private-sector commercial enterprises.

Question 5

When does a nonprofit organization recognize revenue from a conditional contribution?

Accepted Answer

When the conditions specified by the donor are substantially met

Answer

Conditional contributions are recognized as revenue only after the recipient nonprofit has substantially met the donor's conditions, removing the barrier to entitlement.

Accounting Online Program Practice Test

Accounting Online Program Practice Test

Accounting Online Program Governmental and Nonprofit Accounting 3