Practice Test Geeks(AICPA) American Institute of Certified Public Accountants Practice Test
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Governmental & Not-for-Profit Accounting Flashcards

7 cards from real AICPA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Governmental & Not-for-Profit Accounting flashcards as text

  1. Which basis of accounting is used for governmental fund financial statements under GASB standards?

    Answer: Modified accrual basis

    Governmental funds use the modified accrual basis, recognizing revenues when measurable and available, and expenditures when incurred.

  2. Which fund type would a state government use to account for resources legally restricted to pay long-term debt principal and interest?

    Answer: Debt service fund

    A debt service fund accounts for resources accumulated for and the payment of general long-term debt principal and interest.

  3. What does GASB stand for?

    Answer: Governmental Accounting Standards Board

    GASB — the Governmental Accounting Standards Board — establishes accounting and financial reporting standards for U.S. state and local governments.

  4. Which financial statement is unique to governmental fund accounting and reconciles fund balances to government-wide net position?

    Answer: Balance Sheet with reconciliation

    The governmental fund Balance Sheet includes a reconciliation schedule that bridges the fund balance to the government-wide net position reported under full accrual.

  5. Under GASB, the general fund is best described as:

    Answer: The chief operating fund of a government

    The general fund accounts for all financial resources not required to be accounted for in another fund and is the primary operating fund.

  6. GASB Statement No. 34 requires governments to report two distinct perspectives in their basic financial statements. These are:

    Answer: Fund financial statements and government-wide financial statements

    GASB 34 established the dual-perspective model: fund financial statements (showing individual funds) and government-wide statements (showing the entity as a whole on a full accrual basis).

  7. Which of the following is classified as a fiduciary fund under GASB standards?

    Answer: Pension trust fund

    Pension trust funds are fiduciary funds because the government holds assets in trust for the benefit of plan members, not for its own programs.