Certified Public Accountant Governmental & Not-for-Profit Accounting 2

Question 1

Under GASB standards, which basis of accounting do proprietary funds (enterprise and internal service funds) use?

Accepted Answer

Full accrual basis

Answer

Modified accrual basis

Answer

Cash basis

Answer

Tax basis

Question 2

A county receives bond proceeds to construct a new courthouse. These resources should be accounted for in which fund?

Accepted Answer

Capital Projects Fund

Answer

General Fund

Answer

Special Revenue Fund

Answer

Debt Service Fund

Question 3

Which of the following government activities would be classified as a business-type activity in government-wide statements?

Accepted Answer

Municipal water utility

Answer

Fire department operations

Answer

Public library

Answer

Public school district

Question 4

What is the term for the residual interest in a government's assets after deducting liabilities and adjusting for deferred items, used in government-wide statements?

Accepted Answer

Net position

Answer

Fund balance

Answer

Retained earnings

Answer

Stockholders' equity

Question 5

Under FASB ASC 958, a donation requiring the principal to be maintained in perpetuity with only investment income available for spending creates:

Accepted Answer

Net assets with donor restrictions

Answer

Net assets without donor restrictions

Answer

A conditional contribution liability

Answer

Board-designated net assets

Question 6

Which characteristic most clearly distinguishes a contribution from an exchange transaction in not-for-profit accounting?

Accepted Answer

The resource provider receives no direct commensurate value in return

Answer

The contribution must be in cash

Answer

The contribution must be unconditional

Answer

The contributor must be an individual, not a corporation

Question 7

Under GASB Statement No. 34, the Management's Discussion and Analysis (MD&A) section of a government's financial report is classified as:

Accepted Answer

Required supplementary information (RSI)

Answer

Basic financial statements

Answer

Optional supplementary information

Answer

Notes to financial statements