Certified Public Accountant Governmental & Not-for-Profit Accounting 3

Question 1

Under modified accrual accounting, property tax revenues are generally considered 'available' if collected within how many days after fiscal year-end?

Accepted Answer

60 days

Answer

30 days

Answer

90 days

Answer

180 days

Question 2

Under GASB standards, which funds must always be separately reported as major funds?

Accepted Answer

The General Fund and any fund meeting the 10% and 5% quantitative thresholds

Answer

All governmental funds regardless of size

Answer

Only funds with revenues exceeding $1 million

Answer

Any fund that management deems important

Question 3

A not-for-profit hospital receives a pledge of $90,000 to be paid in three equal annual installments. How should this pledge be initially recorded?

Accepted Answer

As contributions receivable at the present value of future cash flows

Answer

As revenue of $90,000 when all installments are received

Answer

As deferred revenue until each installment is received

Answer

As a contingent asset until legally enforceable

Question 4

Under GASB, a government using the modified approach for infrastructure assets (instead of depreciation) must meet which key requirement?

Accepted Answer

The government must maintain assets at or above a documented condition level

Answer

Assets must be valued at replacement cost annually

Answer

Assets must have an estimated useful life exceeding 100 years

Answer

Assets must be less than 50 years old

Question 5

Which of the following statements about Internal Service Funds is correct?

Accepted Answer

They primarily serve other departments within the same government

Answer

They are reported as governmental activities in government-wide statements

Answer

They charge fees to outside parties and the general public

Answer

They must always use modified accrual accounting

Question 6

A city receives a conditional federal grant requiring it to match 50% of federal funds before any federal money is released. How should the grant be treated upon initial award?

Accepted Answer

Record as deferred revenue or a liability until the matching condition is met

Answer

Record as revenue immediately upon award

Answer

Record as a receivable and credit revenue

Answer

Disclose only in the notes until cash is received

Question 7

Under FASB ASC 958, when must a not-for-profit organization recognize contributed services as revenue?

Accepted Answer

When services create or enhance a nonfinancial asset, or require specialized skills that would otherwise be purchased

Answer

When any volunteer services are performed

Answer

Only when services are provided by licensed professionals earning above a threshold

Answer

Only when the fair value of services exceeds $5,000