CGA Public Sector & Not-for-Profit Accounting 3

Question 1

A hospital (an NPO) receives a pledge of $100,000 with payment expected in 18 months. Under Canadian GAAP for NPOs using the deferral method, how is this pledge treated at year-end?

Accepted Answer

Recognized as revenue and recorded as a receivable if collection is reasonably assured

Answer

Under Canadian GAAP for NPOs, pledges are recognized as revenue when collection is reasonably assured and the amount can be reliably measured, with a corresponding receivable recorded.

Question 2

The 'whole-of-government' approach in public sector consolidated financial statements requires:

Accepted Answer

Consolidation of all government-controlled entities into a single set of financial statements

Answer

Whole-of-government reporting consolidates all entities within the government reporting entity into a single set of financial statements, providing a complete picture of the government's financial position.

Question 3

Which PSAB standard addresses the disclosure requirements for government transfers (grants) to third parties?

Accepted Answer

PS 3410 – Government Transfers

Answer

PS 3410 establishes the standards for recognition, measurement, and disclosure of government transfers, including grants, subsidies, and contributions made by government to third parties.

Question 4

For an NPO using the restricted fund method, unrestricted contributions received are recognized:

Accepted Answer

As revenue in the general fund in the period received

Answer

Under the restricted fund method, unrestricted contributions are recognized as revenue in the general fund in the period received, as there are no restrictions limiting their use.

Question 5

What distinguishes a 'controlled entity' from an 'organization subject to significant influence' in the government reporting entity?

Accepted Answer

Control means the government has the power to govern financial and operating policies; significant influence means the ability to affect but not control those policies

Answer

Control exists when a government has the power to govern the financial and operating policies of another entity to obtain benefits; significant influence is a lesser relationship where the government can affect but not control policies.

(CGA) Certified General Accountant Practice Test

(CGA) Certified General Accountant Practice Test

CGA Public Sector & Not-for-Profit Accounting 3