CGA Public Sector & Not-for-Profit Accounting 1

Question 1

Which accounting standard-setter governs financial reporting for Canadian federal government entities?

Accepted Answer

PSAB

Answer

The Public Sector Accounting Board (PSAB) establishes accounting standards for Canadian public sector entities, including federal, provincial, and territorial governments.

Question 2

Under public sector accounting, the modified accrual basis primarily differs from full accrual by:

Accepted Answer

Recognizing expenditures when the related liability is expected to be paid within the current period or shortly after

Answer

Modified accrual recognizes revenues when measurable and available, and recognizes expenditures when the liability is incurred and expected to be liquidated with current resources.

Question 3

A not-for-profit organization (NPO) receives a donation restricted for building construction. Under Canadian GAAP for NPOs, which method allows this donation to be deferred until the asset is amortized?

Accepted Answer

Either the deferral method or restricted fund method

Answer

Under Canadian GAAP for NPOs, organizations may use either the deferral method or the restricted fund method to account for restricted contributions; both permit deferral matched to asset amortization.

Question 4

In fund accounting used by governments, a debt service fund is established to:

Accepted Answer

Accumulate resources for repayment of long-term debt principal and interest

Answer

A debt service fund accumulates financial resources set aside for the payment of long-term debt principal and interest obligations.

Question 5

Which financial statement is unique to public sector entities and not typically found in private sector reporting?

Accepted Answer

Statement of Remeasurement Gains and Losses

Answer

PSAB requires a Statement of Remeasurement Gains and Losses to separately report gains and losses arising from remeasuring financial instruments and foreign currency items at year-end.

(CGA) Certified General Accountant Practice Test

(CGA) Certified General Accountant Practice Test

CGA Public Sector & Not-for-Profit Accounting 1