CPA Governmental & Not-for-Profit Accounting 3

Question 1

Which GASB statement established the requirement for government-wide financial statements in addition to fund financial statements?

Accepted Answer

GASB Statement No. 34

Answer

GASB Statement No. 34 (1999) fundamentally restructured governmental financial reporting by requiring government-wide statements alongside the traditional fund-level statements.

Question 2

A government levies a special assessment on property owners to finance sidewalk improvements. Which fund should account for the construction activity?

Accepted Answer

Capital Projects Fund

Answer

Capital Projects Funds are used to account for financial resources restricted for acquiring or constructing major capital facilities, such as sidewalk improvements financed by special assessments.

Question 3

Under GASB standards, infrastructure assets such as roads and bridges may be reported using the:

Accepted Answer

Either the depreciation method or the modified approach

Answer

GASB permits governments to use either traditional depreciation or the modified approach (maintaining infrastructure at a set condition level and expensing maintenance costs) for eligible infrastructure assets.

Question 4

In not-for-profit accounting, an unconditional promise to give (pledge) from a donor should be recognized as:

Accepted Answer

Revenue when the pledge is made

Answer

Under FASB ASC 958, unconditional promises to give are recognized as contribution revenue (with or without donor restrictions) at the time the promise is made, measured at fair value.

Question 5

Which of the following is a fiduciary fund type used by governments?

Accepted Answer

Pension Trust Fund

Answer

Pension Trust Funds are fiduciary funds that account for assets held in trust for pension plan members; fiduciary funds are not included in government-wide statements.

(CPA) Certified Practicing Accountant Practice Test

(CPA) Certified Practicing Accountant Practice Test

CPA Governmental & Not-for-Profit Accounting 3