GAC Regulatory Compliance & Standards 3

Question 1

Under the Uniform Guidance, which of the following costs is generally unallowable as a direct charge to a federal award?

Accepted Answer

Alcoholic beverages purchased for a program event

Answer

2 CFR Part 200 explicitly lists alcoholic beverages as an unallowable cost regardless of the funding source or nature of the event.

Question 2

What does the term 'material weakness' mean in the context of governmental auditing under Government Auditing Standards?

Accepted Answer

A deficiency where there is a reasonable possibility that a material misstatement will not be prevented or detected

Answer

A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement will not be prevented or detected on a timely basis.

Question 3

Which GASB concept statement addresses the objectives of financial reporting for state and local governments?

Accepted Answer

Concepts Statement 1

Answer

GASB Concepts Statement 1, 'Objectives of Financial Reporting,' establishes the fundamental goals of governmental financial reporting.

Question 4

A 'major program' determination under the Single Audit requires auditors to use the:

Accepted Answer

Risk-based approach outlined in 2 CFR 200.518

Answer

2 CFR 200.518 establishes the risk-based approach for determining which federal programs are major and must be audited.

Question 5

Under GASB 87, how should a government lessee classify a lease on its statement of net position?

Accepted Answer

As a right-to-use lease asset and a corresponding lease liability

Answer

GASB 87 requires lessees to recognize a right-to-use intangible asset and a corresponding lease liability for all leases with terms greater than 12 months.

(GAC) Governmental Accounting Certification Practice Test

(GAC) Governmental Accounting Certification Practice Test

GAC Regulatory Compliance & Standards 3