70 test bank essentials of accounting for governmental and not for profit organizations 11th edition

70 Test Bank Essentials of Accounting for Governmental
and Not for Profit Organizations 11th Edition
by Copley Multiple Choice Questions Part 1 - Page 1
Which of the following fund types is present in every generalpurpose government?
1.

A) Permanent

2.

B) General

3.

C) Special revenue

4.

D) Capital projects

The term “fiduciary funds” applies to:
1.

A)enterprise and internal service funds.

2.

B)pension, investment trust and enterprise funds

3.

C)enterprise, internal service, and private-purpose trust funds.

4.

D)none of the above answers are correct.

Level “A” GAAP for The University of Virginia, a public institution,
would be established by the:
1.

A)Financial Accounting Standards Board.

2.

B)Governmental Accounting Standards Board.

3.

C)American Institute of Certified Public Accountants.

4.

D)National Association of College and University Business Officers.

The FASAB has the authority to establish accounting and financial
reporting standards for:
1.

A)Federal government

2.

B)Investor owned business

3.

C)State and local governments


4.

D)Public not-for-profits

The Governmental Accounting Standards Board has been given
authority to establish accounting and financial reporting standards
for:
1.
2.

3.
4.

A)all governmental units and agencies.
B)federal, state, and local governments and governmentally-owned utilities,
authorities, hospitals, and colleges and universities..
C)all governmental units and all not-for-profit organizations.
D)state and local governmental entities, and governmentally-owned utilities,
authorities, hospitals, and colleges and universities.

The GASB has the authority to establish accounting and financial

reporting standards for:
1.

A)Federal government

2.

B)Private not-for-profits

3.

C)State governments

4.

D)None of the above

Which of the following use current financial resources measurement
focus?
1.

A) Fiduciary fund statements

2.

B)Governmental fund statements

3.

C)Proprietary fund statements

4.

D)Internal Service fund statements

Fiduciary funds are to use the:
1.

A)economic resources measurement focus and modified accrual basis of
accounting.

2.

B)current financial resources measurement focus and accrual basis of
accounting.


3.

C)economic resources measurement focus and accrual basis of accounting.

4.

D)none of the above, the fiduciary funds have no revenues.

The GASB sets accounting standards for all of the following
except:
1.

A)State and local governments

2.

B)Nongovernmental not-for-profit hospital

3.

C)Component units owned or controlled by governments

4.

D)Governmentally related not-for-profit universities

Which of the following is not one of the objectives of Federal
Financial Reporting, as outlined in SFFAC 1, which was issued by
the FASAB?
1.

A)Financial reporting should enable evaluation of the service efforts, costs
and accomplishments of the reporting entity.

2.

B)Financial reporting should enable evaluation of the success rate of
programs

3.

C)Financial reporting should reveal whether financial systems and controls
are adequate

4.

D)Financial reporting should demonstrate accountability regarding raising and
expending money according to budgetary process and laws and regulations

Which of the following characteristics would not define an
organization as governmental?
1.

A)The power to enact and enforce a tax levy.

2.

B)The potential for unilateral dissolution by a government with the net assets
reverting to a government.

3.

C)The receipt of grant money from a state or local government for the
purpose of providing services to the public.

4.

D)All of the above.

Which of the following is a fiduciary fund?


1.

A) Investment trust

2.

B) Permanent

3.

C) Enterprise

4.

D) Internal service

Governmental funds include:
1.

A)Special revenue funds

2.

B)Internal service funds

3.

C)Debt service funds

4.

D)A and C

Which of the following would not be included in FASB Statement of
Financial Accounting Concepts #4, which identifies the information
needs of the users of non-business financial statements?
1.
2.

3.
4.

A) Format and content of financial statements
B)Assessing services provided by a non-business organization and its ability
to continue to provide those services
C)Assessing managements’ stewardship and performance
D)Evaluation of an organization’s resources, obligations and effects of
changes in net resources

Under the modified accrual basis of accounting, revenues should be
recognized when they are:
1.

A)authorized by the budget ordinance.

2.

B)realizable and earned.

3.

C)measurable and available to finance expenditures of the current period.

4.

D)realized through collection.

Which of the following best describes how many funds a
government should use?


1.

A) One for each revenue source

2.

B)Two at a minimum; the General Fund and one enterprise fund

3.

4.

C)As many as necessary to fulfill legal requirements and sound financial
administration
D)None of the above

In order for a fund to exist, there must be:
1.

A)A fiscal entity; assets set aside for a specific purpose

2.

B)A double-entry accounting entity

3.

C)Both A & B are required

4.

D)A & B are optional and not required

The term “proprietary funds” applies to:
1.

A)enterprise and internal service funds only.

2.

B)all funds that use accrual accounting.

3.

C)enterprise, internal service, and private-purpose trust funds.

4.

D)none of the above answers are correct.

The FASB has the authority to establish accounting and financial
reporting standards for:
1.

A)Federal government

2.

B)Private not-for-profits

3.

C)Public not-for-profits

4.

D)State and local governments

Proprietary funds use the:
1.

A)economic resources measurement focus and accrual basis of accounting.

2.

B)current financial resources measurement focus and modified accrual basis
of accounting


3.

C)economic resources measurement focus and modified accrual basis of
accounting.

4.

D)current financial resources measurement focus and accrual basis of
accounting.

Which of the following is a governmental fund?
1.

A) Agency

2.

B) Enterprise

3.

C)Special revenue

4.

D)Internal service

The “Hierarchy of GAAP” is established by the:
1.

A)Financial Accounting Standards Board.

2.

B)Federal Accounting Standards Advisory Board

3.

C)Governmental Accounting Standards Board

4.

D)All of the above have established a hierarchy

Which of the following is not a fiduciary fund?
1.

A) Agency

2.

B) Permanent

3.

C) Pension trust

4.

D) Private-purpose trust

Governmental funds use the:
1.

A)economic resources measurement focus and accrual basis of accounting.

2.

B)current financial resources measurement focus and accrual basis of
accounting.

3.

C)economic resources measurement focus and modified accrual basis of
accounting.


4.

D) current financial resources measurement focus and modified accrual basis
of accounting

Which fund category must change from modified accrual to accrual
basis when preparing government-wide financial statements?
1.

A)Governmental

2.

B)Proprietary

3.

C)Fiduciary

4.

D)A & B only

70 Free Test Bank Essentials of Accounting for
Governmental and Not for Profit Organizations 11th
Edition by Copley Multiple Choice Questions Part 1 Page 2
Level "A" GAAP for Cook County Hospital, a public hospital, would
be established by the:
1.

A)Governmental Accounting Standards Board.

2.

B)Financial Accounting Standards Board.

3.

C)Hospital Financial Management Association.

4.

D)American Institute of Certified Public Accountants.

Under GASB Statement 34, capital assets:
1.

A)must be reported in government-wide statements but are not reported in
any of the fund financial statements.

2.

B)must be reported in government-wide statements and in proprietary fund
financial statements.

3.

C)are not to be reported in either government-wide or fund financial
statements.

4.

D)are to be reported but not depreciated in government-wide and fund
financial statements.


Under GASB Statement 34, modified accrual accounting would be
found in the:
1.

A)government-wide financial statements only.

2.

B)governmental fund financial statements only.

3.

C)governmental and fiduciary fund financial statements only.

4.

D)governmental, proprietary, and fiduciary fund financial statements but not in
the government-wide financial statements

GASB Concepts Statement No. 3, Communication Methods in
General Purpose External Financial Reports that Contain Basic
Financial Statements, states that
1.

A)notes to the financial statements may include management’s objective
explanations.

2.

B)required supplementary information must be objective and may not include
predictions or subjective assessments.

3.

C)disclosure in the notes is not an adequate substitute for recognition in the
financial statements.

4.

D)All of the above are correct.

A city government makes its semiannual payment of interest on
revenue bonds issued to pay for the construction of additional
public transit stations. Which fund would account for the payment?
1.

A)Debt service fund

2.

B)Capital projects fund

3.

C)Enterprise fund

4.

D)Internal service fund

A city government collects local option sales taxes legally restricted
to pay for the hiring of teachers for hearing impaired school
children. Which fund should account for the receipt of the sales
taxes?


1.

A)Special revenue fund

2.

B)Capital projects fund

3.

C)Private-purpose trust fund

4.

D)General fund

A city government sells police cars no longer in use. No restrictions
have been placed on the proceeds. Which fund should account for
the receipt?
1.

A)Debt service fund

2.

B)Capital projects fund

3.

C)Enterprise fund

4.

D)General fund

Government-wide statements use the:
1.

2.
3.

4.

A)current financial resources measurement focus and accrual basis of
accounting.
B) economic resources measurement focus and accrual basis of accounting.
C)economic resources measurement focus and modified accrual basis of
accounting.
D)none of the above.

Governmental funds do not include:
1.

A)Special revenue funds

2.

B)Agency funds

3.

C)Debt service funds

4.

D)The General fund

Under GASB Statement 34, accrual accounting is used for:
1.

A)government-wide financial statements only.


2.

B)government-wide financial statements and proprietary fund financial
statements only.

3.

C)government-wide, proprietary fund, and fiduciary fund financial statements
only.

4.

D)government-wide and all fund financial statements

Which of the following are the governmental funds?
1.

A)General, special revenue, debt service, capital projects, permanent.

2.

B)General, special revenue, debt service, capital projects, private purpose.

3.

C)General, special revenue, debt service, capital projects, internal service.

4.

D)None of the above.

Which of the following is not true regarding GASB Concepts
Statement No. 2, Service Efforts and Accomplishments Reporting:
1.

2.
3.

4.

A)It encourages governments to experiment with reporting more complete
information about an entity's performance than can be displayed in the
traditional financial statements.
B)It outlines categories of information that might be reported.
C)It prescribes detailed standards governing the reporting of service efforts
and accomplishments reporting.
D)None of the above, all are true.

Which of the following is not a fiduciary fund type?

1.

A)Agency.

2.

B)Expendable trust.

3.

C)Private-purpose trust.

4.

D)Investment trust.

Which of the following organizations has authority to establish
accounting and financial reporting standards for the federal
government?


1.

A)Federal Accounting Standards Advisory Board.

2.

B)Office of Management and Budget.

3.

C)Governmental Accounting Standards Board.

4.

D)None of the above; no one has been granted authority to set standards for
the federal government

Which of the following is most correct with regard to Management's
Discussion and Analysis (MD&A)?
1.

A)State and local governments are required to provide an MD&A.

2.

B)Federal agency financial reports are required to provide an MD&A.

3.

C)Both state and local governments and federal agencies are encouraged,
but not required to provide an MD&A.

4.

D)Both state and local governments and federal agencies are required to
provide an MD&A.

Long-term debt paid from proprietary funds is reported as a liability
in

1.

A)the proprietary fund Statement of Net Assets.

2.

B)the government-wide Statement of Net Assets.

3.

C)both A and B.

4.

D)neither A nor B.

Which of the following is true regarding fund classifications?
1.

A)Governmental funds include the General, special revenue, debt service,
capital projects, and permanent.

2.

B)Proprietary funds include enterprise, internal service, and private-purpose.

3.

C)Both of the above.

4.

D)None of the above.


A city government collects local option sales taxes legally restricted
to pay for the construction of a new courthouse. Which fund should
account for the receipt of the sales taxes?
1.

A)Special revenue fund

2.

B)Capital projects fund

3.

C)Private-purpose trust fund

4.

D)General fund

Notre Dame University, a private institution, has level “A” GAAP
established by the:
1.

A)American Institute of Certified Public Accountants.

2.

B)Governmental Accounting Standards Board.

3.

C)Financial Accounting Standards Board.

4.

D)National Association of College and University Business Officers

Long-term debt of a governmental unit would be reported in the:
1.

2.
3.

4.

A)government-wide financial statements and proprietary fund financial
statements.
B)government-wide financial statements only.
C)debt service funds of governmental fund financial statements and
government-wide financial statements.
D)notes to the financial statements only.