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79 Cards in this Set
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14. Audits of state and local governments may be performed by all of the following except
A. Independent CPAs. B. State audit agencies. C. Federal grantor agencies. D. Client management. |
D. Client management.
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15. An audit of a government's financial statements, conducted in accordance with generally accepted government auditing standards (GAGAS), includes
A. A determination of efficiency and effectiveness. B. An examination of the financial statements and underlying records for conformance with generally accepted accounting principles (GAAP). C. Tests for compliance with laws and regulations. D. An examination of the financial statements and underlying records for conformance with GAAP and tests for compliance with laws and regulations. |
D. An examination of the financial statements and underlying records for conformance with GAAP and tests for compliance with laws and regulations.
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16. In the auditor's report the financial statements on which the opinion is being expressed are specified in the
A. Introductory paragraph. B. Opinion paragraph. C. Scope paragraph. D. Explanatory paragraph. |
A. Introductory paragraph
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17. In audits of state and local government units which of the following paragraphs may not be required in the auditor's report for every audit?
A. Introductory paragraph. B. Scope paragraph. C. Explanatory paragraph. D. Opinion paragraph. |
C. Explanatory paragraph.
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Government Auditing Standards (GAS) issued by the U.S. Comptroller General, also referred to as generally accepted government auditing standards (GAGAS) apply to all of the following audits, except
A. Financial statement audits of federal organizations made by the Government Accountability Office. B. Financial audits of not-for-profit organizations that do not receive or expend federal financial awards. C. Financial audits of federal grants made by independent CPAs. D. Financial statement audits of federal programs made by state auditors. |
B. Financial audits of not-for-profit organizations that do not receive or expend federal financial awards.
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The scope paragraph of an independent auditor's report on a financial audit of a local government
A. Identifies the statutes the auditor determined to be relevant to the financial activities of the government. B. Identifies the financial statements that the auditor has examined. C. Identifies all applicable accounting records that were located and examined. D. Identifies the standards used in performing the audit. |
D. Identifies the standards used in performing the audit.
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The single audit requirement applies to
A. All audits of state and local government reporting entities. B. Audits to determine efficiency and economy. C. Audits following the Single Audit Act of 1984 (with 1996 Amendments) and the revised OMB Circular A-133. D. Financial and performance audits, and attestation engagements. |
C. Audits following the Single Audit Act of 1984 (with 1996 Amendments) and the revised OMB Circular A-133.
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One of the primary purposes of the Single Audit Act of 1984 (amended in 1996) is to
A. Detect fraud, waste and abuse in government entities. B. To promote the efficient and effective use of audit resources by consolidating audit activity into one organization-wide audit. C. Make audit activity legal at the federal level. D. Allow federal auditors greater access to government entities receiving federal funds. |
B. To promote the efficient and effective use of audit resources by consolidating audit activity into one organization-wide audit.
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Which of the following statements concerning the Single Audit Act of 1984 (with 1996 Amendments) is correct?
A. Only those entities receiving over $500,000 a year in federal financial assistance are required to have a single audit. B. Those entities expending under $500,000 a year in federal awards are exempt from single audit requirements. C. The Single Audit Act only applies if an entity has high risk programs. D. The single audit is optional for all entities receiving federal awards. |
B. Those entities expending under $500,000 a year in federal awards are exempt from single audit requirements.
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A significant deficiency of such magnitude that internal control components do not reduce the risk of detection or prevention of material misstatement to an acceptably low level is called a(an)
A. Material weakness and significant deficiency. B. System design deficiency. C. Unacceptable reportable condition. D. Audit alert item. |
A. Material weakness and significant deficiency.
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Which of the following is not a requirement imposed on auditors by the AICPA risk assessment standards to enhance auditors' application of the audit risk model?
A. Obtain a more in-depth understanding of the entity and its environment, including its internal control. B. Where possible, utilize the same audit program used for the prior year's audit of a given client. C. Conduct a more rigorous assessment of risk of material misstatement. D. Improve the link between the assessment of risk and the nature, timing, and extent of any further procedures performed. |
B. Where possible, utilize the same audit program used for the prior year's audit of a given client.
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Typical objectives of a performance audit include
A. Determining whether financial statements fairly present the entity's operational results. B. Judging the appropriateness of an entity's program goals. C. Determining whether financial statements fairly present in conformity with GAAP. D. Assessing effectiveness and results, economy and efficiency, and internal controls and compliance with laws and regulations. |
D. Assessing effectiveness and results, economy and efficiency, and internal controls and compliance with laws and regulations.
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Generally accepted government auditing standards (GAGAS)
A. Establish the same scope as GAAS, but use wording appropriate to governmental entities instead of business organizations. B. Are set forth in the "Federal Government Red Book." C. Establish more standards that are broader in scope than those found in GAAS. D. Establish standard wording of auditor's reports on governmental financial statements. |
C. Establish more standards that are broader in scope than those found in GAAS
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In which paragraph of the standard audit report does the auditor communicate to the user that certain combining fund information in the financial statements is not part of the basic financial statements, but that such information has been subjected to auditing procedures and, in his or her opinion, is fairly presented in all material respects in relation to the basic financial statements?
A. Explanatory paragraph. B. Scope paragraph. C. Opening paragraph. D. Opinion paragraph. |
A. Explanatory paragraph.
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An unqualified audit opinion rendered on a governmental unit's general purpose external financial statements means those statements
A. Contain departures from GAAP that may make them misleading. B. Have been audited by an auditor with limited qualifications. C. Present fairly in conformity with GAAP. D. Have been certified as free from error. |
C. Present fairly in conformity with GAAP.
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An auditor would not render an opinion on a(an)
A. Financial audit of financial statements. B. Performance audit. C. Audit to determine whether the entity has adhered to specific compliance requirements applicable to a major program. D. Audit to determine whether a governmental department's financial information complies with specific state regulatory requirements. |
B. Performance audit.
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A single audit conducted pursuant to the Single Audit Act Amendments of 1996 requires which of the following types of audits?
A. Financial Audit: Yes; Performance Audit: No B. Financial Audit: No; Performance Audit: No C. Financial Audit: No; Performance Audit: Yes D. Financial Audit: Yes; Performance Audit: Yes |
A. Financial Audit: Yes; Performance Audit: No
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All of the following reports are included in the reporting package resulting from the single audit except
A. Financial statements and schedule of expenditures of federal awards. B. Summary schedule of prior audit findings. C. Report on efficiency and effectiveness. D. Corrective action plan. |
C. Report on efficiency and effectiveness.
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Which of the following is not a required audit report for a single audit?
A. A report on the entity's compliance with laws and regulations. B. A report on internal controls related to the financial statements and major programs. C. A report on the entity's financial statements and conformity with GAAP. D. A report from the cognizant agency on auditee compliance. |
D. A report from the cognizant agency on auditee compliance
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Which of the following best describes the relationship between generally accepted auditing standards (GAAS) and generally accepted government auditing standards (GAGAS)?
A. GAAS apply to independent CPA auditors; GAGAS apply to governmental auditors. B. Audits conducted in conformity with GAGAS may also require the auditor to conform to GAAS. C. Audits done in accordance with GAGAS must also be done in accordance with GAAS. D. Audits of state and local governments always required that the audit be conducted in accordance with both GAAS and GAGAS. |
B. Audits conducted in conformity with GAGAS may also require the auditor to conform to GAAS
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Attestation engagements include
A. Assessment of the extent to which entity programs met their objectives. B. Reviews of interim financial information. C. Services that provide various levels of assurance on such matters as internal control, compliance, MD&A presentation, and reliability of performance measures. D. Examining whether the entity's financial statements fairly present in conformity with GAAP. |
C. Services that provide various levels of assurance on such matters as internal control, compliance, MD&A presentation, and reliability of performance measures.
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A common reason why a government might receive a "qualified opinion" from the external auditors is
A. A violation of generally accepted accounting principles that does not cause material misstatement of the financial statements. B. A fund balance deficit in the General Fund. C. Poor internal controls such that the accounting records could not be audited. D. Liabilities exceed assets in the General Fund. |
A. A violation of generally accepted accounting principles that does not cause material misstatement of the financial statements.
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Which of the following would be considered Category (b) GAAP for state and local government auditees?
A. AICPA Practice Bulletins if specifically made applicable to state and local governments by the AICPA and cleared by the GASB. B. GASB Technical Bulletins. C. GASB Statements and Interpretations. D. GASB Implementation Guides. |
B. GASB Technical Bulletins.
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Which of the following is not one of the types of opinions an auditor may render in accordance with generally accepted auditing standards?
A. Satisfactory. B. Qualified. C. Unqualified. D. Adverse. |
A. Satisfactory.
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Performance audits, as defined in the GAO's Governmental Auditing Standards
A. Provide a basis for an auditor's opinion as to whether the entity is acquiring, protecting, and using its resources economically and efficiently. B. Provide assurance that operations are in compliance with all applicable laws and regulations that may have a material effect on the financial statements. C. Provide assurance or conclusions based on an evaluation of evidence regarding program effectiveness, economy, and efficiency; internal control compliance, and prospective analyses. D) Are always performed by the internal audit staff to assist the entity's independent auditor. |
C. Provide assurance or conclusions based on an evaluation of evidence regarding program effectiveness, economy, and efficiency; internal control compliance, and prospective analyses.
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Which of the following is the highest in the hierarchy of generally accepted accounting principles according to AICPA Statement of Auditing Standard No. 69, as amended by SAS No. 91, for the federal government entities?
A. AICPA Audit and Accounting Guide. B. FASB emerging issues task force reports. C. GASB statements. D. FASAB statements. |
D. FASAB statements.
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Which of the following kinds of information is not included within the scope of a financial statement audit of a state or local government?
A. Governmental activities financial information. B. Management's discussion and analysis (MD&A). C. Major funds financial information. D. Business-type activities financial information. |
B. Management's discussion and analysis (MD&A).
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An auditor performing nonaudit work for a client may be in danger of violating the independence rules in Government Auditing Standards when he or she
A. Conducts a search and recommends a particular person for a management position for the client. B. Provides advice on establishing or improving internal controls. C. Provides the client with benchmarking information. D. Answers technical questions for the client. |
A. Conducts a search and recommends a particular person for a management position for the client.
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Which of the following is one of the overarching principles in Government Auditing Standards related to auditors performing nonaudit work for clients?
A. Auditors should not provide training to clients. B. Auditors should not provide routine advice to clients or serve on advisory committees. C. Auditors should not audit their own work or provide nonaudit services in situations when the nonaudit services are significant to the audit subject matter. D. Auditors should not propose adjusting and correction entries. |
C. Auditors should not audit their own work or provide nonaudit services in situations when the nonaudit services are significant to the audit subject matter.
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All of the following are characteristics of not-for-profit organizations (NPOs) that distinguish them from business organizations except
A. Contributions by resource providers who do not expect a return on investment. B. Ability to impose taxes on citizens. C. Operating purposes other than to earn a profit. D. Absence of ownership interests. |
B. Ability to impose taxes on citizens.
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Responsibility for establishing generally accepted accounting principles (GAAP) for nongovernmental, not-for-profit organizations rests with the FASB and was most clearly established
A. In the 1930s. B. When the FASB was created in 1974. C. When the GASB was created in 1984. D. In the AICPA's Statement of Auditing Standards No. 69 (hierarchy of GAAP) in 1992. |
D. In the AICPA's Statement of Auditing Standards No. 69 (hierarchy of GAAP) in 1992.
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Statement of Financial Accounting Standards (SFAS) No. 116 on contributions received and contributions made describes measurement and reporting rules for
A. Exchange transactions, such as membership dues and charges for services. B. Nonexchange transactions, such as unrestricted and restricted gifts. C. Gains and losses on investment income. D. Investment income (i.e., dividends and interest). |
B. Nonexchange transactions, such as unrestricted and restricted gifts.
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Statement of Financial Accounting Standards (SFAS) No. 117 requires the following financial statements for all nongovernmental, not-for-profit organizations
A. Statement of financial position, statement of activities, statement of cash flows, and statement of functional expenses. B. Statement of financial position, statement of operations, statement of cash flows, and statement of functional expenses. C. Statement of financial position, statement of activities, and statement of cash flows. D. Statement of financial position, statement of revenues and expenses, statement of cash flows, and statement of functional expenses |
C. Statement of financial position, statement of activities, and statement of cash flows.
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Which of the following statements is true regarding fund accounting for not-for-profit organizations (NPOs)?
A. Fund accounting may provide a good mechanism for facilitating reporting to donors for restricted grants. B. Fund accounting may be used by NPOs for external purposes, but not internal purposes. C. Fund accounting is not allowed. D. SFAS Nos. 116 and 117 method of reporting three classes of net assets (unrestricted, temporarily restricted, and permanently restricted) replaces fund accounting for both internal and external reporting purposes. |
A. Fund accounting may provide a good mechanism for facilitating reporting to donors for restricted grants.
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Which of the following is not a condition that must be met for contributed services to a not-for-profit organization (NPO) to be recorded as both a contribution and as an expense?
A. The service creates or enhances nonfinancial assets, such as a carpenter renovating a building. B. The service is provided by someone who possesses specialized skills, such as a lawyer preparing contracts. C. The service provides tangible benefit, such as serving food to clients. D. The service would have to be purchased if not donated, such as a pro bono annual audit by a local audit firm. |
C. The service provides tangible benefit, such as serving food to clients
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Investments in equity securities that have a readily determinable market value and all debt securities of a not-for-profit organization are reported at
A. Lower of cost or market. B. Amortized cost. C. Fair value. D. Cost. |
C. Fair value.
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An example of an increase in net assets for a not-for-profit organization that would be labeled revenue rather than support is
A. An unconditional promise to give. B. Investment income. C. A restricted gift. D. An allocation of funds from the local United Way organization. |
B. Investment income.
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Which of the following statements is not a true statement about reporting of financially related not-for-profit entities?
A. If an NPO has a controlling interest in a for-profit entity, it should consolidate that entity's financial information with its own. B. If an NPO has a joint agreement with another NPO to provide transportation for clients of the other organization, it should consolidate that entity's financial information with its own. C. If an NPO has an economic interest in another entity but not control, it should disclose that in the notes to the financial statements. D. If an NPO has significant influence over a for-profit entity, it should use the equity method to report that investment on its financial statement. |
B. If an NPO has a joint agreement with another NPO to provide transportation for clients of the other organization, it should consolidate that entity's financial information with its own
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Depreciation expense in a not-for-profit organization should be
A. Assigned to or allocated to the functions to which it relates. B. Reported under the management and general caption. C. Disclosed in the notes to the financial statements. D. Allocated to program but not support functions. |
A. Assigned to or allocated to the functions to which it relates.
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A good reason for an NPO to adopt fund accounting even though FASB standards do not require it is that
A. The NPO provides more than one type of program service. B. The NPO's capital assets are significant. C. Restrictions have been placed on the use of certain of its assets by donors. D. The NPO's donated services are significant. |
C. Restrictions have been placed on the use of certain of its assets by donors
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Temporarily restricted net assets are released from restrictions
A. At the end of each fiscal year. B. As assets are spent for the purposes intended by the donor. C. When funds are returned to the donor. D. When they are converted to permanently restricted net assets |
B. As assets are spent for the purposes intended by the donor.
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A local philanthropist pledged to make a donation of $100,000 to an NPO to be paid in five equal installments of $20,000 beginning in the next fiscal year. Under FASB standards the pledge would be recognized as
A. Support of $20,000 in each of the following five years. B. Support of $20,000 in the year the pledge was made and $80,000 as deferred support. C. Deferred support of $100,000 in the year the pledge was made. D. Support of $100,000 in the year the pledge was made, discounted at an appropriate rate for future receipts. |
D. Support of $100,000 in the year the pledge was made, discounted at an appropriate rate for future receipts.
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Which of the following statements is correct regarding reporting of special events and related direct costs under current FASB standards?
A. Special events and related direct costs must be reported separately at their gross amounts if they relate to the ongoing major operations of an NPO. B. Special events must be reported net of related direct costs, even if they are of a peripheral or incidental nature. C. All special events may be reported net of related direct costs. D. Expenses of promoting and conducting special events should be netted directly against special events revenue. |
A. Special events and related direct costs must be reported separately at their gross amounts if they relate to the ongoing major operations of an NPO.
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An NPO incurred $10,000 in management and general expenses in the current fiscal year. In the organization's statement of activities prepared in conformity with FASB standards, the $10,000 would be reported as
A. A deduction from program revenue. B. A reduction of permanently restricted assets. C. Program services expenses. D. Supporting services expenses. |
D. Supporting services expenses.
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Which of the following would be considered "contribution revenue or support" of an NPO?
A. Gain on disposal of capital assets. B. Contributions received from a fund-raising campaign. C. Rent earned from rental of surplus office space. D. Investment earnings. |
B. Contributions received from a fund-raising campaign.
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Accounting standards for NPOs require
A. Accrual accounting. B. Modified accrual accounting. C. Fund accounting. D. Capitalization of collections |
A. Accrual accounting
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Which of the following organizations would be covered by the AICPA Audit and Accounting Guide Not-for-Profit Organizations?
A. Political parties. B. Employee benefit and pension plans. C. Proprietary hospitals. D. Farm cooperatives. |
A. Political parties
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Which of the following contributions would not have to be reported as an asset on the statement of financial position of a not-for-profit organization?
A. Land was donated to the Friends of the Forest Society for conversion into a nature trail. B. The original courthouse was donated to the Historical Preservation Society that is converting the courthouse to a museum. C. An art collector donated a famous oil painting to a local nongovernmental art museum for display in its exhibit hall. D. A valuable coin collection was donated to the Youth for Conservation organization, which the organization plans to sell at current market prices. |
C. An art collector donated a famous oil painting to a local nongovernmental art museum for display in its exhibit hall.
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The primary standards-setting body for a public museum that receives the majority of its funding from local property taxes is
A. American Institute of CPAs (AICPA). B. Financial Accounting Standards Board (FASB). C. Government Accountability Office (GAO). D. Governmental Accounting Standards Board (GASB). |
D. Governmental Accounting Standards Board (GASB).
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A not-for-profit organization that follows GAAP must display the changes in all classes of net assets on the
A. Statement of activities. B. Statement of financial position. C. Statement of cash flows. D. Statement of functional expenses. |
A. Statement of activities
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When a not-for-profit (nongovernmental) organization spends money for the purpose for which an external donor intended, then the expense is reported as a
A. Decrease in temporarily restricted net assets. B. Decrease in unrestricted net assets. C. Decrease in permanently restricted net assets. D. Decrease in current-restricted fund balance. |
B. Decrease in unrestricted net assets.
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The purpose of a statement of functional expenses is to
A. Report on the net income of each program compared to that of supporting the programs. B. Report on program expenses and supporting expenses. C. Report on the natural expenses (object-of-expense), as well as program and support functions expenses. D. Report on the cash flows of each program and that of supporting the programs. |
C. Report on the natural expenses (object-of-expense), as well as program and support functions expenses.
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Unrealized gains on the investment portfolio of a not-for-profit organization are
A. Not recognized. B. Reported in the net asset section of the balance sheet. C. Depends on whether the gains relate to trading, available-for-sale, or held-to-maturity assets. D. Reported on the statement of activities. |
D. Reported on the statement of activities.
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Which of the following is not one of the criteria specified in AICPA Statement of Position 98-2 that provides guidance on when joint costs with a fund-raising appeal can be reported with program expenses rather than as fund-raising expenses?
A. Purpose. B. Audience. C. Time period. D. Content. |
C. Time period.
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Which of the following terms is used to indicate that a donor provided a gift with explicit instructions that the gift is to be used for a specific purpose by the NPO but the entire amount may be spent right away?
A. Board-designated net assets. B. Permanently restricted net assets. C. Endowment assets. D. Temporarily restricted net assets. |
D. Temporarily restricted net assets
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Which of the following statements is true regarding generally accepted accounting principles (GAAP) for colleges and universities?
A. The FASB has set standards for private and public colleges and universities from the time of its inception in 1974. B. The National Association of Colleges and University Business Officers (NACUBO) only recently began to play a role in establishing accounting and reporting standards for colleges and universities. C. Public and private colleges and universities must comply with the 1973 AICPA Audit and Accounting Guide Audits of Colleges and Universities for financial reporting. D. The GASB is responsible for establishing GAAP for public colleges and universities |
D. The GASB is responsible for establishing GAAP for public colleges and universities.
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. What type of college or university must report expenses by functional classification?
A. Both private and public colleges and universities. B. Private colleges and universities. C. Public colleges and universities. D. Neither private nor public colleges and universities |
B. Private colleges and universities.
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. GASB accounting and reporting standards applicable to public colleges and universities
A. Are now the same as FASB standards to permit comparability between public and private colleges and universities. B. Permit public colleges and universities to use the AICPA model which differs substantially from the reporting model used by private colleges and universities subject to FASB jurisdiction. C. Permit public colleges and universities to optionally follow FASB standards. D. Differ in some significant ways from FASB standards applicable to private colleges and universities. |
D. Differ in some significant ways from FASB standards applicable to private colleges and universities.
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The cost of professors' salaries would normally be recorded in which functional area?
A. Student services. B. Instruction. C. Service. D. Institutional support. |
B. Instruction
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Cactus College, a small private college, received a research grant from NACUBO to study whether service efforts and accomplishments measures improve institutional performance. Under the provisions of SFAS No. 116 the grant would be reported as an increase in:
A. Unrestricted net assets. B. Temporarily restricted net assets. C. Permanently restricted net assets. D. The fund balance of restricted current funds. |
B. Temporarily restricted net assets.
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Which of the following receipts may properly be accounted for as an increase in unrestricted net assets?
A. Student tuition and fees. B. Gift from an alumnus for a new college of business building. C. Federal grant for genetic research. D. Acceptance of assets, the income from which will be paid to the donor. |
A. Student tuition and fees.
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Economic rationality would argue against a university accepting a split interest agreement in which a fixed annuity is payable to the donor if:
A. The donor has attached conditions to the gift. B. The university has no immediate need for the assets. C. The sum of future annuity payments plus interest thereon exceeds the fair market value of the assets. D. The present value of the future annuity payments and other liabilities exceed the fair market value of the assets. |
D. The present value of the future annuity payments and other liabilities exceed the fair market value of the assets.
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FASB standards applicable to private colleges and universities require that their financial statements
A. Provide separate columns for each fund group. B. Include a statement of changes in fund balances. C. Provide aggregated financial information on an entity-wide basis. D. Include a statement of cash flows prepared using the direct method. |
C. Provide aggregated financial information on an entity-wide basis.
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Which of the following items would not affect the amounts reported in Revenues and Gains section of the statement of activities for a private college or university?
A. Student tuition and fees. B. Tuition and fees discounts and allowances. C. Net assets released from restriction. D. Deferred revenues. |
D. Deferred revenues.
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Which of the following is not a condition that would permit a public college or private college or university to avoid accounting recognition of the value of its collections of art, historical treasures, and similar assets?
A. Public colleges and universities are required by GASB standards to capitalize and report all collections. B. The assets are held for public exhibition, education, or research in furtherance of public service rather than financial gain. C. The assets are protected, kept unencumbered, cared for, and preserved. D. The assets are subject to an organizational policy that ensures the proceeds of sales of collectible assets are used to acquire other items for collections. |
A. Public colleges and universities are required by GASB standards to capitalize and report all collections.
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Which of the following is required as part of a complete set of financial statements for a private college or university?
A. Statement of changes in financial position. B. Statement of revenues, expenses, and changes in net assets. C. Statement of activities. D. Statement of functional expenses. |
C. Statement of activities
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Assets that the governing board of a public university, rather than a donor or other outside agency, has determined are to be retained and invested for future scholarships would be reported as
A. An endowment. B. Unrestricted net assets. C. Deposits held in custody for others. D. Restricted net assets. |
B. Unrestricted net assets
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Which of the following statements usually will not be included in the annual financial report of a governmentally owned public university engaged only in business-type activities?
A. Statement of cash flows. B. Statement of net assets. C. Statement of activities. D. Statement of revenues, expenses, and changes in net assets. |
C. Statement of activities
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Tuition scholarships for which there is no intention of collection from the student should be classified by a private university as
A. Reductions of gross revenue to arrive at net revenue. B. Revenues and expenditures. C. Revenues and expenses. D. Reductions of gross revenue or as expenses, provided they are consistently classified in the same manner from year to year. |
A. Reductions of gross revenue to arrive at net revenue.
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Culver City College, a public college, has a 10-week summer session that starts on June 25, 2011, so that one week is held during FY 2011 and the other nine weeks meet during FY 2012. Tuition and fees in the amount of $1,000,000 were collected from students for classes to be conducted in this session. What amount should Culver City College recognize as unrestricted revenue in each of the years ended June 30, 2011 and June 30, 2012.
A. Choice A B. Choice B C. Choice C D. Choice D |
A. Choice A
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An alumnus donates securities to St. Aloysius College, a private college, and stipulates that the principal be held in perpetuity and income from the securities be used for faculty travel. Dividends received from the securities should be recognized as increases in
A. Endowments. B. Unrestricted net assets. C. Permanently restricted net assets. D. Temporarily restricted net assets. |
D. Temporarily restricted net assets.
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During the years ended June 30, 2011 and 2012, Jackson University, a private university, conducted a cancer research project financed by a $1,000,000 gift from an alumnus. The entire amount was pledged by the donor on July 10, 2010, although she paid only $200,000 at that date. The gift was restricted to the financing of this particular research project. During the two-year research period, Jasper's related gift receipts and research expenditures were as follows:
How much contribution revenue should Jasper University report for the year ended June 30, 2012? A. $0 B. $800,000 C. $900,000 D. $1,000,000 |
A. $0
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Are public and private colleges and universities required to report depreciation expense in their financial statements?
A. Public: No; Private: No B. Public: Yes; Private: Yes C. Public: Yes; Private: No D. Public: No; Private: Yes |
B. Public: Yes; Private: Yes
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During the year ended June 30, 2011, Hopkins College, a private college, received a federal government grant of $800,000 for research on the role of music in improving math skills for students. Expenses for this research amounted to $100,000 during the same year. Under applicable FASB standards, assuming this is a nonexchange transaction, Hopkins College would report what amount(s) as changes in net assets for the year ended June 30, 2011?
A. Choice A B. Choice B C. Choice C D. Choice D |
C. Choice C
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Which of the following is not a classification of revenues for a college or university as recommended by the National Association of College and University Business Officers (NACUBO)?
A. Athletic ticket sales. B. Federal appropriations. C. Sales and services of educational activities. D. Private gifts. |
A. Athletic ticket sales
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State educational appropriations received by a public university are classified as which of the following on the statement of revenues, expenses, and changes in net assets?
A. Nonoperating revenue. B. Operating revenue. C. Other financing source. D. Increase in unrestricted net assets. |
A. Nonoperating revenue
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Which of the following is a typical classification of a functional expense in a college or university?
A. Recreation and culture. B. Public safety. C. Institutional support. D. Depreciation. |
C. Institutional support.
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Which of the following measures may be useful to decision makers evaluating the financial condition of a college or university?
A. Number of graduates. B. Current ratio. C. Faculty productivity. D. Graduation rate. |
B. Current ratio.
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Which of the following relationships indicates that River State University, a public university, would report an independent not-for-profit fund-raising foundation as a component unit?
A. The foundation raises and holds economic resources that are entirely or almost entirely for the direct benefit of River State University, but the university can only access the resources if and when the foundation's board of trustees approves a transfer. B. The foundation raises and holds economic resources that are entirely or almost entirely for the direct benefit of River State University, the university has the ability to access the resources at its discretion, and the resources are significant to the university. C. The foundation raises and holds economic resources that are entirely or almost entirely for direct benefit to River State University as well as a group of other universities in the state, but no individual university can access the resources until the foundation's board of trustees approves a transfer. D. The foundation raises and holds economic resources that are entirely or almost entirely for the direct benefit of River State University and the university has the ability to access the resources at its discretion; however, the dollar amount of such resources are not significant to the university. |
B. The foundation raises and holds economic resources that are entirely or almost entirely for the direct benefit of River State University, the university has the ability to access the resources at its discretion, and the resources are significant to the university
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