GOVERNMENT AND NOT FOR PROFIT
ACCOUNTING CONCEPTS AND PRACTICES 9
2026 FINAL PAPER COMPLETE REVISION
QUESTIONS WITH FULL SOLUTIONS
◉ Which of the following would not be an adjustment for long term
debt when preparing government wide financial statements?
Answer: D. Recording the cash received from a debt issue
◉ Which of the following statement is not correct with respect to the
preparation of government - wide statements? Answer: C.
Worksheet entries must be made to eliminate operating profits
earned by enterprise funds.
◉ A local government purchased a building and recorded the event
by debiting Expenditures - Capital Outlay and crediting cash. What
would be the worksheet entry to prepare the government wide
statements? Answer: A. Debit to Capital Assets and credit to
Expenditures - Capital Outlay
◉ A local government recorded the sale of a capital asset by
recording a debit to cash and credit to proceeds of sale of capital
asset. What is the worksheet entry when preparing the government
wide statements? Answer: C. Debit to Proceeds of sale of capital
,assets and credit to capital asset (net) and gain/loss on sale of
capital asset
◉ A local government issued bonds and recorded the event by
debiting cash and crediting Other Financing Source - Proceeds of
Bonds and Other Financing Source - Premium on Bonds. What is the
worksheet entry when preparing the government wide statements?
Answer: A. Debit Other Financing Sources - Proceeds of Bonds and
Other Financing Sources - Premium on bonds and Credit Bonds
Payable and Premium on Bonds.
◉ A local government recorded the payment of bond principal by
debiting Expenditure: Bond principal and crediting cash. What is the
worksheet entry when preparing the government - wide
statements? Answer: B. Debit Bonds Payable and credit Expenditure
: Bond Principal
◉ In its Statement of Net Assets, a government reported: - assets of
$90 million, including $30 million in capital assets (net) and -
liabilities of $50 million, including long-term debt of $15 million, all
related to capital asset acquisition. The government also reported
$10 million of net assets were restricted for payment of debt service.
The government's unrestricted net assets would be reported as:
Answer: B. $15 million
◉ A governmental fund Statement of Revenues, Expenditures, and
Changes in Fund Balances reported expenditures of $30 million,
, including capital outlay expenditures of $5 million. Capital Assets for
that government cost $90 million, including land of $10 million.
Depreciable assets are amortized over 20 years on average. The
reconciliation from governmental changes in fund balances to
governmental activities changes in net assets would reflect a (an):
Answer: A. Decrease of $1 million
◉ The City of Charlotte levied property taxes in 2012 in the amount
of $10 million. It is estimated that 2% will be noncollectable. During
2012, 9,000,000 was collected and it is anticipated that 400,000 will
be collected during the next 60 days. When moving from the changes
in fund balances int he Statement of Revenues Expenditures, and
Changes in Fund Balances to the changes in net assets in the
Statement of Activities what will be the adjustment? Answer: C. An
increase of $400,000
◉ A governments Statement of Revenues Expenditures and Changes
in Fund Balances reflect proceeds of bonds in the amount of
1,000,000. That statement also reflected expenditures for debt
service in the amount of $3,000,000 including 2,600,000 for
principal payments. Assuming no other changes, the effect when
moving from the change in fund balances in the governmental funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
to the change in net assets for governmental activities in the
Statement of Activities would be a: Answer: C. $1,600,000 increase.
ACCOUNTING CONCEPTS AND PRACTICES 9
2026 FINAL PAPER COMPLETE REVISION
QUESTIONS WITH FULL SOLUTIONS
◉ Which of the following would not be an adjustment for long term
debt when preparing government wide financial statements?
Answer: D. Recording the cash received from a debt issue
◉ Which of the following statement is not correct with respect to the
preparation of government - wide statements? Answer: C.
Worksheet entries must be made to eliminate operating profits
earned by enterprise funds.
◉ A local government purchased a building and recorded the event
by debiting Expenditures - Capital Outlay and crediting cash. What
would be the worksheet entry to prepare the government wide
statements? Answer: A. Debit to Capital Assets and credit to
Expenditures - Capital Outlay
◉ A local government recorded the sale of a capital asset by
recording a debit to cash and credit to proceeds of sale of capital
asset. What is the worksheet entry when preparing the government
wide statements? Answer: C. Debit to Proceeds of sale of capital
,assets and credit to capital asset (net) and gain/loss on sale of
capital asset
◉ A local government issued bonds and recorded the event by
debiting cash and crediting Other Financing Source - Proceeds of
Bonds and Other Financing Source - Premium on Bonds. What is the
worksheet entry when preparing the government wide statements?
Answer: A. Debit Other Financing Sources - Proceeds of Bonds and
Other Financing Sources - Premium on bonds and Credit Bonds
Payable and Premium on Bonds.
◉ A local government recorded the payment of bond principal by
debiting Expenditure: Bond principal and crediting cash. What is the
worksheet entry when preparing the government - wide
statements? Answer: B. Debit Bonds Payable and credit Expenditure
: Bond Principal
◉ In its Statement of Net Assets, a government reported: - assets of
$90 million, including $30 million in capital assets (net) and -
liabilities of $50 million, including long-term debt of $15 million, all
related to capital asset acquisition. The government also reported
$10 million of net assets were restricted for payment of debt service.
The government's unrestricted net assets would be reported as:
Answer: B. $15 million
◉ A governmental fund Statement of Revenues, Expenditures, and
Changes in Fund Balances reported expenditures of $30 million,
, including capital outlay expenditures of $5 million. Capital Assets for
that government cost $90 million, including land of $10 million.
Depreciable assets are amortized over 20 years on average. The
reconciliation from governmental changes in fund balances to
governmental activities changes in net assets would reflect a (an):
Answer: A. Decrease of $1 million
◉ The City of Charlotte levied property taxes in 2012 in the amount
of $10 million. It is estimated that 2% will be noncollectable. During
2012, 9,000,000 was collected and it is anticipated that 400,000 will
be collected during the next 60 days. When moving from the changes
in fund balances int he Statement of Revenues Expenditures, and
Changes in Fund Balances to the changes in net assets in the
Statement of Activities what will be the adjustment? Answer: C. An
increase of $400,000
◉ A governments Statement of Revenues Expenditures and Changes
in Fund Balances reflect proceeds of bonds in the amount of
1,000,000. That statement also reflected expenditures for debt
service in the amount of $3,000,000 including 2,600,000 for
principal payments. Assuming no other changes, the effect when
moving from the change in fund balances in the governmental funds
Statement of Revenues, Expenditures, and Changes in Fund Balances
to the change in net assets for governmental activities in the
Statement of Activities would be a: Answer: C. $1,600,000 increase.
