G&NFP Exam Review Questions and
Answers 100% Correct
Which of the following is not a required section of a federal agency or department's performance
and accountability report (PAR)?
a. A performance section, which includes an annual performance report (APRIL).
b. An MD&A.
c. A basic financial statements section.
d. A statement of nonparticipation in political matters. d
Which of the following statements is prepared by all not-for-profit organizations?
a. Statement of revenues, expenses, and changes in net position.
b. Statement of changes in net position.
c. Statement of financial position.
d. Both Statement of financial position and Statement of changes in net position. c
,T or F: A characteristic common to governments and not-for-profit organizations is that they do
not exist to provide goods or services at a profit or profit equivalent. T
The Governmental Accounting Standards Board is assigned responsibility for setting accounting
and financial reporting standards for which of the following?
a. State and local government entities and governmentally-related units and agencies, such as
utilities, authorities, hospitals, and colleges and universities.
b. State and local governments and all not-for-profit organizations.
c. Governments such as federal agencies, states, cities, counties, villages, and townships.
d. Not-for-profit organizations. a
Which of the following groups is considered a primary user of a state or local government's
general-purpose external financial statements?
a. Citizens.
b. Managers and administrators.
c. Employees.
d. Special interest groups. a
,T or F: Operational accountability requires providing information that can be used to help assess
whether resources are being used efficiently and effectively. T
You are trying to decide if an entity you are reviewing is a government or a not-for-profit. Which
of the following would indicate it is a government rather than a not-for-profit entity?
a. A primary source of revenues is taxes.
b. Absence of profit motive.
c. Absence of a defined ownership interest that can be sold, transferred, or redeemed.
d. Resource providers do not expect benefits proportional to the resources provided. a
T or F: The FASB standards require not-for-profit entities to separately report program expenses
and support expenses. T
T or F: A difference in the financial reporting objectives for government entities and not-for-
profit entities is that government entities report on compliance with laws, regulations, and rules
that impact financial reports. T
, T or F: The FASB standards require not-for-profit entities to report net assets in three categories:
unrestricted, temporarily restricted, and permanently restricted. F
T or F: The needs of users of government financial reports are the same as those of users of
business entity financial reports. F
T or F: Since neither governments nor not-for-profit entities have investors, the financial
reporting objectives are the same for both types of entities. F
T or F: A primary objective of financial reporting for governments and not-for-profit
organizations is to provide information that can be used in assessing the ability to provide
services. F
T or F: Neither governments nor not-for-profit entities have residual equity that can be
distributed to owners. T
Which of the following best identifies the purpose of the government-wide financial statements?
a. To provide an overview of how government would operate as a business-type entity.
Answers 100% Correct
Which of the following is not a required section of a federal agency or department's performance
and accountability report (PAR)?
a. A performance section, which includes an annual performance report (APRIL).
b. An MD&A.
c. A basic financial statements section.
d. A statement of nonparticipation in political matters. d
Which of the following statements is prepared by all not-for-profit organizations?
a. Statement of revenues, expenses, and changes in net position.
b. Statement of changes in net position.
c. Statement of financial position.
d. Both Statement of financial position and Statement of changes in net position. c
,T or F: A characteristic common to governments and not-for-profit organizations is that they do
not exist to provide goods or services at a profit or profit equivalent. T
The Governmental Accounting Standards Board is assigned responsibility for setting accounting
and financial reporting standards for which of the following?
a. State and local government entities and governmentally-related units and agencies, such as
utilities, authorities, hospitals, and colleges and universities.
b. State and local governments and all not-for-profit organizations.
c. Governments such as federal agencies, states, cities, counties, villages, and townships.
d. Not-for-profit organizations. a
Which of the following groups is considered a primary user of a state or local government's
general-purpose external financial statements?
a. Citizens.
b. Managers and administrators.
c. Employees.
d. Special interest groups. a
,T or F: Operational accountability requires providing information that can be used to help assess
whether resources are being used efficiently and effectively. T
You are trying to decide if an entity you are reviewing is a government or a not-for-profit. Which
of the following would indicate it is a government rather than a not-for-profit entity?
a. A primary source of revenues is taxes.
b. Absence of profit motive.
c. Absence of a defined ownership interest that can be sold, transferred, or redeemed.
d. Resource providers do not expect benefits proportional to the resources provided. a
T or F: The FASB standards require not-for-profit entities to separately report program expenses
and support expenses. T
T or F: A difference in the financial reporting objectives for government entities and not-for-
profit entities is that government entities report on compliance with laws, regulations, and rules
that impact financial reports. T
, T or F: The FASB standards require not-for-profit entities to report net assets in three categories:
unrestricted, temporarily restricted, and permanently restricted. F
T or F: The needs of users of government financial reports are the same as those of users of
business entity financial reports. F
T or F: Since neither governments nor not-for-profit entities have investors, the financial
reporting objectives are the same for both types of entities. F
T or F: A primary objective of financial reporting for governments and not-for-profit
organizations is to provide information that can be used in assessing the ability to provide
services. F
T or F: Neither governments nor not-for-profit entities have residual equity that can be
distributed to owners. T
Which of the following best identifies the purpose of the government-wide financial statements?
a. To provide an overview of how government would operate as a business-type entity.
