FAR CPA Exam Questions for Government and Not-for-Profit Accounting Latest 2026_2027 Version Page 1 FAR CPA Exam Questions for Government and Not-for-Profit Accounting Latest 2026_2027 Version.pdf
FAR CPA Exam Questions
for Government and
Not-for-Profit Accounting
Latest 2026/2027 Version
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In Year 1, Gamma, a not-for-profit organization, deposited at a bank $1,000,000 given by a donor to purchase
endowment securities. The securities were purchased January 2, Year 2. At December 31, Year 1, the bank recorded
$2,000 interest on the deposit. In accordance with the bequest, this $2,000 was used to finance ongoing program
expenses in March of Year 2. At December 31, Year 1, what amount of the bank balance should be included as current
assets in Gamma's statement of financial position?
$2,000
At which of the following amounts should a nongovernmental not-for-profit entity report investments in debt
securities?
Quoted market prices
Unrestricted earnings on specific-purpose fund investments that are part of a hospital's central operations are
reported as:
general fund unrestricted revenues.
Page 2 of 23 2 of 23 2026-03-17
, FAR CPA Exam - Government and Not-for-Profit Accounting Page 3 FAR CPA Exam - Government and Not-for-Profit Accounting.pdf
Fenn Museum, a nongovernmental not-for-profit entity, had the following balances in its expense categories for the
statement of activities:
Education $300,000
Fundraising 250,000
Management and general 200,000
Research 50,000
What amount should Fenn report as expenses for support services?
$450,000
Supporting services expenses are separated into two categories:
Management and general
Fundraising
On December 31, 20X1, Dahlia, a nongovernmental not-for-profit entity, purchased a vehicle with $15,000 unrestricted
cash and received a donated second vehicle having a fair value of $12,000. Dahlia expects each vehicle to provide it
with equal service value over each of the next five years and with no residual value. Dahlia has an accounting policy
implying a time restriction on gifts of long-lived assets. In Dahlia's 20X2 statement of financial position, what amount
of temporarily restricted net assets would relate to the donated vehicle?
one year's depreciation of the donated vehicle ($12,000 ÷ 5 years, or $2,400) would reduce its residual value
to $9,600 ($12,000 - $2,400).
Page 3 of 23 3 of 23 2026-03-17
FAR CPA Exam Questions
for Government and
Not-for-Profit Accounting
Latest 2026/2027 Version
Guidehttps://www.stuvia.com/dashboard!@_)#*)(@$)($@*($@)($@*_1 of 23
Page 1 of 23 2026-03-17
,FAR CPA Exam - Government and Not-for-Profit Accounting Page 2 FAR CPA Exam - Government and Not-for-Profit Accounting.pdf
In Year 1, Gamma, a not-for-profit organization, deposited at a bank $1,000,000 given by a donor to purchase
endowment securities. The securities were purchased January 2, Year 2. At December 31, Year 1, the bank recorded
$2,000 interest on the deposit. In accordance with the bequest, this $2,000 was used to finance ongoing program
expenses in March of Year 2. At December 31, Year 1, what amount of the bank balance should be included as current
assets in Gamma's statement of financial position?
$2,000
At which of the following amounts should a nongovernmental not-for-profit entity report investments in debt
securities?
Quoted market prices
Unrestricted earnings on specific-purpose fund investments that are part of a hospital's central operations are
reported as:
general fund unrestricted revenues.
Page 2 of 23 2 of 23 2026-03-17
, FAR CPA Exam - Government and Not-for-Profit Accounting Page 3 FAR CPA Exam - Government and Not-for-Profit Accounting.pdf
Fenn Museum, a nongovernmental not-for-profit entity, had the following balances in its expense categories for the
statement of activities:
Education $300,000
Fundraising 250,000
Management and general 200,000
Research 50,000
What amount should Fenn report as expenses for support services?
$450,000
Supporting services expenses are separated into two categories:
Management and general
Fundraising
On December 31, 20X1, Dahlia, a nongovernmental not-for-profit entity, purchased a vehicle with $15,000 unrestricted
cash and received a donated second vehicle having a fair value of $12,000. Dahlia expects each vehicle to provide it
with equal service value over each of the next five years and with no residual value. Dahlia has an accounting policy
implying a time restriction on gifts of long-lived assets. In Dahlia's 20X2 statement of financial position, what amount
of temporarily restricted net assets would relate to the donated vehicle?
one year's depreciation of the donated vehicle ($12,000 ÷ 5 years, or $2,400) would reduce its residual value
to $9,600 ($12,000 - $2,400).
Page 3 of 23 3 of 23 2026-03-17
