GOVERNMENT AND NOT FOR PROFIT
ACCOUNTING CONCEPTS AND PRACTICES 9
2026 EXAM REVIEW STUDY GUIDE BUNDLED
QUESTIONS AND ANSWERS PREMIUM
◉ Which of the following statements is not correct? Answer: A.
Worksheet entries are posted to the GL when preparing the
government wide statement and then reversed at the beginning of
the next fiscal year.
◉ Which of the following statements is not correct with respect to
the year end adjustments for the government wide statements?
Answer: D. When preparing government wide statements,
depreciation expense must be eliminated.
◉ When preparing government wide financial statements the
modified accrual based governmental funds are adjusted for all of
the following events except? Answer: B. Change in current assets
and current liabilities from year to year
◉ When preparing government wide financial statements, the
modified accrual based governmental funds are adjusted for which
of the following events? Answer: D. All of the above.
,Capital asset related events
Long term debt related events
Internal service fund activities
◉ 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,
ACCOUNTING CONCEPTS AND PRACTICES 9
2026 EXAM REVIEW STUDY GUIDE BUNDLED
QUESTIONS AND ANSWERS PREMIUM
◉ Which of the following statements is not correct? Answer: A.
Worksheet entries are posted to the GL when preparing the
government wide statement and then reversed at the beginning of
the next fiscal year.
◉ Which of the following statements is not correct with respect to
the year end adjustments for the government wide statements?
Answer: D. When preparing government wide statements,
depreciation expense must be eliminated.
◉ When preparing government wide financial statements the
modified accrual based governmental funds are adjusted for all of
the following events except? Answer: B. Change in current assets
and current liabilities from year to year
◉ When preparing government wide financial statements, the
modified accrual based governmental funds are adjusted for which
of the following events? Answer: D. All of the above.
,Capital asset related events
Long term debt related events
Internal service fund activities
◉ 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,
