ACCOUNTING FOR GOVERNMENTAL AND
NONPROFIT ENTITIES ACTUAL TEST
QUESTIONS AND SOLUTIONS
COMPREHENSIVE REVIEW PACKAGE
●● What amount was issued in general obligation bonds by the City of
Thomasville on October 1, 2023?
Answer: $5,000,000 at 101.
●● What was the purpose of the general obligation bonds issued by the
City of Thomasville?
Answer: To construct an addition to City Hall.
●● How much was used to construct the addition to City Hall?
Answer: $4,968,750.
●● When is the first annual principal payment due for the bonds issued
by the City of Thomasville?
Answer: October 1, 2024.
●● What is the fiscal year for the City of Thomasville?
Answer: July 1 to June 30.
,●● What amount would be reported as debt service expenditures for the
year ended June 30, 2024?
Answer: $100,000 (first interest payment).
●● What amount would be reported as debt service expenditures for the
year ended June 30, 2025?
Answer: $445,000 (includes interest and principal payments).
●● What is the correct statement regarding Special Revenue Funds?
Answer: Special Revenue Funds are used when a substantial portion of
the resources are provided by restricted or committed revenue sources.
●● What does GASB restrict regarding Special Revenue Funds?
Answer: They can only be used when funds are restricted or committed;
merely assigning funds is not sufficient.
●● What is the focus of the governmental fund Statement of Revenues,
Expenditures, and Changes in Fund Balance?
Answer: It is prepared using the current financial resources measurement
focus and the modified accrual basis of accounting.
●● How are revenues reported in the governmental fund Statement of
Revenues, Expenditures, and Changes in Fund Balance?
,Answer: Revenues are reported by source.
●● How are expenditures reported in the governmental fund Statement
of Revenues, Expenditures, and Changes in Fund Balance?
Answer: Expenditures are reported by character such as current, debt
service, and capital outlay.
●● What is required in the reconciliation of the change in net position to
the balance sheet?
Answer: Reconciliation is required.
●● What is the significance of estimating uncollectible taxes in property
tax assessments?
Answer: It helps a county government prepare for potential losses in tax
revenue.
●● What is the interest rate on the general obligation bonds issued by
the City of Thomasville?
Answer: 4%.
●● When were the bonds issued by the City of Thomasville dated?
Answer: October 1, 2023.
, ●● What is the total amount of annual principal payments due for the
bonds issued?
Answer: $250,000 annually.
●● What happens to the premium from the bond issuance?
Answer: It was transferred to a debt service fund.
●● What is the total interest payment for the first year on the bonds?
Answer: $100,000.
●● What are the components of the debt service expenditures for the
year ended June 30, 2025?
Answer: Interest for 6 months, principal payment, and interest for six
months on the remaining balance.
●● What is the total amount of interest for the second payment in 2025?
Answer: $95,000.
●● What does the term 'Estimated Uncollectible Taxes Expense' refer
to?
Answer: It refers to the anticipated losses from taxes that are not
expected to be collected.
NONPROFIT ENTITIES ACTUAL TEST
QUESTIONS AND SOLUTIONS
COMPREHENSIVE REVIEW PACKAGE
●● What amount was issued in general obligation bonds by the City of
Thomasville on October 1, 2023?
Answer: $5,000,000 at 101.
●● What was the purpose of the general obligation bonds issued by the
City of Thomasville?
Answer: To construct an addition to City Hall.
●● How much was used to construct the addition to City Hall?
Answer: $4,968,750.
●● When is the first annual principal payment due for the bonds issued
by the City of Thomasville?
Answer: October 1, 2024.
●● What is the fiscal year for the City of Thomasville?
Answer: July 1 to June 30.
,●● What amount would be reported as debt service expenditures for the
year ended June 30, 2024?
Answer: $100,000 (first interest payment).
●● What amount would be reported as debt service expenditures for the
year ended June 30, 2025?
Answer: $445,000 (includes interest and principal payments).
●● What is the correct statement regarding Special Revenue Funds?
Answer: Special Revenue Funds are used when a substantial portion of
the resources are provided by restricted or committed revenue sources.
●● What does GASB restrict regarding Special Revenue Funds?
Answer: They can only be used when funds are restricted or committed;
merely assigning funds is not sufficient.
●● What is the focus of the governmental fund Statement of Revenues,
Expenditures, and Changes in Fund Balance?
Answer: It is prepared using the current financial resources measurement
focus and the modified accrual basis of accounting.
●● How are revenues reported in the governmental fund Statement of
Revenues, Expenditures, and Changes in Fund Balance?
,Answer: Revenues are reported by source.
●● How are expenditures reported in the governmental fund Statement
of Revenues, Expenditures, and Changes in Fund Balance?
Answer: Expenditures are reported by character such as current, debt
service, and capital outlay.
●● What is required in the reconciliation of the change in net position to
the balance sheet?
Answer: Reconciliation is required.
●● What is the significance of estimating uncollectible taxes in property
tax assessments?
Answer: It helps a county government prepare for potential losses in tax
revenue.
●● What is the interest rate on the general obligation bonds issued by
the City of Thomasville?
Answer: 4%.
●● When were the bonds issued by the City of Thomasville dated?
Answer: October 1, 2023.
, ●● What is the total amount of annual principal payments due for the
bonds issued?
Answer: $250,000 annually.
●● What happens to the premium from the bond issuance?
Answer: It was transferred to a debt service fund.
●● What is the total interest payment for the first year on the bonds?
Answer: $100,000.
●● What are the components of the debt service expenditures for the
year ended June 30, 2025?
Answer: Interest for 6 months, principal payment, and interest for six
months on the remaining balance.
●● What is the total amount of interest for the second payment in 2025?
Answer: $95,000.
●● What does the term 'Estimated Uncollectible Taxes Expense' refer
to?
Answer: It refers to the anticipated losses from taxes that are not
expected to be collected.
