Governmental and Nonprofit
Accounting with Questions and
100% Correct Answers
During the current year, the local humane society, a nongovernmental not-for-profit organization,
received a $100,000 perpetual endowment from Cobb. Cobb stipulated that the income must be used to
care for older horses that can no longer race. The endowment reported income of $8,000 in the current
year. What amount of contribution revenue should the humane society report as an increase in net
assets without donor restrictions for the current year?
$0
$8,000
$108,000
$100,000 - ✔✔$0
Kew City received a $15,000,000 federal grant to finance the construction of a center for
rehabilitation of drug addicts. The proceeds of this grant should be accounted for in the
General fund.
Trust funds.
Capital projects funds.
Special revenue funds. - ✔✔Capital Projects funds
Which of the following is the paramount objective of financial reporting by state and local governments?
Accountability.
Reliability.
Comparability.
Consistency. - ✔✔Accountability
Which of the following funds would be reported as a fiduciary fund in Pine City's financial statements?
,Permanent.
Private-purpose trust.
Internal service.
Special revenue. - ✔✔Private-purpose trust
The Pel Museum, a nongovernmental not-for-profit entity (NFP), received a contribution of historical
artifacts. It need not recognize the contribution if the artifacts are to be sold and the proceeds used to
Support general museum activities.
Acquire other items for collections.
Purchase buildings to house collections.
Repair existing collections. - ✔✔Acquire other items for collections
Which of the following funds of a governmental unit records depreciation?
Special revenue fund.
Debt service fund.
Capital projects fund.
Internal service fund. - ✔✔Internal service fund
Jonn City entered into a capital lease for equipment during the year. How should the asset obtained
through the lease be reported in Jonn City's government-wide statement of net position?
Other financing use.
General capital asset.
Not reported.
Expenditure. - ✔✔General capital asset
Which of the following is one of the three standard sections of a governmental comprehensive annual
financial report?
,Actuarial.
Single audit.
Investment.
Statistical. - ✔✔Statistical
During the current year, the Finn Foundation, a nongovernmental not-for-profit organization, received a
$1,000,000 perpetual endowment from Chris. Chris stipulated that the income must be used to provide
recreational activities for the elderly. The endowment reported income of $80,000 in the current year.
What amount of contribution revenue should Finn report as an increase in net assets with
donor restrictions at the end of the current year?
$0
$1,080,000
$80,000
$1,000,000 - ✔✔$1,080,000
A $100,000 gift was received by Group Home Projects, a nongovernmental not-for-profit organization.
Group's board of directors stipulated that this gift must be invested for a period of 4 years, with the
income to be used for general operations. How should the gift be reported in Group Home's statement
of activities?
Increase in net assets without donor restrictions.
Increase in net assets with donor restrictions.
Deferred revenue.
Increase in net assets without donor restrictions of $25,000 and donor-restricted support of $75,000. -
✔✔Increase in net assets without donor restrictions
When preparing government-wide financial statements at the end of the fiscal year, Meen County
recorded an adjusting entry for salaries of $8,500,000. The salaries for 1 week, $13,700,000, were paid
on the first Friday of the new fiscal period. The entry to record payment of salaries for the week is
, Salary expenditure
$8,500,000
Salary payable
5,200,000
Cash
$13,700,000
Salary expense
$13,700,000
Cash
$13,700,000
Salary expense
$5,200,000
Salary payable
8,500,000
Cash
$13,700,000
Salary expenditure
$8,500,000
Salary payable
Accounting with Questions and
100% Correct Answers
During the current year, the local humane society, a nongovernmental not-for-profit organization,
received a $100,000 perpetual endowment from Cobb. Cobb stipulated that the income must be used to
care for older horses that can no longer race. The endowment reported income of $8,000 in the current
year. What amount of contribution revenue should the humane society report as an increase in net
assets without donor restrictions for the current year?
$0
$8,000
$108,000
$100,000 - ✔✔$0
Kew City received a $15,000,000 federal grant to finance the construction of a center for
rehabilitation of drug addicts. The proceeds of this grant should be accounted for in the
General fund.
Trust funds.
Capital projects funds.
Special revenue funds. - ✔✔Capital Projects funds
Which of the following is the paramount objective of financial reporting by state and local governments?
Accountability.
Reliability.
Comparability.
Consistency. - ✔✔Accountability
Which of the following funds would be reported as a fiduciary fund in Pine City's financial statements?
,Permanent.
Private-purpose trust.
Internal service.
Special revenue. - ✔✔Private-purpose trust
The Pel Museum, a nongovernmental not-for-profit entity (NFP), received a contribution of historical
artifacts. It need not recognize the contribution if the artifacts are to be sold and the proceeds used to
Support general museum activities.
Acquire other items for collections.
Purchase buildings to house collections.
Repair existing collections. - ✔✔Acquire other items for collections
Which of the following funds of a governmental unit records depreciation?
Special revenue fund.
Debt service fund.
Capital projects fund.
Internal service fund. - ✔✔Internal service fund
Jonn City entered into a capital lease for equipment during the year. How should the asset obtained
through the lease be reported in Jonn City's government-wide statement of net position?
Other financing use.
General capital asset.
Not reported.
Expenditure. - ✔✔General capital asset
Which of the following is one of the three standard sections of a governmental comprehensive annual
financial report?
,Actuarial.
Single audit.
Investment.
Statistical. - ✔✔Statistical
During the current year, the Finn Foundation, a nongovernmental not-for-profit organization, received a
$1,000,000 perpetual endowment from Chris. Chris stipulated that the income must be used to provide
recreational activities for the elderly. The endowment reported income of $80,000 in the current year.
What amount of contribution revenue should Finn report as an increase in net assets with
donor restrictions at the end of the current year?
$0
$1,080,000
$80,000
$1,000,000 - ✔✔$1,080,000
A $100,000 gift was received by Group Home Projects, a nongovernmental not-for-profit organization.
Group's board of directors stipulated that this gift must be invested for a period of 4 years, with the
income to be used for general operations. How should the gift be reported in Group Home's statement
of activities?
Increase in net assets without donor restrictions.
Increase in net assets with donor restrictions.
Deferred revenue.
Increase in net assets without donor restrictions of $25,000 and donor-restricted support of $75,000. -
✔✔Increase in net assets without donor restrictions
When preparing government-wide financial statements at the end of the fiscal year, Meen County
recorded an adjusting entry for salaries of $8,500,000. The salaries for 1 week, $13,700,000, were paid
on the first Friday of the new fiscal period. The entry to record payment of salaries for the week is
, Salary expenditure
$8,500,000
Salary payable
5,200,000
Cash
$13,700,000
Salary expense
$13,700,000
Cash
$13,700,000
Salary expense
$5,200,000
Salary payable
8,500,000
Cash
$13,700,000
Salary expenditure
$8,500,000
Salary payable
