NFP Test UPDATED Exam Questions and
CORRECT Answers
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? -
CORRECT ANSWER - A primary source of revenues is taxes.
When the budget of a government is adopted and Estimated Revenues exceed Appropriations,
the excess is: - CORRECT ANSWER - Credited to Budgetary Fund Balance.
One characteristic that distinguishes other financing sources from revenues is that other
financing sources: - CORRECT ANSWER - Arise from debt issuances or interfund
transfers in.
Which of the following depict the typical order of steps in the acquisition of goods and services
by an activity accounted for by the General Fund? - CORRECT ANSWER -
Appropriation, encumbrance, expenditure, disbursement.
When supplies ordered for use in an activity accounted for in the General Fund are received at an
actual price that is more than the estimated price on the purchase order, the Encumbrance
account is: - CORRECT ANSWER - Credited for the estimated price on the purchase
order.
Which of the following transactions is classified as an exchange transaction? - CORRECT
ANSWER - Fees charged by a municipal airport.
Which of the following is true regarding other financing sources and other financing uses? -
CORRECT ANSWER - Both must be reported separately from revenues and expenditures
in the statement of revenues, expenditures, and changes in fund balances.
The County Commission of Seminole County adopted its General Fund budget for the year
ending June 30, comprising estimated revenues of $13,200,000 and appropriations of
$12,900,000. Seminole County utilizes the budgetary accounts required by GASB standards. The
, journal entry to record budgeted appropriations will include: - CORRECT ANSWER -A
credit to Appropriations, $12,900,000.
Which of the following funds would be most appropriate when accounting for an activity that
provides goods or services to the public for a fee that is intended to make the activity self-
supporting? - CORRECT ANSWER - Enterprise fund.
Use the following information to determine whether the Development Special Revenue and the
Debt Service Funds should be reported as major funds based on asset amounts provided.
Development Special Revenue Fund Assets $740,000 Debt Service Fund Assets $150,000 Total
Governmental Fund Assets $7,500,000 Total Governmental Fund and Enterprise Fund Assets
$8,750,000 - CORRECT ANSWER - Neither the Development Special Revenue Fund nor
the Debt Service Fund should be reported as major.
Which of the following will increase the fund balance of a government at the end of the fiscal
year? - CORRECT ANSWER - The sum of revenues and other financing sources is more
than the sum of expenditures and other financing uses.
Which of the following should be included in the financial section of a comprehensive annual
financial report? - CORRECT ANSWER - The basic financial statements, including notes
thereto.
The activities of a water utility department, which offers its services to the general public on a
user charge basis, should be accounted for in - CORRECT ANSWER - An enterprise fund.
Extraordinary items and special items are reported on the government-wide statement of
activities - CORRECT ANSWER - As separate line items below General Revenues in the
statement of activities.
The governmental funds operating statement presents all of the following except - CORRECT
ANSWER - Encumbrances.
CORRECT Answers
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? -
CORRECT ANSWER - A primary source of revenues is taxes.
When the budget of a government is adopted and Estimated Revenues exceed Appropriations,
the excess is: - CORRECT ANSWER - Credited to Budgetary Fund Balance.
One characteristic that distinguishes other financing sources from revenues is that other
financing sources: - CORRECT ANSWER - Arise from debt issuances or interfund
transfers in.
Which of the following depict the typical order of steps in the acquisition of goods and services
by an activity accounted for by the General Fund? - CORRECT ANSWER -
Appropriation, encumbrance, expenditure, disbursement.
When supplies ordered for use in an activity accounted for in the General Fund are received at an
actual price that is more than the estimated price on the purchase order, the Encumbrance
account is: - CORRECT ANSWER - Credited for the estimated price on the purchase
order.
Which of the following transactions is classified as an exchange transaction? - CORRECT
ANSWER - Fees charged by a municipal airport.
Which of the following is true regarding other financing sources and other financing uses? -
CORRECT ANSWER - Both must be reported separately from revenues and expenditures
in the statement of revenues, expenditures, and changes in fund balances.
The County Commission of Seminole County adopted its General Fund budget for the year
ending June 30, comprising estimated revenues of $13,200,000 and appropriations of
$12,900,000. Seminole County utilizes the budgetary accounts required by GASB standards. The
, journal entry to record budgeted appropriations will include: - CORRECT ANSWER -A
credit to Appropriations, $12,900,000.
Which of the following funds would be most appropriate when accounting for an activity that
provides goods or services to the public for a fee that is intended to make the activity self-
supporting? - CORRECT ANSWER - Enterprise fund.
Use the following information to determine whether the Development Special Revenue and the
Debt Service Funds should be reported as major funds based on asset amounts provided.
Development Special Revenue Fund Assets $740,000 Debt Service Fund Assets $150,000 Total
Governmental Fund Assets $7,500,000 Total Governmental Fund and Enterprise Fund Assets
$8,750,000 - CORRECT ANSWER - Neither the Development Special Revenue Fund nor
the Debt Service Fund should be reported as major.
Which of the following will increase the fund balance of a government at the end of the fiscal
year? - CORRECT ANSWER - The sum of revenues and other financing sources is more
than the sum of expenditures and other financing uses.
Which of the following should be included in the financial section of a comprehensive annual
financial report? - CORRECT ANSWER - The basic financial statements, including notes
thereto.
The activities of a water utility department, which offers its services to the general public on a
user charge basis, should be accounted for in - CORRECT ANSWER - An enterprise fund.
Extraordinary items and special items are reported on the government-wide statement of
activities - CORRECT ANSWER - As separate line items below General Revenues in the
statement of activities.
The governmental funds operating statement presents all of the following except - CORRECT
ANSWER - Encumbrances.
