G&NFP Exam Review UPDATED ACTUAL
Exam Questions and CORRECT Answers
Which of the following is a special purpose government?
a. The State of Arkansas.
b. Greene Township.
c. City of Seattle.
d. Minneapolis Public Schools. - CORRECT ANSWER -d
Which of the following statements is true for both government organizations and for-profit
organizations?
a. Revenues may be earned through exchange transactions.
b. There is an absence of owners.
c. There is a lack of profit motive.
d. Resources are provided by individuals and entities that may not directly benefit from the use
of the resources. - CORRECT ANSWER -a
Which of the following statements regarding primary sources of accounting and financial
reporting standards is false?
a. The GASB sets standards for all state and local governments.
b. The FASB sets standards for all business and governmental not-for-profit entities.
c. The FASB and GASB are administered by the Financial Accounting Foundation.
d. The FASAB sets standards for the federal government and its agencies and departments. -
CORRECT ANSWER -b
A tax watchdog group is interested in ensuring that the city does not spend more than the amount
of resources it receives in the current fiscal year. The watchdog group is primarily interested in
,a. Fiscal accountability.
b. Social accountability.
c. Political accountability.
d. Operational accountability. - CORRECT ANSWER -a
The concept of interperiod equity refers to whether
a. Revenues equaled or exceeded expenses for the year.
b. Total assets (current and noncurrent) were sufficient to cover total liabilities (current and
noncurrent).
c. Current-year revenues were sufficient to pay for current-year services.
d. Future taxpayers can expect to receive the same or a higher level of services as current
taxpayers. - CORRECT ANSWER -c
What are the components that are included in the minimum requirements for general purpose
external financial reporting?
a. Introductory section, financial section, and statistical section.
b. MD&A, government-wide financial statements, fund financial statements, notes to the
financial statements, and RSI.
c. Letter from the chief financial officer, government financial statements, notes to the financial
statements, and RSI.
d. MD&A, government-wide financial statements, notes to the financial statements, and RSI. -
CORRECT ANSWER -b
The basic financial statements of a not-for-profit include all of the following except
a. Statement of financial position.
b. Statement of activities.
, c. Statement of changes in functional expenses.
d. Statement of cash flows. - CORRECT ANSWER -c
The primary reason that not-for-profit (NFP) organizations should report expenses incurred for
program purposes separately from those for supporting services such as management and general
and fund-raising is that
a. GASB standards require it.
b. Program managers need information about the cost of activities for which they are responsible.
c. Top managers need to know how much they are spending for nonprogrammatic management
and general support.
d. Donors, potential donors, oversight bodies, and others need to know what percentage of total
expenses are being incurred for carrying out the NFP's programs - CORRECT ANSWER -
d
Which of the following financial statements is not a basic financial statement under FASAB
standards?
a. Balance sheet.
b. Statement of changes in net position.
c. Statement of cash flows.
d. Statement of social insurance. - CORRECT ANSWER -c
Which of the following is not a required section of a federal agency or department's performance
and accountability report (PAR)?
a. A performance section, which includes an annual performance report (APRIL).
b. An MD&A.
c. A basic financial statements section.
d. A statement of nonparticipation in political matters. - CORRECT ANSWER -d
Exam Questions and CORRECT Answers
Which of the following is a special purpose government?
a. The State of Arkansas.
b. Greene Township.
c. City of Seattle.
d. Minneapolis Public Schools. - CORRECT ANSWER -d
Which of the following statements is true for both government organizations and for-profit
organizations?
a. Revenues may be earned through exchange transactions.
b. There is an absence of owners.
c. There is a lack of profit motive.
d. Resources are provided by individuals and entities that may not directly benefit from the use
of the resources. - CORRECT ANSWER -a
Which of the following statements regarding primary sources of accounting and financial
reporting standards is false?
a. The GASB sets standards for all state and local governments.
b. The FASB sets standards for all business and governmental not-for-profit entities.
c. The FASB and GASB are administered by the Financial Accounting Foundation.
d. The FASAB sets standards for the federal government and its agencies and departments. -
CORRECT ANSWER -b
A tax watchdog group is interested in ensuring that the city does not spend more than the amount
of resources it receives in the current fiscal year. The watchdog group is primarily interested in
,a. Fiscal accountability.
b. Social accountability.
c. Political accountability.
d. Operational accountability. - CORRECT ANSWER -a
The concept of interperiod equity refers to whether
a. Revenues equaled or exceeded expenses for the year.
b. Total assets (current and noncurrent) were sufficient to cover total liabilities (current and
noncurrent).
c. Current-year revenues were sufficient to pay for current-year services.
d. Future taxpayers can expect to receive the same or a higher level of services as current
taxpayers. - CORRECT ANSWER -c
What are the components that are included in the minimum requirements for general purpose
external financial reporting?
a. Introductory section, financial section, and statistical section.
b. MD&A, government-wide financial statements, fund financial statements, notes to the
financial statements, and RSI.
c. Letter from the chief financial officer, government financial statements, notes to the financial
statements, and RSI.
d. MD&A, government-wide financial statements, notes to the financial statements, and RSI. -
CORRECT ANSWER -b
The basic financial statements of a not-for-profit include all of the following except
a. Statement of financial position.
b. Statement of activities.
, c. Statement of changes in functional expenses.
d. Statement of cash flows. - CORRECT ANSWER -c
The primary reason that not-for-profit (NFP) organizations should report expenses incurred for
program purposes separately from those for supporting services such as management and general
and fund-raising is that
a. GASB standards require it.
b. Program managers need information about the cost of activities for which they are responsible.
c. Top managers need to know how much they are spending for nonprogrammatic management
and general support.
d. Donors, potential donors, oversight bodies, and others need to know what percentage of total
expenses are being incurred for carrying out the NFP's programs - CORRECT ANSWER -
d
Which of the following financial statements is not a basic financial statement under FASAB
standards?
a. Balance sheet.
b. Statement of changes in net position.
c. Statement of cash flows.
d. Statement of social insurance. - CORRECT ANSWER -c
Which of the following is not a required section of a federal agency or department's performance
and accountability report (PAR)?
a. A performance section, which includes an annual performance report (APRIL).
b. An MD&A.
c. A basic financial statements section.
d. A statement of nonparticipation in political matters. - CORRECT ANSWER -d
