NFP HW MC Exam 1 Latest Update
Indicate the fund in which each transaction will be recorded:
The city collects $3 million of taxes on behalf of the county in which it is located. -
ANSWER-Agency
Indicate the fund in which each transaction will be recorded:
It spends $4 million to pave city streets, using the proceeds of a city gasoline tax
dedicated for road and highway improvements - ANSWER-Special revenue
Indicate the fund in which each transaction will be recorded:
It receives a contribution of $5 million. Per the stipulation of the donor, the money is
to be invested in marketable securities, and the interest from the sercurities is to be
used to maintain a city park. - ANSWER-permnanent
1 It collects $800,000 in landing fees at the city-owned airport. - ANSWER-Enterprise
it earns $200,000 on investments set aside to make principal payments on the city's
outstanding bonds. The bonds were issued to finance improvements to the city's
tunnels and bridges. - ANSWER-Debt service
It pays $80,000 in wages and salaries to police officers. - ANSWER-General
It purchases from an outside supplier $40,000 stationery that it will "sell" to its
various operating departments. - ANSWER-Internal Services
The traditional business model of accounting is inadequate for governments and not-
for-profit organizations primarily because businesses differ from governments and
not-for-profit organizations in that
a. They have different missions
b. They have fewer assets
c. Their assets are intangible
d. Taxes are a major expenditure of businesses - ANSWER-A
If businesses are "governed by the marketplace," governments are governed by
a. Legislative bodies
b. Taxes
c. Budgets
d. State constitutions - ANSWER-C
The primary objective of a not-for-profit organization or a government is to
a. Maximize revenues
b. Minimize expenditures
c. Provide services to constituents
d. All of the above - ANSWER-C
In governments, in contrast to businesses.
, a. Expenditures are driven mainly by the ability of of the entity to raise revenues
b. The amount of revenues collected is a signal of the demand for services
c. There may not be a direct relationship between revenues raised and the demand
for the entity's services
d. The amount of expenditures is independent of the amount of revenues collected -
ANSWER-C
The organization responsible for setting accounting standards for state and local
governments is the
a. FASB
b. GASB
c. FASAB
d. AICPA - ANSWER-B
Fhe number of governmental units in the United States is approximately
a. 895
b. 8,950
c. 89,000
d. 895,000 - ANSWER-C
Governments differ from businesses in that they
a. Do not raise capital in the financial markets
b. Do not engage in transactions in which they "sell" goods or services
c. Are not required to prepare annual financial reports
d. Do not issue common stock - ANSWER-D
Interperiod equity refers to a condition whereby
a. Total tax revenues are approximately the same from year to year
b. Taxes are distributed fairly among all taxpayers regardless of income level
c. Current-year revenues are sufficient to pay for current year services
d. Current-year revenues cover both operating and capital expenditures - ANSWER-
C
Which of the following is not one of the GASB's financial reporting objectives?
a. Providing information on the extent to which interperiod equity is achieved
b. Ensuring that budgeted revenues are equal to or exceed budgeted expenses
c. Reporting on budgetary compliance
d. Providing information on service efforts and accomplishments - ANSWER-B
Which of the following is not one of the FASB's financial reporting objectives?
a. Providing information about economic resources, obligations, and net resources
b. Providing information to help resource providers make rational decisions
c. Reporting on budgetary compliance
d. Providing information on service efforts and accomplishments - ANSWER-C
Rule 203 of the AICPA's Code of Professional Conduct pertains to
a. CPAs' independence
b. Authorities designated to establish accounting standards
c. Standards of competency
d. Solicitation of new clients by a CPA - ANSWER-B
Indicate the fund in which each transaction will be recorded:
The city collects $3 million of taxes on behalf of the county in which it is located. -
ANSWER-Agency
Indicate the fund in which each transaction will be recorded:
It spends $4 million to pave city streets, using the proceeds of a city gasoline tax
dedicated for road and highway improvements - ANSWER-Special revenue
Indicate the fund in which each transaction will be recorded:
It receives a contribution of $5 million. Per the stipulation of the donor, the money is
to be invested in marketable securities, and the interest from the sercurities is to be
used to maintain a city park. - ANSWER-permnanent
1 It collects $800,000 in landing fees at the city-owned airport. - ANSWER-Enterprise
it earns $200,000 on investments set aside to make principal payments on the city's
outstanding bonds. The bonds were issued to finance improvements to the city's
tunnels and bridges. - ANSWER-Debt service
It pays $80,000 in wages and salaries to police officers. - ANSWER-General
It purchases from an outside supplier $40,000 stationery that it will "sell" to its
various operating departments. - ANSWER-Internal Services
The traditional business model of accounting is inadequate for governments and not-
for-profit organizations primarily because businesses differ from governments and
not-for-profit organizations in that
a. They have different missions
b. They have fewer assets
c. Their assets are intangible
d. Taxes are a major expenditure of businesses - ANSWER-A
If businesses are "governed by the marketplace," governments are governed by
a. Legislative bodies
b. Taxes
c. Budgets
d. State constitutions - ANSWER-C
The primary objective of a not-for-profit organization or a government is to
a. Maximize revenues
b. Minimize expenditures
c. Provide services to constituents
d. All of the above - ANSWER-C
In governments, in contrast to businesses.
, a. Expenditures are driven mainly by the ability of of the entity to raise revenues
b. The amount of revenues collected is a signal of the demand for services
c. There may not be a direct relationship between revenues raised and the demand
for the entity's services
d. The amount of expenditures is independent of the amount of revenues collected -
ANSWER-C
The organization responsible for setting accounting standards for state and local
governments is the
a. FASB
b. GASB
c. FASAB
d. AICPA - ANSWER-B
Fhe number of governmental units in the United States is approximately
a. 895
b. 8,950
c. 89,000
d. 895,000 - ANSWER-C
Governments differ from businesses in that they
a. Do not raise capital in the financial markets
b. Do not engage in transactions in which they "sell" goods or services
c. Are not required to prepare annual financial reports
d. Do not issue common stock - ANSWER-D
Interperiod equity refers to a condition whereby
a. Total tax revenues are approximately the same from year to year
b. Taxes are distributed fairly among all taxpayers regardless of income level
c. Current-year revenues are sufficient to pay for current year services
d. Current-year revenues cover both operating and capital expenditures - ANSWER-
C
Which of the following is not one of the GASB's financial reporting objectives?
a. Providing information on the extent to which interperiod equity is achieved
b. Ensuring that budgeted revenues are equal to or exceed budgeted expenses
c. Reporting on budgetary compliance
d. Providing information on service efforts and accomplishments - ANSWER-B
Which of the following is not one of the FASB's financial reporting objectives?
a. Providing information about economic resources, obligations, and net resources
b. Providing information to help resource providers make rational decisions
c. Reporting on budgetary compliance
d. Providing information on service efforts and accomplishments - ANSWER-C
Rule 203 of the AICPA's Code of Professional Conduct pertains to
a. CPAs' independence
b. Authorities designated to establish accounting standards
c. Standards of competency
d. Solicitation of new clients by a CPA - ANSWER-B
