D250 Pre-Assessment Questions And
verified Correct Answers (2025-2026)
Edition.
Who does the GASB set accounting and financial reporting standards for?
A) Governments such as federal agencies, states, cities, counties, villages, and townships
B) Nonprofit organizations
C) State and local government entities and governmentally related units and agencies
D) State and local governments and all nonprofit organizations - Answer C
Why is the traditional business model of accounting inadequate for governments and nonprofit
organizations (NPOs)?
A) Governments and NPOs have different missions than businesses do.
B) Governments and NPOs have fewer assets than businesses do.
C) Businesses have intangible assets and governments and NPOs do not.
D) Taxes are a major expenditure of businesses but not for governments and NPOs. - Answer A
Which fiscal practice promotes the concept of interperiod equity?
A) Paying the pensions of retired employees out of current operating funds
B) Paying the current-year costs of an administrative staff out of current operating funds
C) Issuing 30-year bonds to finance the current-year operating costs of an administrative staff
D) Charging wages and salaries applicable to services provided in the last week of the current
fiscal year to the following fiscal year - Answer B
Which accounting equation represents a governmental organization?
A) Fund balance = assets + deferred outflows − liabilities − deferred inflows
B) Assets = liabilities + owners' equity
C) Fund balance = assets + deferred outflows
D) Fund balance = assets − liabilities − deferred inflows - Answer A
Which term describes the government and not-for-profit equivalent of the term owners' equity?
,Which functions should be accounted for in an internal service fund?
A) Hospitals and medical facilities
B) A motor pool that acts as an intragovernment rental car agency
C) Convention and entertainment facilities
D) Parking lots and garages - Answer B
Which basis of accounting determines what assets and liabilities will be given accounting
recognition and be reported on the balance sheet?
A) Basis of accounting
B) Nonspendable
C) Measurement focus
D) Assigned fund balance - Answer C
Which activity is an example of a custodial fund?
A) Healthcare insurance and related forms of remuneration to government retirees and their
beneficiaries
B) Account for gifts the school district receives to be used for a particular purpose
C) Taxes collected by one government for the benefit of another
D) Available cash invested into an investment pool to earn a return on assets - Answer C
What does the economic resources measurement for full accrual basis do?
A) It reports only on the balances and flow of current assets and liabilities.
B) It reports only cash or items expected to be converted into cash during the current period.
C) It reports only on the balances and flows of current and noncurrent assets and liabilities.
D) It reports only on governmental activities. - Answer C
Why should governments separate resources into funds?
A) To adhere to restrictions placed on them by various external parties
B) To isolate certain business risks
C) To account for activities by product or region
D) To minimize their tax obligations - Answer A
, A) The actual amounts in the budgetary comparison schedule should be reported on the GAAP
basis.
B) Both the budgeted and actual amounts in the budgetary comparison schedule should be
reported on the GAAP basis.
C) The actual amounts in the budgetary comparison schedule should be reported using the
government's budgetary basis.
D) Only a budgetary comparison schedule prepared for the appropriate state oversight body is
required. - Answer C
Expenditures for supplies ordered by a special revenue fund were inadvertently recorded in the
accounts of the general fund in the amount of $100.What should the journal entry for the
general fund include, upon reimbursement of the $100, later the same month?
A) A credit to Expenditures
B) A credit to Encumbrances
C) A credit to Interfund Transfers In
D) A credit to Fund Balance - Answer A
What is the first recording step for the general fund?
A) Disbursement
B) Encumbrance
C) Appropriations
D) Expenditures - Answer C
When should an encumbrance be recorded?
A) When a purchase order is issued
B) When an invoice is received
C) When a sales order is issued
D) When the general fund transfers money to another fund - Answer A
How many days after the close of the year must revenues from property taxes be received to
satisfy the criteria of having been received soon enough to pay the liabilities of the current
period?
A) 30 days
verified Correct Answers (2025-2026)
Edition.
Who does the GASB set accounting and financial reporting standards for?
A) Governments such as federal agencies, states, cities, counties, villages, and townships
B) Nonprofit organizations
C) State and local government entities and governmentally related units and agencies
D) State and local governments and all nonprofit organizations - Answer C
Why is the traditional business model of accounting inadequate for governments and nonprofit
organizations (NPOs)?
A) Governments and NPOs have different missions than businesses do.
B) Governments and NPOs have fewer assets than businesses do.
C) Businesses have intangible assets and governments and NPOs do not.
D) Taxes are a major expenditure of businesses but not for governments and NPOs. - Answer A
Which fiscal practice promotes the concept of interperiod equity?
A) Paying the pensions of retired employees out of current operating funds
B) Paying the current-year costs of an administrative staff out of current operating funds
C) Issuing 30-year bonds to finance the current-year operating costs of an administrative staff
D) Charging wages and salaries applicable to services provided in the last week of the current
fiscal year to the following fiscal year - Answer B
Which accounting equation represents a governmental organization?
A) Fund balance = assets + deferred outflows − liabilities − deferred inflows
B) Assets = liabilities + owners' equity
C) Fund balance = assets + deferred outflows
D) Fund balance = assets − liabilities − deferred inflows - Answer A
Which term describes the government and not-for-profit equivalent of the term owners' equity?
,Which functions should be accounted for in an internal service fund?
A) Hospitals and medical facilities
B) A motor pool that acts as an intragovernment rental car agency
C) Convention and entertainment facilities
D) Parking lots and garages - Answer B
Which basis of accounting determines what assets and liabilities will be given accounting
recognition and be reported on the balance sheet?
A) Basis of accounting
B) Nonspendable
C) Measurement focus
D) Assigned fund balance - Answer C
Which activity is an example of a custodial fund?
A) Healthcare insurance and related forms of remuneration to government retirees and their
beneficiaries
B) Account for gifts the school district receives to be used for a particular purpose
C) Taxes collected by one government for the benefit of another
D) Available cash invested into an investment pool to earn a return on assets - Answer C
What does the economic resources measurement for full accrual basis do?
A) It reports only on the balances and flow of current assets and liabilities.
B) It reports only cash or items expected to be converted into cash during the current period.
C) It reports only on the balances and flows of current and noncurrent assets and liabilities.
D) It reports only on governmental activities. - Answer C
Why should governments separate resources into funds?
A) To adhere to restrictions placed on them by various external parties
B) To isolate certain business risks
C) To account for activities by product or region
D) To minimize their tax obligations - Answer A
, A) The actual amounts in the budgetary comparison schedule should be reported on the GAAP
basis.
B) Both the budgeted and actual amounts in the budgetary comparison schedule should be
reported on the GAAP basis.
C) The actual amounts in the budgetary comparison schedule should be reported using the
government's budgetary basis.
D) Only a budgetary comparison schedule prepared for the appropriate state oversight body is
required. - Answer C
Expenditures for supplies ordered by a special revenue fund were inadvertently recorded in the
accounts of the general fund in the amount of $100.What should the journal entry for the
general fund include, upon reimbursement of the $100, later the same month?
A) A credit to Expenditures
B) A credit to Encumbrances
C) A credit to Interfund Transfers In
D) A credit to Fund Balance - Answer A
What is the first recording step for the general fund?
A) Disbursement
B) Encumbrance
C) Appropriations
D) Expenditures - Answer C
When should an encumbrance be recorded?
A) When a purchase order is issued
B) When an invoice is received
C) When a sales order is issued
D) When the general fund transfers money to another fund - Answer A
How many days after the close of the year must revenues from property taxes be received to
satisfy the criteria of having been received soon enough to pay the liabilities of the current
period?
A) 30 days
