Governmental & Non Profit Accounting CH 1- |\ |\ |\ |\ |\ |\
3 Exam MC questions with answers
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Governments and nonprofit entities are similar in many ways. |\ |\ |\ |\ |\ |\ |\ |\ |\
Which of the following statements is not true?
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a. Neither governments nor nonprofit entities have a profit
|\ |\ |\ |\ |\ |\ |\ |\ |\
motive.
b. Both governments and nonprofit entities assess taxes.
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c. Both governments and nonprofit entities often report restricted
|\ |\ |\ |\ |\ |\ |\ |\
resources.
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d. Both governments and nonprofit entities provide services. -
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CORRECT ANSWERS ✔✔b. Both governments and nonprofit
|\ |\ |\ |\ |\ |\ |\
entities assess taxes. |\ |\
Why do governments and nonprofit entities use fund accounting?
|\ |\ |\ |\ |\ |\ |\ |\
Select one: |\
a. To allow managers more flexibility when budgeting.
|\ |\ |\ |\ |\ |\ |\
b. To better match revenues and expenses.
|\ |\ |\ |\ |\ |\
c. To help limit errors when posting general journal entries to the
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general ledger. |\
d. To help ensure restricted resources are spent for their intended
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
purpose. - CORRECT ANSWERS ✔✔d. To help ensure restricted
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
resources are spent for their intended purpose.
|\ |\ |\ |\ |\ |\
Which of the following is generally the major source of revenues
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
for governments?
|\
, Select one: |\
a. Revenue from exchange transactions.
|\ |\ |\ |\
b. Taxes.
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c. Revenue from investments.
|\ |\ |\
d. Voluntary donations. - CORRECT ANSWERS ✔✔b. Taxes
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Successful entities prepare budgets. Which of the following
|\ |\ |\ |\ |\ |\ |\ |\
entities is generally required by law to prepare a budget?
|\ |\ |\ |\ |\ |\ |\ |\ |\
Select one: |\
a. Governments.
|\
b. All of the above are required by law to prepare a budget.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
c. Commercial business enterprises.
|\ |\ |\
d. Nonprofit entities. - CORRECT ANSWERS ✔✔a. Governments.
|\ |\ |\ |\ |\ |\ |\
Users of governmental and nonprofit financial reports use
|\ |\ |\ |\ |\ |\ |\ |\
financial statements to answer a number of questions. Which of
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
the following can at least partially be answered by reading a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
government or nonprofit's financial statements? |\ |\ |\ |\
Select one: |\
a. None of the above.
|\ |\ |\ |\
b. Financial statements can be used to answer all of the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
aforementioned questions. |\
c. What is the likelihood of the entity's ability to pay its short-
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
term and long-term financial obligations?
|\ |\ |\ |\
d. What is the entity's ability to continue to provide a particular
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
level of services?
|\ |\
3 Exam MC questions with answers
|\ |\ |\ |\ |\
Governments and nonprofit entities are similar in many ways. |\ |\ |\ |\ |\ |\ |\ |\ |\
Which of the following statements is not true?
|\ |\ |\ |\ |\ |\ |\
a. Neither governments nor nonprofit entities have a profit
|\ |\ |\ |\ |\ |\ |\ |\ |\
motive.
b. Both governments and nonprofit entities assess taxes.
|\ |\ |\ |\ |\ |\ |\
c. Both governments and nonprofit entities often report restricted
|\ |\ |\ |\ |\ |\ |\ |\
resources.
|\
d. Both governments and nonprofit entities provide services. -
|\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔b. Both governments and nonprofit
|\ |\ |\ |\ |\ |\ |\
entities assess taxes. |\ |\
Why do governments and nonprofit entities use fund accounting?
|\ |\ |\ |\ |\ |\ |\ |\
Select one: |\
a. To allow managers more flexibility when budgeting.
|\ |\ |\ |\ |\ |\ |\
b. To better match revenues and expenses.
|\ |\ |\ |\ |\ |\
c. To help limit errors when posting general journal entries to the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
general ledger. |\
d. To help ensure restricted resources are spent for their intended
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
purpose. - CORRECT ANSWERS ✔✔d. To help ensure restricted
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
resources are spent for their intended purpose.
|\ |\ |\ |\ |\ |\
Which of the following is generally the major source of revenues
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
for governments?
|\
, Select one: |\
a. Revenue from exchange transactions.
|\ |\ |\ |\
b. Taxes.
|\
c. Revenue from investments.
|\ |\ |\
d. Voluntary donations. - CORRECT ANSWERS ✔✔b. Taxes
|\ |\ |\ |\ |\ |\ |\
Successful entities prepare budgets. Which of the following
|\ |\ |\ |\ |\ |\ |\ |\
entities is generally required by law to prepare a budget?
|\ |\ |\ |\ |\ |\ |\ |\ |\
Select one: |\
a. Governments.
|\
b. All of the above are required by law to prepare a budget.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
c. Commercial business enterprises.
|\ |\ |\
d. Nonprofit entities. - CORRECT ANSWERS ✔✔a. Governments.
|\ |\ |\ |\ |\ |\ |\
Users of governmental and nonprofit financial reports use
|\ |\ |\ |\ |\ |\ |\ |\
financial statements to answer a number of questions. Which of
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
the following can at least partially be answered by reading a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
government or nonprofit's financial statements? |\ |\ |\ |\
Select one: |\
a. None of the above.
|\ |\ |\ |\
b. Financial statements can be used to answer all of the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
aforementioned questions. |\
c. What is the likelihood of the entity's ability to pay its short-
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
term and long-term financial obligations?
|\ |\ |\ |\
d. What is the entity's ability to continue to provide a particular
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
level of services?
|\ |\
