Deck 8

Question 1

Internal service funds are normally reported in:

Answer 1

The governmental activities column of the government wide financials, because they are generally established to service the governmental funds. Although they are a proprietary fund, they will not be reported in the business-type activities. Enterprise funds are exclusively reported in business-type activities column.

Question 2

Billings for transportation services provided to other governmental units are:

Answer 2

Considered quasi-external transactions and are treated as revenues by the internal service fund.

Question 3

An enterprise fund may be used to account for:

Answer 3

The provision of goods and services that are financed mainly by external user charges. Both state-operated lottery and state-operated hospital are financed mainly by external user charges (aka fees).

Question 4

Shared revenues are:

Answer 4

Revenues levied by one government but shared on a predetermined basis with another government. Shared revenues received by a proprietary fund should be recorded as non-operating revenue.

Question 5

Designations of an enterprise fund’s net position for future equipment replacement would be displays as:

Answer 5

Unrestricted net position. Net position will include classifications for investment in capital assets net of related debts, amount restricted by external sources, and unrestricted components. Internal designations are classified as unrestricted.

Question 6

Routine employee contributions from the general fund to a pension trust fund is:

Answer 6

An expenditure of a governmental unit’s general fund. Since the general fund bears the cost of funding the pension plan it would be a expenditure to the general fund.

Question 7

In an Agency fund, the fee withheld is reported as a:

Answer 7

Liability - Due to other funds.

Question 8

The reconciliation of the change in fund balance in governmental fund financial statements to the change in net position from governmental activities in the government-wide financials is computed using the:

Answer 8

GOES BARE mnemonic.
G = Change in Governmental Fund Balance
Less: O = Other Financing Sources
Plus: E = Expenditures - Capital Outlay (net of depreciation)
Plus: S = Internal Service Fund Net Income
= Change in Net Position in government-wide financials

Question 9

The focus of government-wide financials is:

Answer 9

To report the extent to which they have met their objectives efficiently and effectively, using all resources available. Therefore, they are focused on operation accountability and not fiscal accountability.

Question 10

The minimum budgetary information presented in government-wide financials, as required supplemental information, would include:

Answer 10

A schedule showing the original budget, the final appropriations budget, and actual inflows, outflows, and balances on the budgetary basis. Variance presentations are optional.

Question 11

The Comprehensive Annual Financial Report (CAFR) is divided into 3 parts and they are:

Answer 11

The introductory section, the basic financial statements and required supplementary information, and the statistical sections.

Question 12

The introductory section of CAFR includes:

Answer 12

Very limited information about the government.

Question 13

MD&A is considered part of the:

Answer 13

Basic financials and required supplementary information.

Question 14

Budgetary comparison schedules should be presented as:

Answer 14

Required supplementary information or basic financials for the general fund and for each major special revenue fund. Budgetary comparisons are required for General and Special Revenue funds, not all governmental funds.

Question 15

The modified approach for reporting infrastructure allows governments:

Answer 15

To not report depreciation expense for eligible infrastructure assets if a) the government manages the eligible infrastructure assets using an asset management system and b) documents that the eligible assets are being preserved at (or above) a condition level set by the government. The government must report the assessed condition of the infrastructure every three years and the estimated annual amount to maintain and preserve the conditions level set and disclosed.

Question 16

In order for not-for-profit donations to be restricted it must be:

Answer 16

Restricted by the donors, creditors, grantors, or laws and regulations.

Question 17

Services contributed are:

Answer 17

Unrestricted revenue for Not-for-Profit organizations.

Question 18

The expense categories used by not-for-profit organizations fall under 2 main headings:

Answer 18

Program services (functional expenses/direct) and Support services (G&A/Fundraising & membership development).

Question 19

Entities that elect to not capitalize their permanent collections display insurance proceeds from lost, stolen, or damaged items on the:

Answer 19

Statement of activities in an appropriate change in net asset classification, separate from revenues, expenses, gains, and losses.

Question 20

Contributions to a not-for-profit include transactions which are:

Answer 20

Unconditional (do not require a future event for occur), non-reciprocal, voluntary, and not for an ownership investment.

Question 21

Quasi-endowment fund accounts for assets that have been:

Answer 21

Internally designated by the institution for a specific purpose. And are displayed as unrestricted net assets on externally financials.

Question 22

Expenses are reported as decreases in:

Answer 22

Unrestricted Net Assets.

Question 23

Grants to other organizations are reported as:

Answer 23

Expenses in a not-for-profit organization.

Question 24

Donated services should be recorded as contribution revenue and expense at fair value if the services meet the following criteria:

Answer 24

1. They create or enhance a non-financial asset
   or
2. They require specialized skills that the provider possesses and would otherwise have been purchased by the organization.

Question 25

Good faith deposits associated with conditional promises would be recorded as:

Answer 25

A Liability title “refundable advance”. A gift is with conditions is a refundable gift until conditions are met.

Question 26

Program costs are costs:

Answer 26

That are specifically related to what the organization is chartered. i.e direct costs.

Question 27

Support costs are costs:

Answer 27

That do not fall into the program cost category. i.e indirect costs (fundraising, administration, mgmt and general, and membership development).

Question 28

Program services, fund-raising, and management and general are the most common:

Answer 28

Functional expense classifications.

Question 29

Pledge receivables are recorded at their:

Answer 29

Present value.

Question 30

Gaines and losses on permanently restricted investments are:

Answer 30

Not charged to permanently restricted net assets. They should be reported in the statement of activities as increases or decreases in unrestricted net assets unless otherwise stipulated by the donor or law.

Question 31

Internal board designated funds are:

Answer 31

Considered unrestricted. Only donors can restrict contributions.