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FUND Accounting exam 1 > exam 1 > Flashcards

exam 1 Flashcards

1
Q

Which of the following statements regarding primary sources of accounting and financial reporting standards is false?

A

The FASB sets standards for all business and not-for-profit entities.

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2
Q

James Black is reviewing his city’s financial reporting because he wants to run for the city council. He is concerned that the city is not using its resources effectively. James is primarily interested in:

A

Operational accountability

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3
Q

The concept of interperiod equity refers to whether

A

Current year revenues were sufficient to pay for current year services.

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4
Q

What are the components that are included in the minimum requirements for general purpose external financial reporting?

A

MD&A, government-wide financial statements, fund financial statements, notes to the financial statements, and RSI.

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5
Q

Under GASB standards, financial information useful for assessing operational accountability is primarily reported in which financial statements?

A

Government wide financial statements NOT Fund financial statements.

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6
Q

Which of the following is not a required section of a federal agency or department’s performance and accountability report (PAR)?

A

A statement of non participation in political matters.

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7
Q

Department of defense is governed by (Federal government)

A

FASAB

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8
Q

American institute of CPA’s is governed by

A

FASB

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9
Q

The county in which you live in is governed by

A

GASB

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10
Q

IRS is governed by (Federal government)

A

FASAB

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11
Q

Mayo clinic is governed by

A

FASB

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12
Q

New York city is governed by

A

GASB

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13
Q

American cancer society is governed by

A

FASB

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14
Q

Metropolitan Washington airports authority is governed by

A

GASB

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15
Q

The Metropolitan Museum of art, NYC is governed by

A

FASB

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16
Q

General purpose governments

A

governments that provide many categories of services to their residents, such as states, counties, municipalities and townships. Typical service include public safety, road maintenance and health and welfare.

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17
Q

Special purpose governments

A

governments that provide only a single function or a limited number of functions, such as independent school districts and special districts.

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18
Q

What are the characteristics that distinguish government and NFP from business organizations?

A
  1. receipt of significant amounts of resources from resource providers who do not expect to receive either repayment or economic benefits proportionate to the resources provided.
  2. Operating purposes that are other than to provide goods or services at a profit or profit equivalent.
  3. Absence of defined ownership interests that can be sold, transferred, or redeemed or that convey entitlement to a share of a residual distribution of resources in the event of liquidation of the organization
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19
Q

GASB

A

The independent agency established under the financial accounting foundation in 1984 as the official body designated by AICPA to set accounting and financial reporting standards for state and local governments

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20
Q

Federal Accounting Standards Advisory Board(FASAB)

A

The nine-member standard setting body that recommends federal government accounting and financial reporting standards to the U.S. Comptroller General, Secretary of the treasury, and the Director of the office of Management and budget.

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21
Q

Accountability

A

Obliged to explain ones actions, to justify what one does; the requirement for government to answer its citizenry- to justify the raising of public resources and expenditure of those resources. Also whether resources were used efficiently, economically, and effectively.

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22
Q

Inter-period equity

A

the extent to which the current-period revenues are adequate to pay for current-period services and whether the burden for services previously provided will be shifted to future taxpayers.

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23
Q

Managements Discussion and Analysis

A

management provides a brief, objective, and easily readable analysis of the governments financial performance for the year and its financial position at year end. An MD&A is required for state and local governments and federal agencies.

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24
Q

Required supplementary information

A

information that is required by GAAP to be included with the audited annual financial statements, usually following the notes to the general purpose external financial statements.

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25
Q

Basic financial statements

A

describes required government-wide and fund financial statements.

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26
Q

Governmental wide financial statements

A

provides highly aggregated overview of a governments net position and results of financial activities.

27
Q

Operational accountability

A

information useful in assessing operating results and short and long term financial position and the cost of providing services from an economic perspective reported in entity-wide financial statements.

28
Q

Fund Financial statements

A

assists in assessing fiscal accountability and provides more detailed information about the government.

29
Q

Governmental funds

A

focuses on the short-term flow of current financial resources rather than on the flow of economic resources.

30
Q

Fiscal accountability

A

ensures the government is complying with the public’s decisions concerning the raising and spending of resources generally within a budgetary period of one year.

31
Q

Modified accrual

A

revenues are recognized in the period they are measurable and available for spending and EXPENDITURES are recognized when they create an obligation to be paid from current financial resources.

32
Q

Comprehensive annual report

A

governments annual report that contains three sections: introductory, financial and statistical. Provides information beyond the general purpose external financial statements and conforms to guidance in the GASB codification.

33
Q

Performance and accountability report

A

a report required to be prepared by by major federal departments and agencies. It includes an annual performance report, annual financial statements, and a variety of management reports on internal control and other accountability issues.

34
Q

Donor imposed restrictions

A

restrictions on the use of contributions such as their contribution be used for a specific purpose or time period. May be temporary or permanent

35
Q

Service efforts and accomplishements

A

conceptualization of resources consumed, tasked performed, goals attained and the relationship among these items in providing services in selected areas.

36
Q

NFP

A

are defined as entities who serve a purpose other than to provide goods or services at a profit, do not have owners and rely on contributed resources.

37
Q

Charitable solicitaion

A

Indirect or direct request for money, credit, property, financial assistance or other items of value on the representation that these assets will be used for a charitable purpose.

38
Q

influencing

A

promote, support, affect, modify, oppose or delay

39
Q

Organizational test

A

articles of incorporation limit the organizations purpose to those described in IRC Sec 501 and do not empower it to engage in activities that are not in furtherance of those purposes.

40
Q

Quid pro quo

A

contribution made in exchange for goods and services

41
Q

Federated fund raising organization

A

an organization composed of independent charitable organizations that have voluntarily joined together to raise and distribute money among themselves.

42
Q

Private foundation

A

An organization exempt from federal income taxes under IRC Sec. 501(a) that (1) receives its support from a small number of individuals or corporations and investment income rather than from the public at large and (2) exists to make grants to public charities.

43
Q

Public charity

A

An organization exempt from taxes under IRC Sec. 501(a) that receives its support from the public at large rather than from a limited number of donors. Most often public charities are exempt from federal income taxes under IRC Sec. 501(c)(3).

44
Q

How is the public support test met

A

is met if NFP receives 1/3 of its total support from investments, contributions made directly or indirectly by the general public or some combination

45
Q

political organization

A

are political action committees, political parties, and campaign committees for candidates for government office.

46
Q

Propoganda

A

information that is skewed toward a particular belief with a tendency to have little or no factual basis.

47
Q

unrelated business income

A

which assesses tax at corporate rates on income that NFPs derive from activities not substantially related to their charitable or tax-exempt mission.

48
Q

Intermediate sanction

A

are penalties assessed when a transaction confers a substantial benefit on a disqualified person.

49
Q

Disqualified person

A

a person who has substantial over the affairs of a NFP organization, such as an officer or manager.

50
Q

Debt financed income

A

income from a property that is subject to debt, such as rental income from a building that has been financed with a mortgage.

51
Q

Feeder organization

A

organization controlled by NFP and formed to carry on a trade or business for the benefit of an exempt organization and remits its profits to the exempt organization.

52
Q

Liquidity

A

Can the organization pay its current debts

53
Q

Going Concern

A

Are revenues sufficient to cover expenses

54
Q

Capital structure

A

Does the company rely more on debt or equity to finance its operations

55
Q

Program effectiveness

A
  • Is an appropriate amount spent on accomplishing the NFP’s goals?
  • Program expenses/total expenses
56
Q

Efficiency

A
  • Is the cost per achieved output decreasing overtime?

- Program expenses/number of clients served

57
Q

Leverage and debt coverage

A

is the debt service expense adequately covered by income

58
Q

Fund raising ratio

A

what percent of contributions remains after adjusting for the cost of raising the contributions

59
Q

Fund raising efficiency

A

are the costs of raising contributions an appropriately small percentage of the contributions received?

60
Q

Investment performance

A

Is the rate of total return on investments reasonable?

61
Q

Approval from the IRS of 501 (C)(3) status exempts an organization from which of the following

A

Federal income taxes

62
Q

an unconditional promise to give is recorded as support in the year:

A

made

63
Q

T/F The fasb indicates that if unconditional pledges will be received in less than a year, they can be recognized at net realizable value

A

True

64
Q

Unrelated business income is reported on form?

A

990T

FUND Accounting exam 1 (1 decks)

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