ACCY 161 Exam 3

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SusanneS28
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ACCY 161 Exam 3
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2013-12-06 11:45:44
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ACCY 161 Exam
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  1. An audit of a government, conducted in
    accordance with generally accepted governmental auditing standards (GAGAS),
    includes
    • An examination of financial statements guided by the AICPA
    • Tests for compliance with laws and regulations
  2. The single audit concept refers to
    Audits following the OMB circular A-1333
  3. A typical objective of a performance audit is for the auditor to
    Make recommendations for improving performance
  4. In single audit, the federal government's representative is the
    Cognizant agency
  5. The Comptroller General of the United States is the head of the
    Governmental Accountability Office
  6. The first step in the flow of budgetary authority through the budgetary accounts of a federal agency is:
    Appropriations
  7. Federal capital heritage assets the possess_________qualities
    Educational & Cultural
  8. Which of the following systems of cost allocation is most common in governmental accounting?
    Step-down method
  9. Responsibility for promulgating generally accepted accounting principles for non-governemental, not-for-profit entities rests with the
    FASB
  10. Statement of Financial Accounting Standards (SFAS) No. 117 requires the following financial reporting perspective for not-for-profit organizations
    Aggregate
  11. A good reason for a not-for-profit organization to adopt fund accounting is that
    Restrictions have been placed on the use of certain of its assets by doners
  12. Charity service and bad debts in a public hospital that follows business-type accounting are reported
    Differently, charity service is merely disclosed in the notes to the financial statements, and bad debts are reported as a deduction from revenue.
  13. Fixed dollar amount of fees per person paid periodically by a third-payor to a health car provider
    Capitalization fee
  14. A case-mix classification scheme in the Medicare program to determine reimbursement for inpatient services
    DRG fee
  15. The federal retirement plan (the pension plan):
    is unfunded
  16. The Nonprofit Integrity Act of 2004 has requirements for
    • Audit committees
    • Annual financial audits
    • Review of executive compensation
  17. The cornerstone of accounting and financial reporting for not-for-profit organizations is
    visibility
  18. The public generally has access to the following records of a tax-exempt not-for-profit organization
    • tax returns
    • articles of incorporation
    • board minutes
  19. The value of the books in a college library is
    • Not required to be included in the balance sheet of the college as a long-term asset.
    • Can be included in the footnotes
  20. For colleges and universities, the expense categories, to be in compliance with accounting reporting standards, include
    • Instructional
    • Academic support
  21. The state agency that monitors not-for-profit organizations is the
    Registry of Charitable Trusts
  22. GAGAS is _____________ in scope than GAAS
    Broader
  23. If a tax-exempt not-for-profit organization dissolves and goes out of business, it
    must distribute the net assets to similar organizations in its geographic area
  24. Oversight of the tax-exempt organizations is done primarily by
    State attorney generals
  25. SFAS 117 requires an _________________ of the nonprofit entity's finances.
    Aggregate view
  26. A budget in which each activity and the amounts of resources requires for each activity must be justified each year
    Zero-based budget
  27. The use of net assets by not-for-profit organizations is stipulated in
    SFAS 117
  28. Revenue for hospital is reported as:
    Net revenue
  29. The board of directors of a not-for-profit entity are elected by
    the members
  30. Contractual allowances include:
    • Discount to insurance companies
    • Discounts to medicare
  31. For the IRS, tax-exempt organizations need to pass
    • an internal support test
    • an external support test
  32. Net assets for a not-for-profit include classification of
    • unrestricted net assets
    • permanently restricted net assets
  33. Fair value accounting for investments in not-for-profits is stipulated by
    SFAS 124
  34. Service capacity includes
    • human resources
    • capital assets
  35. The _______________ performs the performance audits for the City and County of San Francisco
    City Services Auditor
  36. GAGAS is found
    in the yellow book
  37. The single audit is administered by
    the OMB
  38. The total package for the sing audit includes
    Financial audit, internal controls audit, program specific audit
  39. Which of the following best describes the relationships between generally accepted auditing standards (GAAS) and government auditing standards (GAS)
    Audits conducted in conformity with the yellow book may also require the auditor to conform to GAAS.
  40. Which of the following accounts used in state and local government accounting is most like the federal budgetary account :Undelivered Orders"?
    Encumbrance
  41. The comptroller General of the United States is the head of the
    Government accountability Office (GAO)
  42. Which best describes the usual flow of budgetary authority through the budgetary accounts of a federal agency?
    Appropriation, apportionment, allotment, commitment, obligation, expended appropriation

    *remember by  APPR, APPO, ALL, COM, OBL, EXTAPP
  43. Depreciation expense in a not-for-profit organization should be
    Allocated to the functions to which it relates
  44. A good reason for an NPO to adopt fund accounting even though FASB standards do not require it is that
    Restrictions have been placed on the use of certain of its assets by donors.
  45. Accounting standards for NPOs (not-for-profit) require
    Full accrual accounting
  46. The purpose of a statement of functional expenses is to
    Report on program expenses and supporting expenses
  47. Which of the following is a reason why an NPO might fail to qualify for tax-exempt status?
    Its officers are paid excessive wages
  48. A good measure of whether the NPO is spending too much on overhead, such as general and administrative expenses, is
    Percentage of total expenses spent on the program function as opposed to supporting the programs.
  49. Federal capital assets that possess educational, cultural, or natural characteristics are
    Heritage assets
  50. Federal departments have their financial audits performed by
    public accounting firms
  51. An audit of a government, conducted in accordance with generally accepted governmental auditing standards (GAGAS), includes
    • An examination of financial statements and underlying records for conformance with generally accepted accounting principles (GAAP)
    • Tests for compliance with laws and regulations
  52. The single audit concept refers to
    Audits following the Single Audit Act of 1984 and the revised OMB Circular A-133
  53. An internal control structure that is so weak that it does not reduce the risk of material noncompliance to an acceptably low level is called a
    Material weakness and reportable condition
  54. A typical objective of a performance audit is for the auditor to
    Make recommendations for improving performance
  55. An auditor would not render an opinion on a
    Performance audit
  56. The Comptroller General of the United States is the head of the
    Governmental Accountability Office
  57. The GASB "Budgeting Principle" states that an annual budget should be adopted by (for) every
    Government
  58. Which of the following might appropriately be termed an outcome indicator for a police department reports service efforts and accomplishments (SEA) indicators?
    Value of property lost due to crimes.
  59. A cost that can be identified specifically with a particular cost objective is termed a
    direct cost
  60. Which of the following systems of cost allocation is most common in governmental accounting?
    Step-down
  61. A budget in which each activity and the amounts of resources requested for each activity must be justified each year
    Zero-based budgeting
  62. A budget that is derived from the current year budget by multiplying a factor across all line-items.
    Incremental budgeting
  63. A budgeting approach popular in the 1960s that integrates various elements of the activity
    Program budgeting
  64. Responsibility for promulgating generally accepted accounting principles for nongovernmental, not-for-profit entities rests with the
    GAO (Governmental accountability Office)
  65. Statement of Financial Account Standards (SFAS) no 116 on contributions received and contributions made describes measurement and reporting rules for
    Nonexchange transactions, such as unrestricted and restricted gifts
  66. Statement of Financial Accounting Standards (SFAS) No. 117 requires the following reporting perspective for not-for-profit organizations
    Aggregate
  67. Which of the following is not a true statement about tax-exempt organizations?
    a. They must be organized to serve the charitable needs of the public at large.
    b. They must first become a not-for-profit corporation or charitable trust.
    c. They are permitted to do some political lobbying if guidelines are met.
    d. Their unrelated business income is taxed at corporate income tax rates
    They must be organized to serve the charitable needs of the public at large
  68. The income most likely to be considered unrelated business income of a human service organization that provides immunizations to children in the community is
    Rental of extra space in the building
  69. The incorporating documents that have an external focus and describe the purpose of the organization without being to restrictive are called
    Articles of incorporation
  70. A single audit would be done by
    • Only certain governmental entities that meet certain criteria
    • nonprofit entities that meet certain criteria
  71. Which of the following statements is true regarding generally accepted accounting principles (GAAP) for colleges and universities?
    The FASB has set standards for private colleges and universities
  72. Are public and private colleges and universities required to report depreciation in their financial statements?
    • Public - YES
    • Private - YES
  73. Which of the following is a typical classification of a functional expense in a college or university?
    academic Support
  74. Contractual adjustments is properly characterized as
    A deduction from revenues.
  75. The difference between the gross service revenue and the negotiated payment by third-party payors in arriving at net patient service revenue
    Contractual discount
  76. The tax exempt status for a not-for-profit organization means that
    • It is exempt from both federal and state income taxes
    • it could be exempt from state sales taxes
  77. The oversight of the not-for-profit organizations is at
    The state level by the attorney general's office
  78. The majority of the federal taxes come from
    individual taxes

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