Depreciation expense in a not-for-profit organization should be
Allocated to the functions to which it relates
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.
Accounting standards for NPOs (not-for-profit) require
Full accrual accounting
The purpose of a statement of functional expenses is to
Report on program expenses and supporting expenses
Which of the following is a reason why an NPO might fail to qualify for tax-exempt status?
Its officers are paid excessive wages
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.
Federal capital assets that possess educational, cultural, or natural characteristics are
Federal departments have their financial audits performed by
public accounting firms
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
The single audit concept refers to
Audits following the Single Audit Act of 1984 and the revised OMB Circular A-133
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
A typical objective of a performance audit is for the auditor to
Make recommendations for improving performance
An auditor would not render an opinion on a
The Comptroller General of the United States is the head of the
Governmental Accountability Office
The GASB "Budgeting Principle" states that an annual budget should be adopted by (for) every
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.
A cost that can be identified specifically with a particular cost objective is termed a
Which of the following systems of cost allocation is most common in governmental accounting?
A budget in which each activity and the amounts of resources requested for each activity must be justified each year
A budget that is derived from the current year budget by multiplying a factor across all line-items.
A budgeting approach popular in the 1960s that integrates various elements of the activity
Responsibility for promulgating generally accepted accounting principles for nongovernmental, not-for-profit entities rests with the
GAO (Governmental accountability Office)
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
Statement of Financial Accounting Standards (SFAS) No. 117 requires the following reporting perspective for not-for-profit organizations
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
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
The incorporating documents that have an external focus and describe the purpose of the organization without being to restrictive are called
Articles of incorporation
A single audit would be done by
Only certain governmental entities that meet certain criteria
nonprofit entities that meet certain criteria
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
Are public and private colleges and universities required to report depreciation in their financial statements?
Public - YES
Private - YES
Which of the following is a typical classification of a functional expense in a college or university?
Contractual adjustments is properly characterized as
A deduction from revenues.
The difference between the gross service revenue and the negotiated payment by third-party payors in arriving at net patient service revenue
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
The oversight of the not-for-profit organizations is at