69 Free Test Bank for Essentials of Accounting for
Governmental and Not for Profit Organizations 12th
Edition by Copley Multiple Choice Questions
Which of the following fund types uses modified accrual
accounting?
1.

A) Enterprise

2.

B) Internal Service

3.

C) Investment Trust

4.

D) Special Revenue

Which of the following characteristics would not define an
organization as governmental?
1.

A) The power to enact and enforce a tax levy.

2.

B) The potential for unilateral dissolution by a government with the net
resources reverting to a government.


A) State and local governments

2.

B) Investor owned business


3.

C) Federal government

4.

D) Public not-for-profits

Proprietary funds use the:
1.

A) current financial resources measurement focus and modified accrual basis
of accounting

2.

B) economic resources measurement focus and accrual basis of accounting.

3.

C) economic resources measurement focus and modified accrual basis of
accounting.

B) enterprise and internal service funds only.

3.

C) enterprise, internal service, and private-purpose trust funds.

4.

D) none of the above answers are correct.

A city government collects local option sales taxes legally restricted
to pay for the construction of a new courthouse. Which fund should
account for the receipt of the sales taxes?
1.

A) Special revenue fund

2.

B) Capital projects fund


3.

C) Private-purpose trust fund

4.

D) General fund



3.

C) independent auditor’s report

4.

D) complete audited financial report

Which of the following organizations has authority to establish
accounting and financial reporting standards for the federal
government?
1.

A) Federal Accounting Standards Advisory Board.

2.

B) Office of Management and Budget.

3.

C) Governmental Accounting Standards Board.

4.

D) None of the above; no one has been granted authority to set standards for
the federal government

Which of the following would not be included in FASB Statement of

B) Statement of Cash Flows

3.

C) Statement of Net Position

4.

D) All of the above are included

Which of the following is not a fiduciary fund?
1.

A) Agency

2.

B) Permanent

3.

C) Pension trust

4.

D) Private-purpose trust

GASB Concepts Statement No. 3, Communication Methods in
General Purpose External Financial Reports that Contain Basic
Financial Statements, states that


3.

4.

C) they are measurable and can be financed by the revenues of the current
period.
D) the fund liability is incurred.

Long-term debt of a governmental unit would be reported in the:
1.

2.
3.

4.

A) government-wide financial statements and proprietary fund financial
statements.
B) government-wide financial statements only.
C) debt service funds of governmental fund financial statements and
government-wide financial statements.
D) notes to the financial statements only.

Which of the following fund types does not use modified accrual
accounting?
1.

A) Debt Service




Governmental funds include:
1.

A) Special revenue funds

2.

B) Internal service funds

3.

C) Debt service funds

4.

D) A and C

Which of the following best describes how many funds a
government should use?
1.

A) One for each revenue source

2.

B) Two at a minimum; the General Fund and one enterprise fund

3.


2.

B) Enterprise

3.

C) General

4.

D) Special revenue


Which of the following is an environmental difference between
governments and for-profit business enterprises?
1.

A) Relationship with stakeholders

2.

B) Donor restricted assets

3.

C) Fiduciary responsibilities

4.



C) GASB

4.

D) AICPA

Capitalized fixed assets are reported in which of the following fundbasis statements?
1.

A) Agency fund

2.

B) Proprietary fund

3.

C) Governmental fund

4.

D) All of the above

Notre Dame University, a private institution, has level “A” GAAP
established by the:


1.



D) Both state and local governments and federal agencies are required to
provide an MD&A.

Fiduciary funds are to use the:
1.

A) economic resources measurement focus and modified accrual basis of
accounting.

2.

B) current financial resources measurement focus and accrual basis of
accounting.

3.

C) economic resources measurement focus and accrual basis of accounting.

4.

D) none of the above, the fiduciary funds have no revenues.

The ______ Funds are used when resources are provided primarily
through the use of sales and service charges to parties external to
the government and it is the intent of the government to measure
revenues, expenses and changes in net position.
1.

A) Agency


The FASB has the authority to establish accounting and financial
reporting standards for:
1.

A) Federal government

2.

B) Private not-for-profits

3.

C) Public not-for-profits

4.

D) State and local governments

Which of the following are the governmental funds?
1.

A) General, special revenue, debt service, capital projects, private purpose.

2.

B) General, special revenue, debt service, capital projects, permanent.

3.



A) economic resources measurement focus and accrual basis of accounting.

2.

B) current financial resources measurement focus and accrual basis of
accounting.

3.

C) economic resources measurement focus and modified accrual basis of
accounting.

4.

D) current financial resources measurement focus and modified accrual basis
of accounting

Which of the following is true regarding fund classifications?
1.

A) Governmental funds include the General, special revenue, debt service,
capital projects, and permanent.

2.

B) Proprietary funds include enterprise, internal service, and private-purpose.

3.


2.

B) Expendable trust.

3.

C) Private-purpose trust.

4.

D) Investment trust.

The fund basis statements for governmental funds are presented
using the


1.

A) Economic Resources Measurement focus and the Accrual Basis of
Accounting.

2.

B) Current Financial Resources Measurement focus and the Modified Accrual
Basis of Accounting.

3.

C) Current Financial Resources Measurement focus and the Accrual Basis of
Accounting.


B) Private not-for-profits

3.

C) Federal government

4.

D) None of the above

Government-wide statements use the:
1.

A) current financial resources measurement focus and accrual basis of
accounting.

2.

B) economic resources measurement focus and modified accrual basis of
accounting.

3.

C) economic resources measurement focus and accrual basis of accounting.

4.

D) none of the above.



C) governmental, fiduciary, and restricted

4.

D) governmental, proprietary, and fiduciary

Which of the following use current financial resources measurement
focus?
1.

A) Fiduciary fund statements

2.

B) Governmental fund statements

3.

C) Proprietary fund statements

4.

D) Internal Service fund statements

Under GASB Statement 34, modified accrual accounting would be
found in the:
1.

A) government-wide financial statements only.

C) Financial reporting should reveal whether financial systems and controls
are adequate.

4.

D) Financial reporting should demonstrate accountability with regard to raising
and expending money.

The ______ Fund accounts for all resources other than those
required to be accounted for in other funds.
1.

A) Agency

2.

B) Enterprise

3.

C) General

4.

D) Special revenue

The GASB sets accounting standards for all of the following
except:
1.


D) Both A & B are required

Governmental funds do not include:
1.

A) Special revenue funds

2.

B) Agency funds

3.

C) Debt service funds

4.

D) The General fund

Which of the following funds is not a Fiduciary Fund?
1.

A) Investment Trust Fund

2.

B) Private Purpose Trust Fund

3.



B) Internal Service Fund

3.

C) Agency Fund

4.

D) None of the above

A government may have __________________ General Fund(s).
1.

A) Only one.


2.

B) As many as needed to fulfill legal obligations.

3.

C) A varying number, depending on the annual needs of the government.

4.

D) None of the above.

Which of the following funds is considered a Fiduciary Fund?

C) Private-purpose trust fund

4.

D) General fund

Level “A” GAAP for The University of Virginia, a public institution,
would be established by the:
1.

A) Financial Accounting Standards Board.

2.

B) Governmental Accounting Standards Board.

3.

C) American Institute of Certified Public Accountants.

4.

D) National Association of College and University Business Officers.

What are Enterprise funds used for?
1.

A) To account for pension and employee benefit funds for which the
governmental unit is the trustee.


only.

4.

D) government-wide and all fund financial statements

A permanent fund classified under governmental funds…
1.

A) Accounts for most of the basic services provided by the governmental unit.

2.

B) Accounts for financial resources intended for major capital projects

3.

C) Accounts for services provided by one department of a government to
another

4.

D) Accounts for resources that are legally restricted so only earnings, not
principal, may be expended, and for purposes to benefit the government and
its citizenry.

A city government makes its semiannual payment of interest on
revenue bonds issued to pay for the construction of additional
public transit stations. Which fund would account for the payment?
1.


4.

D) Debt service fund

The GASB is under the oversight of:
1.

A) GAO.

2.

B) FASAB.

3.

C) FAF.

4.

D) FASB.

Under GASB Statement 34, capital assets:
1.

A) must be reported in government-wide statements but are not reported in
any of the fund financial statements.

2.




Which of the following is not an objective of federal financial
reporting?
1.

A) Budgetary Integrity

2.

B) Increase Taxpayer Awareness

3.

C) Stewardship

4.

D) Operating Performance

What type of fund is used when resources are provided mainly
through business-like transactions to parties external to the
government?
1.

A) Internal Service Funds

2.

B) Capital Projects Funds