Final Exam: Accounting For Governmental And Nonprofit Organizations
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The City Council of Simpson City voted to establish an internal service fund to account for the citys printing services. In order for the new fund to begin operations, the city transferred $600,000 cash from itsGeneral fund to the newly created internal service fund.
1) The appropriate entry in the general fund to account for this transfer is a credit to cash for $600,000 and a debit for $600,000 to..
- Due from internal service fund.
- Nonreciprocal transfer-out.
- Investment in internal service fund.
2) The appropriate entry in the internal service fund is a debit to cash for $600,000 and a credit for $600,000 to
- Due to general fund.
- Investment provided by the general fund.
3) Listed below is terminology relating to audits of governmental and not-for-profit organizations:
- Attestation engagement for compliance
- Generally accepted auditing standards
- Opinion units
- Generally accepted government auditing standards
- Non-audit work
- Questioned Cost
- Material Weakness
For the seven definitions listed here, indicate the key term from the list above that best matches it. To do that, place the appropriate letter next to the numbers that are listed next to the definitions.
_____3. Standards prescribed by the AICPA to provide guidance for CPAs to plan, conduct, and report on audits.
Associated With An Activity
63. The financial reporting entity is composed of a) The primary government. b) The primarygovernment and all legally separate governments for which the primary government is financialaccountable. c) The primary government and all legally separate organizations for which the primarygovernment is fmancially accountable.
d) The primary government, all legally separate organizations for which the primary government isfuiancially accountable and any organizations whose omission would cause the primary governmentsfinancial statements to be misleading or incomplete.
Which ofthe following is necessary for a governmental entity to be considered fiscally independent? a) Itmust be able to hire its own management. b) Itmust be able to issue bonds that are tax-exempt. c)Itmust not be subsidized by another governmental entity. d) Itmust be able to levy taxes and/or setrates for its services.
The COlmty Commission appoints a voting majority ofthe members ofthe Board ofa particularorganization. The County Commission cannot impose its will upon the organization. There is no potentialfor the organization to provide any fmancial benefit to the County nor is there any potential for theorganization to impose any fmancial burden on the county. The organization is an example of8 a) Primary government.
Test Bank For Government And Not For Profit Accounting Concepts And Practices 6th Edition By Michael H Granof
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Text Includes New Accounting Standards
Keeping an accounting text up-to-date can be challenging because accountingstandards-setters are invariably workingonnewstandardswhilethetextisbeingwritten.Thiseditiontakesaccountofstandardsissuedbythe GovernmentalAccountingStandardsBoard,FinancialAccountingStandardsBoard,andFederal AccountingStandardsAdvisoryBoardthroughJune30,2020andevenreferstostatementsinprogresswhile the text was being written. In particular,a discussion of GASB proposed changes to the governmental fund reporting modelis found beginning on page 5-33.
D Debit Fixed Assets $90000 Credit Other Financing Sources $90000
30. Star City leased a bulldozer for use in activities accounted for in the General Fund. The City paid$30,000 and agreed to pay $30,000 per year for 3 years. The bulldozer has a useful life ofsix years. Thelease qualified as a capital lease. Assuming that the city maintains is books and records in a manner thatfacilitates the preparation ofthe fund financial statements, the appropriate entry in the General Fund atthe date ofacquisition would be a) Debit Expenditures $120,000 Credit Cash $30,000 and OtherFinancing Sources $90,000. b) Debit Expenditures $30,000 and Prepaid Lease $90,000 Credit Cash$30,000 and Other
d) Economic defeasance.
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Why Do Nonprofits Need To Classify Revenue Using Nonprofit Accounting Software
To properly track revenue and expenses separately, you will need to setup a fund accounting system and a specific code for these transactions. This type of system provides organizations with a method to measure how they are meeting their goals.
Each nonprofit has its own set of programs, administrative and fundraising activities known as functional accounting. Separate funds are established for these entities to track how revenue and expenses are spent.
This answers why this type of revenue was received and the type of expense incurred. It classifies the type of revenue and expense of each transaction. It is standard for all accounting and it is a detailed list of the nature of each revenue grants, program services, contributions and fundraising events and expenses, such as salaries, payroll taxes, rent, professional services, etc.
FastFund Accounting provides true fund accounting and functional accounting methods, ensuring proper compliance and accountability to funding sources.
Coverage Of Other Types Of Entities
Although most of this text is devoted to state and localgovernment accounting, we provideextensivecoverageoftheuniqueaspectsofaccountingandfinancialreportingforthefederalgovernment andnonprofitentities.InChapter12,wecitespecificreferencestothegovernments StandardGeneral Ledger. Exploring thecitations included in this chapter will give students greater insight intofederalgovernmentfinances ourFederalFinancialReportinginPracticeprovidesanaccountingperspectiveon the growth of the federal deficit.
We provideextensivecoverageofnonprofit organizations,aswellasentitieswhichcantake theformofgovernmentsornonprofitsinourcoverageofhealthcareentitiesandcollegesanduniversities .Thesechapters provide illustrations using real examples of governmental andnonprofit organizations.Standardsapplicabletononprofitorganizationsareup-to-dateinthetextbookdiscussion and illustrations,includingFASBASU2018-08whichclarifiesaccountingforcontributionsreceivedandcontributions made.
Chapter 16 is comprehensivein its coverage of auditing the wide range of governmental and nonprofit organizations covered throughout the text.Illustrations in this chapter also use real examples of audit reports andfindings.
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Actual Financial Statements Analyzed
A numberofstateandlocalgovernmentshaverecentlyexperiencedfiscalstressasevidencedbybankruptcyfilingsandunderfundedpensionplans.Theauthorsbelievethataccountingstudentsneedtobefamiliarnotonly withtherequirementsoffinancialreportingbutalsohowtointerpretthefinancialstatementsandrelatednotes. Therefore,ourchapteronfinancialstatementanalysisincludesadiscussionoftheprinciplesof financialstatementanalysis,andissupplementedwithourownanalysisofarealgovernment.Asabasisfor analyzingthefinancialpositionofagovernment,weusedindicatorsandnormsdevelopedbyprivaterating andpublicoversightagencies.Ourobjectivehereistoprovidetheinquisitivestudentwithsufficientdatatodo it yourself.
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a. The similarities of accounting for profit-seeking and G& amp NP organizations include:
b. Among the unique aspects of G& amp NP organization accounting are:
a. A fund of a government organization is an independent fiscal and accounting entity. Each fund has a separate self-balancing set of accounts in which are recorded the resources segregated for specific purposes, the related liabilities and residual equity , and the changes therein. Financial statements typically must be presented to report the financial position and operating activities of a fund of a government.
c. No, the creation of a fund does not constitute authority to spend or obligate its resources. In most not-for-profit organizations, particularly governments, authority to spend or obligate fund resources is conferred only upon an appropriation being made by the legislative body or governing board.
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A Picture Is Worth A Thousand Numbers
Not surprisingly, many nonprofit board members do not fully understand financial statementsdespite the fact that understanding those statements is key to good governance.
Each year, hundreds of nonprofit organizations are victimized by employee thefts.
About Operating Reserves” – What are they and why have them?
Ebooks Solution Manuals And Test Banks For Text Books Essay
Test BankAdvanced Accounting 1st edition by Bline 2004 Solution ManualAdvanced Accounting 1st edition by Bline 2004 Test BankAdvanced Accounting by Beams 10 Solutions ManualAdvanced Accounting by Beams, Anthony, Bettinghaus and Smith 11 Solution ManualAdvanced Accounting by Beams, Anthony, Bettinghaus and Smith 11 Test BankAdvanced Accounting by Fischer 10 Solution ManualAdvanced Accounting by Hoyle, Schaefer, and Doupnik 10 Solution ManualAdvanced Accounting by Hoyle, Schaefer, and
Words 19224 – Pages 77
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Nonprofit Accounting Software: Guide To Demonstrating Accountability
Nonprofits and government agencies need nonprofit accounting software to demonstrate accountability and compliance. Lets take a deep dive into what you need to know in choosing the most compliant software.
A compliant nonprofit accounting software system tracks revenue to a designated purpose and prevents misuse of donations.
If a nonprofit wants to be compliant with GAAP and FASB 116/117, all of their funds must be grouped into two categories of net assets: without donor restrictions and net assets with donor restrictions, which replace the three former categories of unrestricted, temporarily restricted and permanently restricted net assets. To be GAAP-compliant, nonprofits only need two funds to report on the breakdown of net assets on IRS form 990.
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- government and not for profit accounting
- ACC410 410 – Spring 2013
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Intermediate Accounting 2 Test Bank Essay
Intermediate Accounting Kieso 15th Edition Test BankClick here to download the solutions manual / test bank INSTANTLY!!!http://www.solutionsmanualtestbanks.com/2013/05/intermediate-accounting-kieso-15th-edition-test-bank.htmlIntermediateIntermediateIntermediateIntermediateAccountingAccountingAccountingAccountingKiesoKiesoKiesoKieso15th Edition Test Bank15th Edition Test BankWeygandt Warfield 15th Edition Test BankWeygandt Warfield 15th Edition Test Bank
Words 8328 – Pages 34
Granof & Khumawala Government And Not
Continuing ProblemThe solutions to the continuing problems are based on the CAFR for the City of Austin, Texas, for the year-ended September 30, 2008. 1. 2. The three main sections of the CAFR are the introductory section, the financial section and the statistical section. Introductory section a. The city was awarded the GFOA Certificate of Achievement in year 2007. This indicates that the report of the previous year met the GFOAs standards of accounting and reporting. The City management believes that this 2008 CAFR conforms to the Certificate of Achievement program requirements, and will be submitting it to the GFOA for their review. Key topics addressed in the letter of transmittal include: Overview of City government, economic conditions and outlook Major initiatives and achievements, including: – Economic growth and planning initiatives – Environment and Quality of Life – Economic development and transportation projects – Utility projects and Initiatives – Status of city services Other, including: – Financial policies – Internal control and budgetary control – Cash management – Risk management – Pension Certificate of achievement Acknowledgements
Financial section a. Yes. The city received an unqualified audit opinion .
The city has only one major governmental fund the general fund: The fund structure does not conform to the citys organizational structure .
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D Debit Supplies ~ventory $300000 Credit Cash $300000
Shoshone County uses the consumption method to account for supplies. At the beginning of the yearthe City had no supplies on hand. During the year the City purchased $600,000 of supplies for use byactivities accounted for in the General Fund. The City used $400,000 of those supplies during the year.At fiscal year-end, the appropriate account balances on the General Fund fmancial statements would bea) . Expenditures $600,000 Supplies Inventory $200,000. b) Expenditures $600,000 Supplies Inventory$0. c) Expenditures $400,000 Supplies Inventory $200,000. d) Expenditures $400,000 SuppliesInventory $0. 29.
Pocahontas School District, an independent public school district, financed the acquisition of a newschool bus by signing a note for $90,000 plus interest on the unpaid balance at 6%. Annual principalpayments of$30,000, plus interest, are due each July I. Assuming that the District maintains its booksand records in a manner that facilitates the preparation ofthe government-wide fmancial statements,the appropriate entry at the date ofacquisition is
$ 135 200 561 515 970
The unrestricted net assets those which can be used to meet normal operating expenditures appear rather small. Indeed, were it not for the addition of the net investment in capital assets they would be negative. Moreover, the unrestricted general fund owes $205 an amount not shown on the consolidated statement of net assets to other funds. Thus, it appears that the town is borrowing from restricted funds to meet its operating costs. The largest fund balance, that of the permanent endowment fund, accounts for nearly half of the fund balances reported. By the very nature of a permanent fund, only the interest, not the principal, is available for expenditures. Consolidated, government-wide, statements of net assets usually do not offer enough detail to allow the user to distinguish between restricted and unrestricted resources. Hence, there is also a need for individual fund statements.
Cash 400,000 Operating transfer-in from the general fund 400,000 To record the transfer of funds from the general fund Investments 400,000 Cash 400,000 To invest cash transferred from the general fund
Granof & Khumawala, Government and Not-for-Profit Accounting 3. It could be argued that fund accounting is no less applicable to businesses than to not-for-profits. Most businesses, of course, do not establish funds per se, but they do maintain other control mechanisms to assure that they can account for their restricted resources.
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Expenditure For Building Cash To Record Construction Of Building
The district would also have to keep a record of the $25 asset that it created. 4. General fund $ 70 $ 63 7
Operating expenditures Cash Accounts payable To record operating expenditures 5. General fund
Transfer to debt service fund Cash To record transfer to debt service fund
$ 12 $ 12
Granof & Khumawala, Government and Not-for-Profit Accounting Debt service fund Cash Transfer from general fund To record transfer from general fund 6. Debt service fund $ 2 6 $ 8 $ 12 $ 12
Accounting For Governmental & Not
Financial Accounting means to analyze, summarize, and record financial transactions as well as to show an accurate picture of financial affairs of the company. This quiz has been developed to test your knowledge of Financial Accounting Concepts for Non-Governmental and Not For Profit Entities. So, let’s try out the quiz. All the best!
- Like other governmental funds, proprietary funds have no emphasis on income measurement.
- A.& nbsp
With not-for- profit ‘products’, there is typically a weaker unique selling proposition
In the not-for-profit environment, it may be necessary to develop a campaign to drive behaviour in all targets rather than a specific audience
The mission statement of non-profit organizations usually revolve around being the best in a particular sector.
Price has different connotations in not-for-profit situations
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Highway Department Special Revenue Fund
Debt that is issued by one entity but backed by the promise ofanother entity to make up any debtselVice deficiency is a) Committed debt. b) Overlapping debt. c) Conduit debt. d) Moral obligation debt.
The work ofbond rating agencies is important because a) They insure that all principal and interestpayments on bonds issued will be made. h) The rating they assign proves the quality ofa particular debtinstrument. c) They affect the debt’s marketability and hence its interest rate. d) . Bonds cannot beissued without them. MULTIPLE CHOICE
Which ofthe following is not a proprietary fund? a) City Water Enterprise Fund. b) City Motor PoolInternal Service Fund.c) City Hall Capital Project Fund. d) None ofthe above. They are all proprietaryfunds.
Which ofthe following is a valid reason for governmental entities to engage in business-type activities?a) The entity does not want control over the activity. b) The activity competes with general governmentactivities. c) The entity does not want to subsidize the activity. d) The entity can provide the servicesmore cheaply or efficiently than can a private fmn.
Which ofthe following is a valid argument for separate accounting principles for proprietary activities? .a) Two separate measurement focuses and bases for accounting within the same set of