Accounting For Public Sector and Civil Model Exit Exam1

SALALE UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE
Accounting for Public Sector and Civil Society Model Exam
1. A major difference between government and commercial accounting is that a

governmental unit should
A. Use only the cash basis of accounting.
B. Always establish and maintain complete self-balancing account for each fund.
C. Use only the modified accrual basis of accounting.
D. Not record depreciation expense in any of its funds
2. A feature of government accounting that provides for the ceiling or maximum amount an
agency can spend or incur in the performance of its functions.
A. Responsibility accounting. C. Obligation accounting.
B. Budgeting accounting. D. Fund accounting
3. Governmental funds use the:
A. Economic resources measurement focus and modified accrual basis of accounting.
B. Current financial resources measurement focus and modified accrual basis of
accounting
C. Current financial resources measurement focus and accrual basis of accounting.
D. Economic resources measurement focus and accrual basis of accounting.
4. Which of the following is NOT a purpose of external financial reporting by
governments?
A. Compare actual results with the budget.
B. External financial report should allow users to a) Assess financial condition.
C. Assess the ability of elected officials to effectively manage people.
D. Evaluate efficiency and effectiveness.
5. One of the following is odd in relation to objectives of IPSAS
A. Comparability C. Adaptability
B. Transparency D. Accountability
6. IPSASs set out all the following, except one
A. Measurement D. Presentation and disclosure
B. Recognition requirements
C. Exposure draft
7. One of the following is not a challenge of IPSAS adoption
A. Change management C. Software Acquisition
B. High Implementation Costs D. None of the above
8. IPSAS 33 deals with
A. First time adoption C. Statement of Cash flow
B. Presentation of financial D. Events after reporting date
statements
9. The IPSAS on Impairment of Non-cash Generating Assets
A. IPSAS 4 C. IPSAS 15
B. IPSAS 13 D. IPSAS 21
10. Given that the following were extracted from the books of a Public sector entity for the
year ended December 31, 2022: Capital grants $50,000,000; Revaluation reserve
$600,000; Translation reserve $900,000; Accumulated Surplus $400,000 and Public debt
charges $1,000,000. What is the value of its Net asset?
A. $52,900,000 C. $50,900,000
B. $51,900,000 D. $50,000,000
11. When the budget of a governmental unit is adopted and the estimated revenues exceed
the appropriation, the excess is
A. Debited to fund balance. C. Credited to fund balance.
B. Debited to reserve for encumbrances. D. Credited to reserve for encumbrances.
12. In government accounting, the revenue control account is increased when recording:
A. The appropriations. C. The closing of budgetary accounts.
B. The budget. D. Property taxes
13. One of the basic features in government accounting is
A. Depreciation of fixed assets is considered an overhead expense.
B. As to the basis of accounting, it is either cash or accrual basis not a combination of
both.
C. The accounting of money collected is not separate and independent from the
accounting of the use or disbursement of said money collected.
D. Budgetary and real accounts are used and estimates are recorded and accounted for.
14. Which of the following fund types uses the same measurement focus and basis of
accounting as the General Fund?
A. Enterprise. C. Pension and other employee benefit
B. Permanent. D. Internal service.
15. Governmental accounting systems of state and local governmental entities (SLGs) should
be organized and operated on which of the following bases?
A. Fiduciary fund. C. Proprietary fund.
B. Fund. D. Governmental fund.
16. Which of the following is not a governmental fund?
A. Private-purpose C. Debt service
B. General D. Special revenue
17. Legal authorization in the form of a law to make payments out of the public treasury for
specific purposes after compliance with certain conditions.
A. Budgeting. C. Obligation
B. Appropriation. D. Allotment.
18. An authorization by the legislative body in the form of laws for payments to be made
with funds of the government for specified purpose is
A. Authorization. C. Allotment.
B. Appropriation. D. Budget.
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19. In comparing internal service funds to enterprise funds, which of the following is (are)
true?
A. Internal service funds use the current financial resources measurement focus, while
enterprise funds use the economic resources measurement focus.
B. Internal service funds account for the sale of services and enterprise funds account for
the sale of goods.
C. Internal service funds use modified accrual and enterprise funds use accrual
accounting.
D. Internal service funds sell predominantly to other government departments and
enterprise funds sell predominantly to external parties.
20. An authorization from a legislative body to make payments out of the National Treasury
underspecified conditions and for specific purposes
A. Budget. C. Allotment.
B. Appropriations. D. Cash disbursement ceiling.
21. Which of the following is true regarding accounting for fixed assets of state and local
governmental units?
A. Fixed assets are to be recorded at historical cost
B. Fixed assets are to be reported and depreciated in the proprietary fund financial
statements but not in the governmental fund financial statements.
C. Fixed assets are to be reported and depreciated in the government-wide financial
statements.
D. All of the above are true
22. Users of government financial statements should be interested in information about
compliance with laws and regulations for which of the following reasons?
A. To determine if the entity has complied with donor restrictions on the use of funds.
B. To determine if the entity has complied with bond covenants.
C. To determine if the entity has complied with taxing limitations.
D. To determine all of the above.
23. The government-wide financial statements include a:
A. Statement of net position and a statement of revenues, expenditures, and changes in
fund balance.
B. Statement of net position and a statement of activities.
C. Statement of net position and a statement of changes in net position.
D. Balance sheet, an income statement, and a statement of cash flows.
24. Which of the following is an objective of financial reporting by governmental entities as
established by GASB?
A. Financial reporting should assist users in assessing whether the government provided
appropriate services to its constituents in the current year.
B. Financial reporting should assist users in assessing the management skills of the
management.
C. Financial reporting should assist users in determining if current-period revenues were
sufficient to pay for current period services.
D. Financial reporting should assist users in evaluating the cash management operations
of the governmental entity for the year.
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25. Which of the following is true regarding the government-wide financial statements?
A. The government-wide financial statements include the Statement of Net Position and
Statement of Activities.
B. The government-wide financial statements include information for governmental
activities, business-type activities, the total primary government, and component
units.
C. The government-wide financial statements are to be prepared using the economic
resources measurement focus and accrual basis of accounting.
D. All of the above are true.
26. Proprietary fund financial statements include:
A. Statement of net position; statement of revenues, expenses, and changes in net
position; and statement of cash flows.
B. Statement of net position and statement of revenues, expenditures, and changes in
fund balances.
C. Statement of net position; statement of revenues, expenditures, and changes in fund
balances; and statement of cash flows.
D. Statement of net position and statement of changes in net position.
27. Which of the following is a distinguishing characteristic of a nonbusiness organization?
A. It does not depreciate its capital assets
B. Its revenues do not exceed its expenses
C. There is an absence of ownership interests that can be sold, transferred, or redeemed
D. It does not charge fees for any of its services Answer: b
28. Which of the following activities is performed by governments but not by not-for-profit
organizations?
A. Receiving grants C. Providing services to constituents.
B. Issuing federal tax-free debt D. Preparing budgets
29. Government and nonprofit accounting focuses on which of the following?
A. Reporting to management C. Protecting investors from fraud
B. Calculating profit or loss D. Demonstrating accountability
30. A not-for-profit organization performs all of the following activities except
A. Paying dividends to shareholders.
B. Paying overtime to employees
C. Charging a fee for services provided
D. Purchasing long-lived (capital) assets
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SALALE UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

1. A major difference between government and commercial accounting is that a

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