Final

A private not-for-profit college follows whose standards?

A) FASAB
B) GASB
C) FASB
D) AICPA audit and accounting guide
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Terms in this set (15)
A private not-for-profit college follows whose standards?

A) FASAB
B) GASB
C) FASB
D) AICPA audit and accounting guide
FASB
Private colleges are required to report residual equity in the following categories:

A) Unrestricted and Restricted.
B) Net Position with Donor Restrictions, Net Position without Donor Restriction.
C) Unrestricted Net Position, Restricted Net Position, and Net Investment in Capital Assets.
D) Net Assets with Donor Restrictions, Net Assets without Donor Restriction.
Net Assets with Donor Restrictions, Net Assets without Donor Restriction.
The categories of Net Position for a state university are classified within which of the following categories?

A) Non-Spendable Net Position and Spendable Net Position.
B) Committed Net Position, Assigned Net Position and Unassigned Net Position.
C) Restricted Fund balance, Committed Fund balance, Assigned Fund Balance, and Nonspendable Fund Balance.
D) Net Investment in Capital Assets, Restricted Net Position and Unrestricted Net Position.
Net Investment in Capital Assets, Restricted Net Position and Unrestricted Net Position.
Which of the following is incorrect with respect to the Statement of Cash Flows for a public college?

A) A reconciliation is required, reconciling operating income in the Statement of Revenues, Expenses, and Changes to the cash flows provided (used) by operating activities.
B) The statement is in the same format required for state and local governmental enterprise funds.
C) The direct method must be used.
D) Cash purchases of capital assets are reported as outflows in the investing activities section.
Cash purchases of capital assets are reported as outflows in the investing activities section.
With respect to public colleges and universities, state appropriations for operating purposes are shown as:

A) Non-operating revenue.
B) Operating revenue.
C) Non-expendable endowments.
D) None of the choices are correct.
Non-operating revenue.
Sam Smith died, leaving a will that provided that $1,000,000 be transferred to a private not-for-profit college. The college is to invest
the funds for 10 years and give $40,000 each year to the granddaughter. At the end of the 10 years, the $1,000,000 can be used for any purpose desired by the college. Which of the following is true?

A) The college would not record revenue for 10 years; then a revenue would be recorded, increasing unrestricted net assets.
B) The college would record revenue in an amount equal to the $1,000,000 less the present value of the 10 payments to the
granddaughter.
C) The college would record revenue in an amount equal to the present value of the 10 payments to the granddaughter.
D) The college would record revenue in the amount of $1,000,000, increasing temporarily restricted net assets.
The college would record revenue in an amount equal to the $1,000,000 less the present value of the 10 payments to the granddaughter.
The AICPA Audit and Accounting Guide: Health Care Organizations applies to:

A) Private not-for-profit health care organizations.
B) Governmentally owned health care organizations.
C) Investor-owned health care organizations.
D) All of the choices are correct.
All of the choices are correct.
Not-for-profit health care organizations that are government-owned follow which standards:

A) GASB
B) FASB, including standards specifically for not-for-profits
C) FASB, excluding standards specifically for not-for-profits
D) None of the choices are correct
GASB
Not-for-profit health care entities are distinguished from voluntary health and welfare organizations in the following manner:

A) Health care organizations use accrual accounting whereas voluntary health and welfare organizations do not.
B) Health care organizations are owned by governments while voluntary health and welfare organizations are not.
C) Health care organizations are considered to be primarily business-oriented (revenues are generated by services provided) whereas voluntary health and welfare organizations raise a significant portion of their money from voluntary contributions.
D) Health care organizations do not provide services to individuals who are unable to pay.
Health care organizations are considered to be primarily business-oriented (revenues are generated by services provided) whereas voluntary health and welfare organizations raise a significant portion of their money from voluntary contributions.
A donor pledged $100,000 to a private not-for-profit hospital in 2019 to purchase imaging equipment. The equipment was purchased
in 2020 and the donor transferred the funds to the hospital in 2020. In which year would the revenue be recognized?

A) 2019
B) 2020
C) Half in 2019 and half in 2020
D) None of the choices are correct; the hospital would only recognize revenue when the amounts had been expended according to the donor's wishes.
2019
Government Auditing Standards are issued by: A) Government Accountability Office. B) Governmental Accounting Standards Board. C) Federal Accounting Standards Advisory Board. D) Government Accounting Oversight Committee.Government Accountability Office.The term "opinion unit" refers to which of the following: A) A level of reporting of a government that requires a separate materiality level. B) A state or local government together with its component units. C) A division of a CPA firm. D) One of the four statements required in the second paragraph of an unqualified audit opinion.A level of reporting of a government that requires a separate materiality level.What is the principal advantage of having 501(c) (3) status to an organization that receives substantial support from outside contributors? A) The organization does not have to pay state sales taxes on purchases. B) Donors to the organization may deduct their contributions as charitable donations. C) The organization does not have to pay federal income tax. D) All of the choices are correct.Donors to the organization may deduct their contributions as charitable donations.Which of the following is not a difference between private sector auditing and governmental auditing? A) Governmental audits require auditor knowledge of government accounting and auditing. B) Testing of compliance with laws and regulations. C) The public availability of audit reports. D) Governmental audits do not have to follow AICPA (i.e. GAS) standards.Governmental audits do not have to follow AICPA (i.e. GAS) standards.Which of the following is not true regarding the Single Audit Act and its amendments? A) The act is intended to provide assurance to the federal government that federal funds are protected through a system of internal controls and sound financial management practices. B) Government Audit Standards do not apply to audits conducted to satisfy the requirements of the Single Audit Act as well as other governmental audits. C) Major programs selected for audit must equal 50 percent or more of federal expenditures, unless the organization is deemed to be low risk. D) Governmental entities with expenditures of federal funds in excess of $500,000 must have a single audit, if more than one program exists.Government Audit Standards do not apply to audits conducted to satisfy the requirements of the Single Audit Act as well as other governmental audits.