Exam 2 Advanced Financial Reporting

Question 1

Categories of Private NFPs

Answer 1

Voluntary Health and Welfare Organizations, colleges/universities, hospitals and other health care organizations, other private NFP.

Question 2

Voluntary Health and welfare Organizations- Examples

Answer 2

American Heart Association, Salvation Army, YMCA

Question 3

Hospitals and other health care organizations-Examples

Answer 3

St. Jude Children’s

Question 4

Other Private NFP Organization-Example

Answer 4

Beta Alpha Psi

Question 5

Statement of activities layout

Answer 5

Revenues, Expenses, Changes in net assets, Change in net assets. Net assets Ending

Question 6

NFP annual Reporting

Answer 6

Form 990

Question 7

NFP Recognizes 1,120,000 in contributions

Answer 7

Debit Cash
Credit - Contribution Rev (unrestricted)

Question 8

Received a gift of supplies with a FMV of 15,000. No restrictions.

Answer 8

Debit Supplies
Credit - Contribution Rev (unrestricted)

Question 9

Woodward CPA decided to audit a company for no charge.

Answer 9

Debit - Professional Services
Credit - Revenues from contributed Services.

Question 10

Restricted Cash Gift

Answer 10

Debit Restricted Cash
Credit Contribution Revenue Restricted

Question 11

Queens University Spent 5,000 in cash on program expenses that satisfies donor restriction

Answer 11

Debit Net assets released from restriction restricted
Credit Net assets released from restriction unrestricted
Debit Program Expenses
Credit Restricted Cash

Question 12

Unconditional Promise - 1,000,000 5% is expected to not be honored

Answer 12

Debit Contribution receivable
Credit Allowance for uncollectable contribution
Credit Contribution Revenue - Unrestricted

Question 13

TVM Calculations - JE

Answer 13

Debit - Contribution Receivable
Credit Discount on contribution receivable
Credit Contribution Revenue - Restricted

To record int it’s the contribution revenue * Discount rate.
Debit Discount on contribution receivable credit
Credit Contribution revenue - restricted

Question 14

JE for Endowment Gift

Answer 14

Debit Restricted Cash
Credit Contribution revenue - Restricted
2. Debit Investment in securities
Credit restricted cash

Question 15

Charitable Annuity- Annuity Trust (fixed payment rate)

Answer 15

Debit Restricted Cash
Credit Annuity payable
Credit CR-Restricted

Question 16

Life income agreement. (person retains entire investment income until they pass)

Answer 16

Debit Restricted Cash
Credit Contribution Revenue - Restricted

Record Income
Debit Restricted Cash
Debit or Credit Investment
Credit Life Income Payable

Question 17

(Recipient Accounting) Contributions received on behalf of others Not Financially interrelated and Without Variance Power

Answer 17

Debit Assets
Credit Refundable Advance (Liability)

Question 18

(Recipient Accounting) Contributions received on behalf of others Not Financially interrelated and with Variance Power

Answer 18

Debit Assets
Credit Contribution Revenue

Question 19

Sources of GAAP for state and Local Government

Answer 19

GASB
Governmental Accounting Standards Board

Question 20

Component Unit - Blended

Answer 20

Account balances are not separately distinguishable. Normally when the city owns the dead, or issues bonds, or controls the board

Question 21

Component Unit-Discretely

Answer 21

This is when account balances are separately stated. Normally when the city isn’t involved with the board and they are able to issue debt that the city isn’t a part of.

Question 22

Categories of Government Activities

Answer 22

Governmental, Proprietary, Fiduciary

Question 23

Governmental activities Examples

Answer 23

Health and Safety, Education, Economic services, Culture and Recreation, and legislative services

Question 24

Proprietary Activities

Answer 24

Similar to Activities of a Business.

Question 25

Proprietary Activities examples

Answer 25

Transportation, Utilities, Parking, and Community Rec Centers.

Question 26

Fiduciary Activities

Answer 26

Government holds resources in a custodial capacity for entities or individuals outside the governmental unit

Question 27

Fiduciary Activities Examples

Answer 27

People - Pensions, Investment Pools, Individual 529 plans State - Sales Taxes Collected by the county, Special Assessments on specific property owners

Question 28

Fund Types

Answer 28

Governmental, Fiduciary, Proprietary

Question 29

Governmental Funds

Answer 29

General, Special Revenue, Capital Projects, Debt Service, Permanent

Question 30

General Fund

Answer 30

Basic services Provided by a Government Ex. Salaries to employees, Public Safety

Question 31

Special Revenue Fund

Answer 31

Account for specified activities that benefit the public. Resources are used for the particular operations specified but the revenues. Ex. City receiving grant from the federal government for a meal delivery program for senior citizens

Question 32

Capital Projects fund

Answer 32

Construction/acquisition of major capital assets. Mainly comes from bond issuance. Ex. new sewer lines, roads,

Question 33

Debt Service Fund

Answer 33

No LT Liabilities but this is where they pay the bonds back.

Question 34

Permanent Funds

Answer 34

Basically, like an endowment. The principal remains intact. Key word Fund Principal must be maintained

Question 35

Proprietary Funds

Answer 35

Enterprise Funds, Internal Service Funds

Question 36

Enterprise Funds

Answer 36

Account for business-type activities for the public, ongoing and involving a fee. Ex. Utilities.

Question 37

Internal Service Funds

Answer 37

Account for central services provided to other governmental units on a cost-reimbursement basis Ex. Accounts for fuel services provided to other funds

Question 38

Fiduciary Funds

Answer 38

Pension Benefit Trust, Investment Trust, Private Purpose, Custodial.

Question 39

Pension Benefit Trust

Answer 39

Account for resources held in trust for individuals enrolled in pension plans or other employee benefit plans Ex. anything that looks like a pension

Question 40

Investment Trust Funds

Answer 40

Account for the net assets of investors outside the governmental reporting entity, typically other governments, held in government investment pools

Question 41

Private Purpose Trust Funds

Answer 41

Account for the activities of other trust agreements that benefit individuals, private organizations, or other governments

Question 42

Custodial Funds

Answer 42

Account for resources collected for, and remitted to Individuals, Private organizations, and Other governments Key work is "Remitted"

Question 43

Accounting for Governmental Funds

Answer 43

Only ST assets/liabilities, Modified Accrual Accounting (Measurable and available normally within 60 days of year end)

Question 44

Governmental Fund F/S

Answer 44

Statement of revenues, Expenditures, and changes in fund balances, B/S, Budgetary comparison

Question 45

Proprietary Fund Accounting

Answer 45

Full Accrual Accounting

Question 46

Proprietary Fund F/S

Answer 46

Statement of Net Position, Statement of revenues, expenditures and changes in net position, and Statement of Cash Flows

Question 47

Fiduciary Fund Accounting

Answer 47

Full Accrual Accounting

Question 48

Fiduciary Fund F/S

Answer 48

Statement of Net Position (B/S), Statement of changes in fiduciary net position(P&L)