Governmental and Nonprofit Accounting Flashcards
7 cards from real Accounting Online Program practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Governmental and Nonprofit Accounting flashcards as text
Which standard-setting body establishes GAAP for state and local governments in the United States?
Answer: GASB
The Governmental Accounting Standards Board (GASB) establishes generally accepted accounting principles for state and local governments.
Which fund type is the primary operating fund used to account for most general government activities?
Answer: General Fund
The General Fund is the chief operating fund of a government, accounting for all financial resources not required to be accounted for in another fund.
What basis of accounting is used for governmental funds under GASB standards?
Answer: Modified accrual basis
Governmental funds use the modified accrual basis, recognizing revenues when measurable and available, and expenditures when the liability is incurred.
Under modified accrual accounting, revenues are recognized when they are:
Answer: Measurable and available
Modified accrual recognizes revenues when they are both measurable and available, meaning collectible within 60 days after year-end.
What does ACFR stand for in the context of government financial reporting?
Answer: Annual Comprehensive Financial Report
The Annual Comprehensive Financial Report (ACFR), formerly called CAFR, is the complete set of audited financial statements issued by state and local governments.
Which financial statement is required for voluntary health and welfare nonprofit organizations and shows expenses by both function and natural classification?
Answer: Statement of Functional Expenses
The Statement of Functional Expenses is unique to nonprofits and presents expenses categorized by both their function (program vs. support) and their nature (salaries, rent, etc.).
Under ASC 958, nonprofit organizations classify net assets into how many categories?
Answer: Two
Under ASC 958, net assets are classified into two categories: net assets with donor restrictions and net assets without donor restrictions, replacing the previous three-class system.