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 of the following is classified as a proprietary fund in government accounting?
Answer: Internal Service Fund
Internal Service Funds are proprietary funds used to account for services provided by one government department to other departments on a cost-reimbursement basis.
What is the primary purpose of a Debt Service Fund?
Answer: To account for principal and interest payments on long-term debt
Debt Service Funds account for the accumulation of resources and the payment of general long-term debt principal and interest.
Enterprise Funds are a type of which government fund category?
Answer: Proprietary fund
Enterprise Funds are proprietary funds used to account for activities financed primarily through user charges, operating similarly to private businesses.
Under GASB Statement 34, government financial reporting requires statements at which level(s)?
Answer: Both government-wide and fund levels
GASB 34 established a dual reporting model requiring both government-wide financial statements (full accrual) and fund financial statements (modified accrual for governmental funds).
Which nonprofit financial statement reports all revenues, expenses, gains, and losses, showing the change in net assets?
Answer: Statement of Activities
The Statement of Activities is the nonprofit equivalent of an income statement and reports all changes in net assets during the reporting period.
A permanently restricted endowment contribution to a nonprofit must be:
Answer: Maintained in perpetuity per the donor's stipulation
Net assets with permanent donor restrictions (endowments) must be maintained in perpetuity as the donor stipulated, with only investment income typically available for spending.
What is an encumbrance in governmental fund accounting?
Answer: A commitment of appropriated funds for a future expenditure such as a purchase order
Encumbrances represent commitments, such as purchase orders, that reserve budget authority before an actual expenditure is incurred.