Governmental & Not-for-Profit Accounting Flashcards
7 cards from real Certified Public Accountant 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 & Not-for-Profit Accounting flashcards as text
Under modified accrual accounting, property tax revenues are generally considered 'available' if collected within how many days after fiscal year-end?
Answer: 60 days
Under modified accrual, property tax revenues must be collected within 60 days after fiscal year-end to be considered available and recognized in the current period.
Under GASB standards, which funds must always be separately reported as major funds?
Answer: The General Fund and any fund meeting the 10% and 5% quantitative thresholds
GASB requires the General Fund to always be reported as a major fund, plus any other fund meeting both the 10% (of its fund category) and 5% (of all funds) quantitative thresholds.
A not-for-profit hospital receives a pledge of $90,000 to be paid in three equal annual installments. How should this pledge be initially recorded?
Answer: As contributions receivable at the present value of future cash flows
Unconditional multi-year pledges are recorded immediately as contribution revenue and contributions receivable at their present value, discounting future payments for the time value of money.
Under GASB, a government using the modified approach for infrastructure assets (instead of depreciation) must meet which key requirement?
Answer: The government must maintain assets at or above a documented condition level
The modified approach allows governments to expense maintenance costs rather than depreciate infrastructure, but requires periodic condition assessments and maintaining assets at a predetermined condition level.
Which of the following statements about Internal Service Funds is correct?
Answer: They primarily serve other departments within the same government
Internal Service Funds account for activities that provide goods or services to other departments or agencies of the same government on a cost-reimbursement basis.
A city receives a conditional federal grant requiring it to match 50% of federal funds before any federal money is released. How should the grant be treated upon initial award?
Answer: Record as deferred revenue or a liability until the matching condition is met
Conditional grants are not recognized as revenue until eligibility requirements are met; a matching requirement is a condition that must be satisfied before revenue recognition is appropriate.
Under FASB ASC 958, when must a not-for-profit organization recognize contributed services as revenue?
Answer: When services create or enhance a nonfinancial asset, or require specialized skills that would otherwise be purchased
NFPs recognize contributed services when they either create or enhance a nonfinancial asset or require specialized skills (such as legal, medical, or accounting) that would typically need to be purchased.