CGA Public Sector & Not-for-Profit Accounting

Question 1

Which accounting standard-setter governs financial reporting for Canadian federal government entities?

Accepted Answer

PSAB

Answer

IASB

Answer

FASB

Answer

AASB

Question 2

Under public sector accounting, the modified accrual basis primarily differs from full accrual by:

Accepted Answer

Recognizing expenditures when the related liability is expected to be paid within the current period or shortly after

Answer

Recognizing revenues only when cash is received

Answer

Eliminating depreciation of capital assets entirely

Answer

Recording all long-term liabilities off-balance-sheet

Question 3

A not-for-profit organization (NPO) receives a donation restricted for building construction. Under Canadian GAAP for NPOs, which method allows this donation to be deferred until the asset is amortized?

Accepted Answer

Either the deferral method or restricted fund method

Answer

Restricted fund method only

Answer

Deferral method only

Answer

Neither — all contributions must be recognized immediately

Question 4

In fund accounting used by governments, a debt service fund is established to:

Accepted Answer

Accumulate resources for repayment of long-term debt principal and interest

Answer

Account for resources used to acquire long-lived capital assets

Answer

Account for activities of government business enterprises

Answer

Record general governmental operating revenues and expenditures

Question 5

Which financial statement is unique to public sector entities and not typically found in private sector reporting?

Accepted Answer

Statement of Remeasurement Gains and Losses

Answer

Statement of Financial Position

Answer

Statement of Cash Flows

Answer

Statement of Comprehensive Income

Question 6

An NPO uses the restricted fund method. An endowment contribution of $500,000 is received with the principal to be kept intact permanently. How should this be recorded?

Accepted Answer

As revenue in the endowment fund

Answer

As revenue in the general fund

Answer

As a liability until the restriction is lifted

Answer

As deferred revenue in the general fund

Question 7

Government business enterprises (GBEs) in Canada are required to follow which accounting standards?

Accepted Answer

IFRS as adopted in Canada

Answer

PSAB standards exclusively

Answer

Accounting Standards for Private Enterprises (ASPE)

Answer

A hybrid of PSAB and IFRS chosen by management