Public Sector Accounting Exam Materials
Course Introduction
Public Sector Accounting explores the principles, standards, and procedures used in accounting for governmental and not-for-profit entities. The course covers topics such as budgetary control, fund accounting, financial reporting, auditing, and regulatory frameworks specific to the public sector. Students will learn how government financial information is recorded, managed, and reported, with an emphasis on transparency, stewardship, and the unique accountability requirements of public funds. Practical case studies and contemporary issues in the public sector are also examined to provide a comprehensive understanding of the field.
Recommended Textbook
Essentials of Accounting for Governmental and Not for Profit 12th Edition by Copley
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14 Chapters
1794 Verified Questions
1794 Flashcards
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Page 2
Chapter 1: Introduction to Accounting and Financial
Reporting for Governmental and Not-For-Profit Organizations
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132 Verified Questions
132 Flashcards
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Sample Questions
Q1) Governmental funds do not include:
A) Special revenue funds
B) Agency funds
C) Debt service funds
D) The General fund
Answer: B
Q2) The only objective of the Governmental Accounting Standards Board is to help users determine compliance with finance-related laws,rules,and regulations.
A)True
B)False
Answer: False
Q3) The Governmental Accounting Standards Board sets financial reporting standards for all units of government: federal,state,and local.
A)True
B)False
Answer: False
Page 3
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Chapter 2: Overview of Financial Reporting for State and
Local Governments
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136 Verified Questions
136 Flashcards
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Sample Questions
Q1) Which of the following is one of the criteria to determine if a governmental fund is considered to be a major fund?
A) Total assets, liabilities, revenues or expenditures of the individual governmental fund constitutes 10 percent of the governmental funds category.
B) Total assets, liabilities, revenues or expenditures/expenses are 5 percent of the total of the governmental and enterprise category. Other funds may be designated major funds at the discretion of management.
C) Both A and B are required
D) Either A or B will qualify a fund to be a major fund
Answer: C
Q2) The Governmental Accounting Standards Board considers the financial reporting entity to include the primary government,but not its component units.
A)True
B)False
Answer: False
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Chapter 3: Modified Accrual Accounting: Including the Role of
Fund Balances and Budgetary Authority
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141 Verified Questions
141 Flashcards
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Sample Questions
Q1) What would be the total Restricted fund balance?
A) $ 61,000
B) $150,000
C) $200,000
D) $375,000
Answer: A
Q2) Assume estimated revenues exceed appropriations. When the budget for the General Fund is recorded,the journal entry will include:
A) a credit to Budgetary Fund Balance.
B) a credit to Estimated Revenues Control.
C) a debit to Appropriations Control.
D) a credit to Budgetary Fund Balance -- Reserve for Encumbrances.
Answer: A
Q3) The budgetary account used to record budgeted revenues is called "Estimated Revenues Control."
A)True
B)False
Answer: True
Page 5
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Chapter 4: Accounting for the General and Special Revenue Funds
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124 Verified Questions
124 Flashcards
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Sample Questions
Q1) GASB requires which of the following to be reported separately after other financing sources and uses in the Statement of Revenues,Expenditures,and Changes in Fund Balance?
A) Special items.
B) Extraordinary items.
C) Interfund transfers.
D) A and B
Q2) The General Fund of the City of Lexington approved a tax levy for the calendar year 2015 in the amount of $2,000,000. Of that amount,$30,000 is expected to be uncollectible. During 2015,$1,750,000 was collected. During 2016,$100,000 was collected during the first 30 days,$50,000 was collected during days 31-60,and $70,000 was collected during the days 61-90. During the post-audit,you discovered that the City showed $2,000,000 in revenues. How much revenue should the City recognize in 2015 from this tax levy?
A) $ 1,850,000
B) $ 1,900,000
C) $ 1,920,000
D) $ 2,000,000
Q3) What is the difference between an extraordinary and special item?
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Chapter 5: Accounting for Other Governmental Fund Types:
Capital Projects, Debt Service, and Permanent
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149 Verified Questions
149 Flashcards
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Sample Questions
Q1) Fund basis financial statements in which capital projects funds are reported are the Governmental Funds Balance Sheet and the Governmental Funds Statement of Revenues,Expenditures,and Changes in Fund Balances.
A)True
B)False
Q2) Budgets are typically not recorded for Special Revenue Funds.
A)True
B)False
Q3) Unexpended intergovernmental grants and taxes dedicated to capital improvements in a capital projects fund are likely to be classified as Restricted Fund Balance
A)True B)False
Q4) Budgets are typically recorded for Debt Service Funds. A)True B)False
Q5) Any governmental fund may have a positive Unassigned Fund Balance. A)True B)False
Q6) What is the difference between Permanent Funds and Private Purpose Trust Funds? Page 7
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Page 8
Chapter 6: Proprietary Funds
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130 Verified Questions
130 Flashcards
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Sample Questions
Q1) Fund-basis financial statements prepared for proprietary funds include the Statement of Net Position,Statement of Revenues,Expenses,and Changes in Fund Net Position,and the Statement of Cash Flows.
A)True
B)False
Q2) Capital assets of internal service funds should be reported:
A) In the internal service funds only.
B) In the government-wide statements only.
C) In both the internal service funds and the government-wide statements.
D) None of the above, they are not reported
Q3) GASB requires that the reconciliation of income and cash flows from operations starts with operating income.
A)True
B)False
Q4) Post-closure costs are recorded in a solid waste landfill enterprise fund at the present value of estimated future costs.
A)True
B)False
Q5) Why might it be desirable for an enterprise fund to operate at a profit?
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Chapter 7: Fiduciary Funds, Inter-fund Transactions
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141 Verified Questions
141 Flashcards
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Sample Questions
Q1) Governments with defined benefit pension plans will report a net pension liability in the government-wide Statement of Net Position if the amount the government anticipates paying to employees in the future is greater than the net fiduciary position of the pension trust fund.
A)True
B)False
Q2) GASB Standards require that IRS 457 Deferred Compensation Plans,if administered by the governmental unit,be reported as pension trust funds.
A)True
B)False
Q3) When a contributor and a government agree that the principle and/or income of trust assets is for the benefit of individuals,organizations,or other governments,a private-purpose trust has been formed.
A)True
B)False
Q4) Investments in a pension trust fund should generally be reported using fair market value.
A)True
B)False
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Chapter 8: Government-Wide Statements: Capital Assets;
Long-Term
Debt
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144 Verified Questions
144 Flashcards
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Sample Questions
Q1) Which of the following is not a reconciliation required by GASB?
A) From governmental fund balance sheet to the Government-wide Statement of Net Position.
B) From governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-wide Statement of Activities.
C) From enterprise fund balance sheet to the Government-wide Statement of Net Assets.
D) None of the above, all these reconciliations are required.
Q2) A government reported an Other Financing Source in the amount of $600,000 related to the sale of land in its governmental funds Statement of Revenues,Expenditures,and Changes in Fund Balances. The land had a cost of $150,000.
The adjustment in the reconciliation when moving from the changes in fund balances in the Statement of Revenues,Expenditures,and Changes in Fund Balances to the change in Net Position in the Statement of Activities would be:
A) Increase of $150,000.
B) Decrease of $150,000.
C) Increase of $450,000.
D) Decrease of $450,000.
Q3) With regard to the government-wide statements,list the required statements.
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Chapter 9: Accounting for Special-Purpose Entities
Including Public Colleges and Universities
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104 Verified Questions
104 Flashcards
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Sample Questions
Q1) Which of the following statements is (are)true regarding public colleges and universities choosing to report as special-purpose entities engaged in business-type activities only?
A) Endowments would be reported in the Statement of Net Position as Net Position Restricted-Nonexpendable.
B) Capital appropriations from state governments are shown, in the Statement of Revenues, Expenses, and Changes in Net Position, as a category separate from revenues.
C) Both of the above.
D) Neither of the above.
Q2) Assume a government is a special-purpose government engaged in only one governmental activity. Which financial statements would be required?
A) Government-wide statements only.
B) Statements combining the governmental funds and government-wide statements.
C) Both government-wide and governmental fund basis statements.
D) Either B or C above.
Q3) Public colleges are never included as component units in the state CAFR.
A)True
B)False
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Chapter 10: Accounting for Private Not-For-Profit Organizations
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150 Verified Questions
150 Flashcards
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Sample Questions
Q1) Contributions to a private not-for-profit are recorded at fair market value at the date of receipt.
A)True
B)False
Q2) The AICPA Not-for-Profit Guide applies only to nongovernmental not-for-profit organizations.
A)True
B)False
Q3) Conditional promises to give are recognized as revenue or support when the promise is made net of estimated uncollectible receivables.
A)True
B)False
Q4) Contrast the reporting of mergers and acquisitions under the rules established by FASB Statement No.164,Not-for-Profit Entities: Mergers and Acquisitions?
Q5) Private not-for-profits use record encumbrances to maintain budgetary control.
A)True
B)False
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Chapter 11: College and University Accounting Private Institutions
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125 Verified Questions
125 Flashcards
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Sample Questions
Q1) Which of the following would not be considered a split-interest agreement,according to the Not-for-Profit Guide?
A) Charitable remainder trusts.
B) Charitable gift annuities.
C) Permanent income-sharing agreements.
D) Pooled (life) income funds.
Q2) A Research grant program is a type of split-interest agreement.
A)True
B)False
Q3) For private colleges and universities,reclassifications of temporarily restricted and unrestricted net assets could be made:
A) For satisfaction of purpose restrictions.
B) When time restrictions expire.
C) If the resources donated for fixed assets have been expended on such assets.
D) All of the above.
Q4) FASB standards require private colleges and universities to present a Statement of Cash Flows.
A)True
B)False
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Chapter 12: Accounting for Hospitals and Other Health Care
Providers
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Charity care is reported as both revenue and expense (bad debt)in the Statement of Operations.
A)True B)False
Q2) Private-sector health care organizations use the three-category FASB format for the Statement of Cash flows,while public sector organizations use the four-category GASB format
A)True B)False
Q3) The equity section of the Statement of Net Assets of a private not-for-profit hospital may contain which of the following descriptions?
A) Fiduciary, Proprietary, and General.
B) Nonspendable, Committed, Restricted and Assigned.
C) Permanently Restricted, Temporarily Restricted, and Unrestricted.
D) Net Investment in Capital Assets, Restricted, and Unrestricted Net Position.
Q4) What is the basis of accounting for hospitals and other health care organizations,and what organizations are responsible for setting Category A GAAP?
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Chapter 13: Auditing, Tax-Exempt Organizations, and Evaluating Performance
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150 Verified Questions
150 Flashcards
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Sample Questions
Q1) A disclaimer of opinion is the appropriate audit opinion when the auditor is not independent.
A)True
B)False
Q2) Governmental attestation engagements must comply with both the Government Auditing Standards and with the AICPA's attestation standards.
A)True
B)False
Q3) Tax-exempt organizations are required to disclose the compensation of its officers,directors,trustees,highest paid employees and independent contractors in the Form 990.
A)True
B)False
Q4) A measure of performance that expresses how much an organization expends in raising a dollar of donations is:
A) Fund-raising efficiency.
B) Program expense ratio.
C) Working capital ratio.
D) None of the above.
Page 16
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Chapter 14: Financial Reporting by the Federal Government
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68 Verified Questions
68 Flashcards
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Sample Questions
Q1) Assume a federal agency places orders for contracted services supporting a federal program. The journal entries at the agency level to record this event will include:
A) a credit to the account Expended Appropriations
B) a debit to the account Allotments
C) Both (a) and (b)
D) Neither (a) nor (b)
Q2) Apportionments are issued by the OMB and establish the amount of an appropriation that will be available each quarter.
A)True
B)False
Q3) Federal agencies that are required to report a Statement of Custodial Activity have transactions that are similar to which fund type of a state or local government?
A) Agency funds
B) Internal service funds
C) Capital projects funds
D) Permanent funds
Q4) Identify (in order of occurrence)the steps in the federal budgetary authority process.
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