Question 1

Match between columns
                        Premises: Information regarding actual and planned maintenance of infrastructure, when the modified approach is used
Summary information regarding overall government financial performance for the year
City management organizational chart
Actual expenditures/budgeted expenditures.General Fund
Total expenses for interest for a major enterprise fund
Assessed value of property
Unreserved fund balance/revenues.General Fund
Debt service/total governmental revenues
Unfunded pension liability for the government as a whole
Schedule of direct and overlapping debt
Net debt to fair value of property
Interest coverage.revenue bonds
Unrestricted Net Position.governmental activities/general government expenses.governmental activities
Cash expended on capital assets. enterprise activities
Cash balances in a pension trust fund
Net debt per capita
Debt limit and debt margin
Operating ratio.enterprise funds
Governmental revenues per capita
Information regarding balances for a nonmajor enterprise fund

Accepted Answer

The Answer of Proprietary funds Statement of Cash Flows and is...

Question 2

All of the following are examples of service outputs for a public school, except:

Accepted Answer

A)  Enrollment increases. 
B)  The number of students progressing to the next grade level. 
C)  Dropout rates. 
D)  Degrees conferred.

Question 3

What is the principal advantage of having 501c 3 status to an organization that receives substantial support from outside contributors?

Accepted Answer

A)  The organization does not have to pay federal income tax. 
B)  Donors to the organization may deduct their contributions as charitable donations. 
C)  The organization does not have to pay state sales taxes on purchases. 
D)  All of the above.

Question 4

The use of opinion units allows the auditor to

Accepted Answer

A)  Plan the audit better and increase the effectiveness of substantive procedures. 
B)  Eliminate the need for Test of Controls. 
C)  Provide different opinions on different components of the reporting entity. 
D)  Only allow one opinion for entire entity not its components.

Question 5

A tax-exempt organization is required to pay income taxes on:

Accepted Answer

A)  Profit that is earned. 
B)  Investment gains or losses. 
C)  Unrelated business income. 
D)  Contributions received.

Question 6

Which of the following is accurate with respect to Service and Accomplishments SEA reporting?

Accepted Answer

A)  According to the GASB, output measures are the quantity of a service provided or the quantity of a service that meets a certain quality requirement. 
B)  Government and not-for-profit effectiveness can be quantified and illustrated in financial terms. 
C)  Ratio analysis is typically used to illustrate program efficiency and effectiveness. 
D)  Effectiveness in nonbusiness organizations must be measured in terms of the quality of the service provided or the extent to which an organization fulfills its mission which is calculated using a matrix that includes several inputs and outputs.

Question 7

What is required for an organization to qualify for tax-exempt status?

Accepted Answer

The answer of What is required for an organization to...

Question 8

Which of the following is true regarding the Internal Revenue Service's concern regarding ?

Accepted Answer

A)  Organizations are charging many of their program expenses to fund-raising. 
B)  Executives of are receiving excessive salaries and benefits. 
C)  Both a and b. 
D)  Neither a nor b.

Question 9

Public sector audits differ from those of commercial businesses in which of the following ways?

Accepted Answer

A)  The auditor is not required to be independent. 
B)  The auditor reports to outside agencies as well as management of the organization. 
C)  The auditor does not use sampling 
D)  All of the above.

Question 10

Governments and other nonprofits receiving federal funds follow Governmental Auditing Standards and do not have to comply with AICPA Statements of Auditing Standards.

Accepted Answer

A) True 
 B)False

Question 11

are required to pay tax at the corporate rate on the income generated from any trade or business activities unrelated to the entity's tax-exempt purposes.

Accepted Answer

A) True 
 B)False

Question 12

Bonds which carry the full faith and credit of a government are called general obligation bonds.

Accepted Answer

A) True 
 B)False

Question 13

Describe the types of audit opinions that may be issued on a governmental or not-for-profit financial report.

Accepted Answer

The answer of Describe the types of audit opinions that...

Question 14

Which of the following statements is  not correct?

Accepted Answer

A)  Governmental units and many not-for-profit organizations are subject to Government Auditing Standards in addition to the Statements on Auditing Standards, issued by the American Institute of Certified Public Accountants AICPA. 
B)  Government Auditing Standards are issued by the U.S. Government Accountability Office GAO do not apply to audits conducted to satisfy the requirements of the Single Audit Act as well as other governmental audits. 
C)  Standards issued by the AICPA are known as GAAS Generally Accepted Auditing Standards). 
D)  Standards issued by the GAO are known as GAGAS Generally Accepted Government Auditing Standards.

Question 15

Which of the following is true regarding the Single Audit Act and its amendments?

Accepted Answer

A)  All governmental entities with expenditures of federal funds in excess of $750,000 must have a single audit, if more than one program exists. 
B)  An audit must be designed to cover 25 percent of federal funds expended, unless the organization is deemed to be low risk. 
C)  Both A and B above. 
D)  Neither A nor B above.

Question 16

What is the maximum threshold for a tax-exempt organization to file a form 990-EZ?

Accepted Answer

A)  A charity with gross receipts less than $50,000 and assets less than $250,000 
B)  A charity with gross receipts less than $200,000 and assets less than $500,000 
C)  A charity with gross receipts less than $500,000 and assets less than $1 million 
D)  A charity with gross receipts less than $500,000 and assets less than $5million.

Question 17

Assuming an auditee is considered low-risk, the auditor is required to express an opinion on compliance on major programs, which must add up to 25 percent of federal funds expended by the auditee.

Accepted Answer

A) True 
 B)False

Question 18

Working capital ratio for a not-for-profit is the ratio: current assets divided by total expenses.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not part of a financial audit?

Accepted Answer

A)  Forming judgments about internal controls 
B)  Testing compliance with laws and regulations 
C)  Providing an opinion on compliance with GAAP 
D)  Assessing the degree to which program objectives have been met

Question 20

The working capital ratio provides a measure of how long a not-for-profit could sustain its operations without generating new revenue.

Accepted Answer

A) True 
 B)False

Exam 13: Auditing, Tax-exempt Organizations, and Evaluating Performance

All of the following are examples of service outputs for a public school, except:

What is the principal advantage of having 501c 3 status to an organization that receives substantial support from outside contributors?

The use of opinion units allows the auditor to

A tax-exempt organization is required to pay income taxes on:

Which of the following is accurate with respect to Service and Accomplishments SEA reporting?

What is required for an organization to qualify for tax-exempt status?

Which of the following is true regarding the Internal Revenue Service's concern regarding ?

Public sector audits differ from those of commercial businesses in which of the following ways?

Governments and other nonprofits receiving federal funds follow Governmental Auditing Standards and do not have to comply with AICPA Statements of Auditing Standards.

are required to pay tax at the corporate rate on the income generated from any trade or business activities unrelated to the entity's tax-exempt purposes.

Bonds which carry the full faith and credit of a government are called general obligation bonds.

Describe the types of audit opinions that may be issued on a governmental or not-for-profit financial report.

Which of the following statements is not correct?

Which of the following is true regarding the Single Audit Act and its amendments?

What is the maximum threshold for a tax-exempt organization to file a form 990-EZ?

Assuming an auditee is considered low-risk, the auditor is required to express an opinion on compliance on major programs, which must add up to 25 percent of federal funds expended by the auditee.

Working capital ratio for a not-for-profit is the ratio: current assets divided by total expenses.

Which of the following is not part of a financial audit?

The working capital ratio provides a measure of how long a not-for-profit could sustain its operations without generating new revenue.