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| 1.
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Which of the following is most likely to be a special purpose government? |
| | A) | Metropolitan Sewer District |
| | B) | Hillside Township |
| | C) | Hamilton County |
| | D) | River City |
| | E) | all of the above are special purpose governments |
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| 2.
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Which of the following is an example of a service that may be provided by a special-purpose local government? |
| | A) | Libraries |
| | B) | Fire protection |
| | C) | Transportation services |
| | D) | Sanitation services |
| | E) | All of the above |
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| 3.
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According to GASB Statement 34, paragraph 15, how are governmental activities financed? |
| | A) | Through user fees intended to cover the costs of the services |
| | B) | Through taxes |
| | C) | Through revenues received from other levels of government |
| | D) | Through other non-exchange transactions |
| | E) | B, C, and D are all correct |
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| 4.
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A special-purpose local government may be engaged in |
| | A) | A single governmental activity |
| | B) | More than one governmental activity |
| | C) | Both governmental and business-type activities |
| | D) | Fiduciary activities |
| | E) | All of the above |
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| 5.
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What are the reporting requirements for a special-purpose local government that engages in both governmental and business-type activities? |
| | A) | The entity must prepare government-wide financial statements and provide notes to the financial statements. |
| | B) | The entity must prepare fund basis financial statements and provide Required Supplementary Information. |
| | C) | The entity does not have to provide any financial statements of its own, but it must be included as a component unit of a general-purpose local government. |
| | D) | The special-purpose local government must provide MD&A, government-wide and fund basic financial statements, notes to the financial statements, and Required Supplementary Information. |
| | E) | None of the above |
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| 6.
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Which of the following special-purpose governments would be allowed to combine the fund and government-wide statements? |
| | A) | A special-purpose government that is engaged in both governmental and business-type activities |
| | B) | A special-purpose government that is engaged in two governmental-type activities |
| | C) | A special-purpose government that is engaged in one governmental activity |
| | D) | all of the above would be permitted to combine the fund and government-wide statements |
| | E) | none of the above would be permitted to combine the fund and government-wide statements |
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| 7.
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A special-purpose local government that engages in just one governmental activity is permitted to combine the fund and government-wide financial statements. In addition, the government must provide |
| | A) | Management's Discussion and Analysis |
| | B) | Notes to the financial statements |
| | C) | Required Supplementary Information |
| | D) | none of the above |
| | E) | all of the above |
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| 8.
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A special-purpose entity that engages in business-type activities only must report |
| | A) | Government-wide financial statements |
| | B) | Fund-basis financial statements |
| | C) | Notes to the financial statements, Management's Discussion and Analysis, and Required Supplementary Information |
| | D) | All of the above |
| | E) | Both B and C |
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| 9.
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A stand-alone government that provides retirement benefits for local government employees throughout the state of Wyoming would be considered a special-purpose government that engages in |
| | A) | Business-type activities only |
| | B) | Governmental activities only |
| | C) | Fiduciary activities only |
| | D) | Both business-type and governmental activities |
| | E) | None of the above |
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| 10.
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Which of the following would not be required when reporting on a special-purpose local government engaged only in business-type activities? |
| | A) | Statement of Cash Flows |
| | B) | Statement of Revenues, Expenditures, and Changes in Fund Balances |
| | C) | Statement of Net Assets (or Balance Sheet) |
| | D) | Management's Discussion and Analysis |
| | E) | all of the above are required |
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| 11.
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Devine County's Public Employee Retirement System (PERS) operates as a special-purpose government that manages several defined benefit pension plans. Which of the following is true? |
| | A) | Each benefit plan should be reported separately in the financial statements. |
| | B) | This system engages in fiduciary-type activities. |
| | C) | A Statement of Fiduciary Net Assets should be presented. |
| | D) | A Statement of Changes in Fiduciary Net Assets should be presented. |
| | E) | all of the above are true |
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| 12.
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Which of the following statements is true about the source of GAAP for colleges and universities? |
| | A) | Public colleges and universities follow guidelines established by GASB |
| | B) | Private colleges and universities follow guidelines established by FASB |
| | C) | Private for-profit colleges follow guidelines established by GASB. |
| | D) | A and B |
| | E) | A, B, and C |
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| 13.
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Which of the following is NOT one of the options available to public colleges and universities? |
| | A) | Report as an entity engaged only in business-type activities |
| | B) | Report as an entity engaged in both governmental-type and business-type activities |
| | C) | Report as an entity engaged only in governmental-type activities |
| | D) | Report as an entity engaged only in fiduciary activities |
| | E) | all of the above are acceptable options |
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| 14.
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What are typical sources of revenue for a public college or university? |
| | A) | tuition and fees |
| | B) | state appropriations |
| | C) | grants from the state or federal government |
| | D) | auxiliary enterprise activities |
| | E) | All of the above |
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| 15.
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Most public institutions of higher education choose to report as special-purpose entities engaged only in business-type activities. This choice is accompanied by a requirement to provide which of the following? |
| | A) | Budget and Actual comparison |
| | B) | Statement of Revenues, Expenses, and Changes in Net Assets |
| | C) | Statement of Cash Flows |
| | D) | B and C are both correct |
| | E) | all of the above |
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| 16.
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Which of the following is true about foundations? |
| | A) | Foundations are separate but related entities organized by governmental institutions to service debt. |
| | B) | Foundations are typically used to receive and administer contributions and grants. |
| | C) | Foundations are always reported as component units in the institution's annual reports. |
| | D) | Foundations are legally separate for-profit entities that use their profits to support the operations of a college or university. |
| | E) | none of the above |
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| 17.
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Which of the following is NOT one of the criteria used to determine whether a public college foundation should be reported as a discretely presented component unit in the college financial reports? |
| | A) | the governing board of the foundation reports directly to the governing board of the college |
| | B) | the economic resources of the foundation are significant to the college |
| | C) | the college has access to the majority of the resources of the foundation |
| | D) | the resources of the foundation are held entirely or almost entirely for the benefit of the college. |
| | E) | all of the above are criteria for this determination |
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| 18.
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Which of the following is NOT appropriate for public institutions of higher education? |
| | A) | Recording revenue bonds as liabilities and amortizing any premium or discount |
| | B) | Applying the modified approach for accounting for infrastructure |
| | C) | Recording the purchase of plant assets as an expenditure |
| | D) | Recording depreciation on plant assets |
| | E) | all of the above are appropriate |
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| 19.
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For the fall semester of 2006, Central State University charged tuition to its students in the amount of $5,400,000. It provided scholarships to some students from institutional resources; the amount was $300,000. Some students received scholarships of $180,000 from other organizations and agencies. Scholarships to employees and assistantships awarded to graduate students totaled $270,000. What amount of net tuition revenue should Central State University report for Fall 2006? |
| | A) | $5,400,000 |
| | B) | $5,100,000 |
| | C) | $4,920,000 |
| | D) | $4,650,000 |
| | E) | $4,830,000 |
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| 20.
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Central State University assessed student tuition and fees in the amount of $14,000,000. Scholarship allowances were made, for which no services were required, in the amount of $500,000. What journal entry should be made to record the assessed tuition and fees? |
| | A) | Debit Accounts Receivable for $14,000,000; credit Non-Operating Revenue — Tuition and Fees |
| | B) | Debit Accounts Receivable for $14,000,000; credit Operating Revenue — Tuition and Fees |
| | C) | Debit Accounts Receivable for $13,500,000; credit Operating Revenue — Tuition and Fees |
| | D) | Debit Accounts Receivable for $13,500,000; credit Non-Operating Revenue — Tuition and Fees |
| | E) | None of the above |
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| 21.
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Central State University assessed student tuition and fees in the amount of $14,000,000. Scholarship allowances were made, for which no services were required, in the amount of $500,000. What journal entry should be made to record the scholarships? |
| | A) | Debit Non-Operating Revenue — Tuition and Fees and credit Accounts Receivable for $500,000 |
| | B) | Debit Operating Revenue — Tuition and Fees and credit Accounts Receivable for $500,000 |
| | C) | Debit Operating Revenue Deduction — Scholarship Allowance and credit Accounts Receivable for $500,000 |
| | D) | Debit Cash and credit Accounts Receivable for $500,000 |
| | E) | None of the above |
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| 22.
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The following transactions took place at Beach State University: Total tuition .................................................................$850,000
Tuition refunded because classes were dropped............. 10,000*
Tuition not collected because Beach awarded
scholarships to the students........................................ 8,000*
Tuition not collected because graduate students.
performed services in exchange for tuition...................... 12,000*
*included in the $850,000 How much revenue should Beach report as "net tuition revenue?" |
| | A) | $850,000 |
| | B) | $840,000 |
| | C) | $832,000 |
| | D) | $830,000 |
| | E) | $820,000 |
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| 23.
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Central State University received its appropriation for general purposes from the state government in the amount of $8,000,000. How should CSU record this transaction? |
| | A) | Debit Cash and Cash Equivalents, credit Non-operating Revenues — State Appropriation for $8,000,000 |
| | B) | Debit Cash and Cash Equivalents, credit Operating Revenues — State Appropriation for $8,000,000 |
| | C) | Debit Restricted Cash and Cash Equivalents, credit Non-operating Revenues — State Appropriation for $8,000,000 |
| | D) | Debit Restricted Cash and Cash Equivalents, credit Operating Revenues — State Appropriation for $8,000,000 |
| | E) | None of the above |
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| 24.
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Central State University received a federal grant for $600,000 that was to be used to support faculty research in environmental science. How should the grant be recorded? |
| | A) | Debit Cash and Cash Equivalents, credit Non-operating Revenues — Restricted — Federal Grants for $600,000 |
| | B) | Debit Cash and Cash Equivalents, credit Operating Revenues — Restricted — Federal Grants for $600,000 |
| | C) | Debit Restricted Cash and Cash Equivalents, credit Non-operating Revenues — Restricted — Federal Grants for $600,000 |
| | D) | Debit Restricted Cash and Cash Equivalents, credit Operating Revenues — Restricted — Federal Grants for $600,000 |
| | E) | None of the above |
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| 25.
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If a university receives a reimbursement grant, when should the revenue associated with the grant be recognized? |
| | A) | When the cash is received |
| | B) | When the grant is announced by the granting agency (when the university knows it is going to get the grant) |
| | C) | At the beginning of the fiscal year of the granting agency |
| | D) | When expenditures covered by the grant are made |
| | E) | Either B or D |
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| 26.
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Central State University received cash of $900,000 from operations of some of its auxiliary enterprises and unrestricted cash gifts of $400,000. How should these revenues be recorded? |
| | A) | Operating Revenues of $1,300,000 |
| | B) | Non-operating Revenues of $1,300,000 |
| | C) | Operating Revenues of $900,000 and non-operating revenues of $400,000 |
| | D) | Operating revenues of $400,000 and non-operating revenues of $900,000 |
| | E) | None of the above |
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| 27.
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Late in fiscal year 2007, a donor pledged to give $500,000 to Central State University. What conditions must be met for Central State to recognize the revenue before the cash is received from the donor? |
| | A) | The contribution must be unconditional |
| | B) | The donor must have contributed to the university before and met the terms of his/her commitment |
| | C) | The pledge must not contain a provision that the funds cannot be expended until future years |
| | D) | The donor must not specify what the money is to be used for (scholarships, athletics, etc.) |
| | E) | Both A and C |
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| 28.
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Southern State College showed a beginning balance of $640,000 in Invested in Capital Assets, Net of Related Debt. During the year, the following occurred: The College purchased capital assets of $200,000, incurring related debt in the amount of $180,000. The College recorded depreciation expense of $120,000. Principal payments on debt related to capital assets amounted to $220,000. What was the balance in Invested in Capital Assets, Net of Related Debt at the end of the year? |
| | A) | $960,000 |
| | B) | $760,000 |
| | C) | $720,000 |
| | D) | $540,000 |
| | E) | $320,000 |
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| 29.
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Which of the following is true about financial statements for colleges reporting as special purpose entities engaged only in business-type activities? |
| | A) | An unrestricted net asset deficit is a clear indication that the institution is in financial stress. |
| | B) | State appropriations for operating purposes are considered operating revenue on the statement of revenues, expenses, and changes in net assets. |
| | C) | Either the direct or indirect method is allowed on the statement of cash flows. |
| | D) | An operating income figure is required on the statement of revenues, expenses, and changes in net assets. |
| | E) | all of the above are true |
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| 30.
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Which of the following is NOT true about the statement of cash flows for colleges reporting as special purpose entities engaged only in business-type activities? |
| | A) | The direct method is required |
| | B) | A reconciliation is required between operating income and cash flows from operations |
| | C) | The financing activities category is divided into Noncapital Financing Activities, and Capital and Related Financing Activities |
| | D) | The purchase of a capital asset is classified as an investing activity |
| | E) | all of the above are true |
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| 31.
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What financial statements are prepared by a college reporting as a special-purpose entity engaged in business-type activities only? |
| | A) | Statement of Net Assets |
| | B) | Statement of Revenues, Expenses, and Changes in Net Assets |
| | C) | Statement of Cash Flows |
| | D) | Statement of Activities |
| | E) | A, B, and C are all correct |
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| 32.
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On the statement of cash flows for a state college or university, which of the following is NOT a cash flow from operating activities? |
| | A) | Tuition and fees |
| | B) | Auxiliary enterprises |
| | C) | State appropriations |
| | D) | Payments of scholarships to students |
| | E) | Payments to suppliers |
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| 33.
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On the statement of cash flows for a state college or university, which of the following is NOT a cash flow from capital and related financing activities? |
| | A) | Gifts for endowment purposes |
| | B) | Capital appropriations |
| | C) | Purchases of capital assets |
| | D) | Interest on capital-related debt |
| | E) | Both A and D |
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| 34.
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On the statement of cash flows for a state college or university, which of the following is NOT a cash flow from investing activities? |
| | A) | Purchases of capital assets |
| | B) | Purchase of endowment investments |
| | C) | Interest on investments |
| | D) | Proceeds from sale of investments |
| | E) | All of the above are cash flows from investing activities |
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