Question 1

To qualify for tax-exempt status, an organization must do all of the following except:

Accepted Answer

A)  Have an Employer's Identification Number 
B)  Be organized as a corporation, trust or association 
C)  Complete IRS form 1023 
D)  Support political candidates 
A)  Have an Employer's Identification Number 
B)  Be organized as a corporation, trust or association 
C)  Complete IRS form 1023 
D)  Support political candidates

Question 2

Which of the following items, helpful for analysis, could be found in the statistical section of the CAFR?

Accepted Answer

A)  Assessed and actual (market) value of property 
B)  Population trends 
C)  Debt limit and margin 
D)  All of the above 
A)  Assessed and actual (market) value of property 
B)  Population trends 
C)  Debt limit and margin 
D)  All of the above

Question 3

What is the principle advantage of obtaining section 501(c)3 status?

Accepted Answer

A)  The charitable organization is permitted to engage in a trade or business unrelated to its mission without having to pay income taxes 
B)  Donors to the charitable organization are permitted to deduct contributions to the organization in computing their income taxes 
C)  Both (a) and (b) above 
D)  Neither (a) nor (b) above 
A)  The charitable organization is permitted to engage in a trade or business unrelated to its mission without having to pay income taxes 
B)  Donors to the charitable organization are permitted to deduct contributions to the organization in computing their income taxes 
C)  Both (a) and (b) above 
D)  Neither (a) nor (b) above

Question 4

Which of the following is not prohibited of organizations receiving tax exempt status under IRS Section 501(c)3?

Accepted Answer

A)  Earning a profit (increase in net assets) 
B)  Endorsing political candidates or attempting to influence legislation 
C)  Distributing earnings to the benefit of members or officers 
D)  None of the above. All of these are prohibited of Tax Exempt organizations 
A)  Earning a profit (increase in net assets) 
B)  Endorsing political candidates or attempting to influence legislation 
C)  Distributing earnings to the benefit of members or officers 
D)  None of the above. All of these are prohibited of Tax Exempt organizations

Question 5

How is the Unrelated Business Income Tax computed?

Accepted Answer

When computing unrelated business income

Question 6

In a governmental audit the auditor is only required to report directly to the appropriate officials

Accepted Answer

A) True 
 B)False

Question 7

Which of the following would be considered a performance audit under the Government Auditing Standards?

Accepted Answer

A)  An investigation into whether a purchasing department of a government was operated efficiently 
B)  An investigation into whether a social service agency of a state government improved the lives of its clients 
C)  Both of the above 
D)  Neither of the above 
A)  An investigation into whether a purchasing department of a government was operated efficiently 
B)  An investigation into whether a social service agency of a state government improved the lives of its clients 
C)  Both of the above 
D)  Neither of the above

Question 8

A local government has four federal grants. Expenditures amounted to $1,000,000 during the year ended June 30, 2009, as follows:
 $\begin{array}{l}

\begin{array} { | l | r | } 
\hline\text { Type A }\
\hline \text { HHS grant, audited last year, no major findings } & \$ 400,000 \
\hline \text { HHS grant, new this year and never audited } & 350,000 \
\hline \text { Type B } & \
\hline \text { Department of Transportation } & 205,000 \
\hline \text { FFA } & \$ 45,000 \
\hline \text { Total all funds } & \$ 1,000,000 \
\hline
\end{array}
\end{array}$ A. Which grants would the auditor be required to audit, assuming the government is not found to be low risk?
B. Which grants would the auditor be required to audit, assuming the government is found to be low risk?

Accepted Answer

A. If the government is not found to be

Question 9

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

Accepted Answer

(a) Unqualified - indicates that the fin

Question 10

How has the Sarbanes-Oxley Act of 2002 affected the practices of not-for-profit and governmental organizations? Why have these provisions been adopted?

Accepted Answer

While the provisions of the Sarbanes-Oxl

Question 11

In order to compute the ratio unreserved fund balance/revenues-General Fund, one would look in the CAFR at the:

Accepted Answer

A)  Governmental funds Balance Sheet and the Governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances 
B)  Government-wide Statement of Net Assets and government-wide Statement of Activities 
C)  Governmental funds Balance Sheet 
D)  Governmental funds Statement of Revenues, Expenditures and Changes in Fund Balance 
A)  Governmental funds Balance Sheet and the Governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances 
B)  Government-wide Statement of Net Assets and government-wide Statement of Activities 
C)  Governmental funds Balance Sheet 
D)  Governmental funds Statement of Revenues, Expenditures and Changes in Fund Balance

Question 12

Entities that are tax exempt under Section 501(c)3 of the Internal Revenue Code do not have to pay income taxes, even if some of their activities compete with commercial enterprises.

Accepted Answer

A) True 
 B)False

Question 13

To compute the net debt per capita, a user of financial statements would need to look at (in the CAFR):

Accepted Answer

A)  The debt in the government-wide Statement of Net Assets, the amount available to pay that debt in the governmental funds Balance Sheet and the population from the statistical section 
B)  The debt and the amount available to pay that debt in the governmental funds Balance Sheet and the population from the statistical section 
C)  The debt in the governmental funds Balance Sheet, the amount available in the government-wide Statement of Net Assets and the population from the statistical section 
D)  All three items from the government-wide Statement of Net Assets 
A)  The debt in the government-wide Statement of Net Assets, the amount available to pay that debt in the governmental funds Balance Sheet and the population from the statistical section 
B)  The debt and the amount available to pay that debt in the governmental funds Balance Sheet and the population from the statistical section 
C)  The debt in the governmental funds Balance Sheet, the amount available in the government-wide Statement of Net Assets and the population from the statistical section 
D)  All three items from the government-wide Statement of Net Assets

Question 14

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

Question 15

Service Efforts and Accomplishments Reporting is voluntary for not-for-profit organizations

Accepted Answer

A) True 
 B)False

Question 16

Which of the following activities may give rise to Unrelated Business Income Tax?

Accepted Answer

A)  Investment income arising from investment of unrestricted funds 
B)  Sale of donated merchandise 
C)  Advertising revenues from advertisements in a newsletter 
D)  None of the above would give rise to unrelated business income 
A)  Investment income arising from investment of unrestricted funds 
B)  Sale of donated merchandise 
C)  Advertising revenues from advertisements in a newsletter 
D)  None of the above would give rise to unrelated business income

Question 17

Which of the following provisions of the Sarbanes-Oxley Act already existed in governmental auditing standards?

Accepted Answer

A)  Auditors are required to report deficiencies in the design or operation of internal controls 
B)  Not-for-profit organizations are required to establish audit committees composed of non-management board members. 
C)  All nonaudit services performed by the auditors must be approved by the audit committee 
D)  All of the above 
A)  Auditors are required to report deficiencies in the design or operation of internal controls 
B)  Not-for-profit organizations are required to establish audit committees composed of non-management board members. 
C)  All nonaudit services performed by the auditors must be approved by the audit committee 
D)  All of the above

Question 18

Currently, a single audit is required for organizations receiving what amount of money of federal funds?

Accepted Answer

A)  > $100,000 
B)  > $300,000 
C)  > $500,000 
D)  > $700,000 
A)  > $100,000 
B)  > $300,000 
C)  > $500,000 
D)  > $700,000

Question 19

The three major user groups identified by the GASB are (1) citizen groups, (2) legislative and oversight officials and (3) investors and creditors.

Accepted Answer

A) True 
 B)False

Question 20

Section 501(c)(3), exempt organizations are prohibited from supporting political candidates or campaigning to influence legislation.

Accepted Answer

A) True 
 B)False

To qualify for tax-exempt status, an organization must do all of the following except:

Which of the following items, helpful for analysis, could be found in the statistical section of the CAFR?

What is the principle advantage of obtaining section 501(c)3 status?

Which of the following is not prohibited of organizations receiving tax exempt status under IRS Section 501(c)3?

How is the Unrelated Business Income Tax computed?

In a governmental audit the auditor is only required to report directly to the appropriate officials

Which of the following would be considered a performance audit under the Government Auditing Standards?

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

How has the Sarbanes-Oxley Act of 2002 affected the practices of not-for-profit and governmental organizations? Why have these provisions been adopted?

In order to compute the ratio unreserved fund balance/revenues-General Fund, one would look in the CAFR at the:

Entities that are tax exempt under Section 501(c)3 of the Internal Revenue Code do not have to pay income taxes, even if some of their activities compete with commercial enterprises.

To compute the net debt per capita, a user of financial statements would need to look at (in the CAFR):

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

Service Efforts and Accomplishments Reporting is voluntary for not-for-profit organizations

Which of the following activities may give rise to Unrelated Business Income Tax?

Which of the following provisions of the Sarbanes-Oxley Act already existed in governmental auditing standards?

Currently, a single audit is required for organizations receiving what amount of money of federal funds?

The three major user groups identified by the GASB are (1) citizen groups, (2) legislative and oversight officials and (3) investors and creditors.

Section 501(c)(3), exempt organizations are prohibited from supporting political candidates or campaigning to influence legislation.

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Proprietary Funds

Fiduciary Trust Funds

Government-Wide Statements, Capital Assets, Long-Term Debt

Accounting for Special-Purpose Entities, Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Filters

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

To qualify for tax-exempt status, an organization must do all of the following except:

Which of the following items, helpful for analysis, could be found in the statistical section of the CAFR?

What is the principle advantage of obtaining section 501(c)3 status?

Which of the following is not prohibited of organizations receiving tax exempt status under IRS Section 501(c)3?

How is the Unrelated Business Income Tax computed?

In a governmental audit the auditor is only required to report directly to the appropriate officials

Which of the following would be considered a performance audit under the Government Auditing Standards?

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

How has the Sarbanes-Oxley Act of 2002 affected the practices of not-for-profit and governmental organizations? Why have these provisions been adopted?

In order to compute the ratio unreserved fund balance/revenues-General Fund, one would look in the CAFR at the:

Entities that are tax exempt under Section 501(c)3 of the Internal Revenue Code do not have to pay income taxes, even if some of their activities compete with commercial enterprises.

To compute the net debt per capita, a user of financial statements would need to look at (in the CAFR):

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

Service Efforts and Accomplishments Reporting is voluntary for not-for-profit organizations

Which of the following activities may give rise to Unrelated Business Income Tax?

Which of the following provisions of the Sarbanes-Oxley Act already existed in governmental auditing standards?

Currently, a single audit is required for organizations receiving what amount of money of federal funds?

The three major user groups identified by the GASB are (1) citizen groups, (2) legislative and oversight officials and (3) investors and creditors.

Section 501(c)(3), exempt organizations are prohibited from supporting political candidates or campaigning to influence legislation.

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Proprietary Funds

Fiduciary Trust Funds

Government-Wide Statements, Capital Assets, Long-Term Debt

Accounting for Special-Purpose Entities, Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Filters