Question 1

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 2

Entities that are tax exempt under IRS Section 501(c)3 are prohibited from endorsing political candidates or attempting to influence legislation.

Accepted Answer

A) True 
 B)False

Question 3

Governmental Auditing Standards identifies four categories of professional engagements:
 financial audits,performance audits,attestation engagements,and non-audit services.

Accepted Answer

A) True 
 B)False

Question 4

The program expense ratio is calculated as follows:

Accepted Answer

A)  Program service expenses / Total expenses 
B)  Program service expenses + supporting service expenses / Total expenses 
C)  Total expenses / Program service expenses 
D)  Total expenses / Program service expenses + supporting service expenses 
A)  Program service expenses / Total expenses 
B)  Program service expenses + supporting service expenses / Total expenses 
C)  Total expenses / Program service expenses 
D)  Total expenses / Program service expenses + supporting service expenses

Question 5

Which of the following may be deducted in computing income from unrelated business activities?

Accepted Answer

A)  Ordinary and necessary business expenses. 
B)  $1,000 exemption. 
C)  Charitable contributions. 
D)  All of the above. 
A)  Ordinary and necessary business expenses. 
B)  $1,000 exemption. 
C)  Charitable contributions. 
D)  All of the above.

Question 6

Which organization promulgates the Government Auditing Standards?

Accepted Answer

A)  The American Institute of Certified Public Accountants. 
B)  The U.S. Office of Management and Budget. 
C)  The Securities and Exchange Commission. 
D)  The U.S. Government Accountability Office. 
A)  The American Institute of Certified Public Accountants. 
B)  The U.S. Office of Management and Budget. 
C)  The Securities and Exchange Commission. 
D)  The U.S. Government Accountability Office.

Question 7

Net Asset classification for a tax-exempt organization are consistent with GASB standards.

Accepted Answer

A) True 
 B)False

Question 8

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 9

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 10

Which of the following tax-exempt organizations would be required to file a form 990 or 990-EZ?

Accepted Answer

A)  A charity with gross receipts of > $25,000. 
B)  A church with gross receipts of > $25,000. 
C)  Both (a) and (b). 
D)  Neither (a) nor (b). 
A)  A charity with gross receipts of > $25,000. 
B)  A church with gross receipts of > $25,000. 
C)  Both (a) and (b). 
D)  Neither (a) nor (b).

Question 11

Which of the following is true concerning tax exempt organizations with unrelated business income?

Accepted Answer

A)  They may deduct all expenses in computing their tax liability. 
B)  They may deduct the first $1,000 of unrelated business income. 
C)  They file a 1040-NFP with the IRS. 
D)  They must include investment income in computing their tax liability. 
A)  They may deduct all expenses in computing their tax liability. 
B)  They may deduct the first $1,000 of unrelated business income. 
C)  They file a 1040-NFP with the IRS. 
D)  They must include investment income in computing their tax liability.

Question 12

What is the correct hierarchy of performance indicators of SEA's?

Accepted Answer

A)  Indicators of service efforts, indicators of service accomplishments, indicators of efficiency 
B)  Indicators of service accomplishments, indicators of efficiency, indicators of service efforts 
C)  Indicators of efficiency, indicators of service accomplishments, indicators of service efforts 
D)  Indicators of service efforts, mission objectives, indicators of efficiency 
A)  Indicators of service efforts, indicators of service accomplishments, indicators of efficiency 
B)  Indicators of service accomplishments, indicators of efficiency, indicators of service efforts 
C)  Indicators of efficiency, indicators of service accomplishments, indicators of service efforts 
D)  Indicators of service efforts, mission objectives, indicators of efficiency

Question 13

The Comprehensive Annual Financial Report of a local governmental unit includes several statements and sections.When a financial analyst is computing ratios and extracting other information,he or she needs to know where in the CAFR to look.Use the following classification to indicate where an analyst would look in the CAFR to compute the ratios and gather information by placing the appropriate letter(s)in the space next to each item.When possible,choose the location in the basic financial statements or notes that would be subject to examination:

Accepted Answer

1-d; 2-d,p; 3-i; 4-i; 5-g,p; 6

Question 14

While the Sarbanes-Oxley Act applies only to corporations filing with the Securities and Exchange Commission,several provisions of the Act already existed in governmental auditing standards,and others are being voluntarily adopted by not-for-profit organizations

Accepted Answer

A) True 
 B)False

Question 15

If an auditor is not independent which type of audit opinion is appropriate?

Accepted Answer

A)  Unqualified 
B)  Qualified 
C)  Adverse 
D)  Disclaimer of opinion 
A)  Unqualified 
B)  Qualified 
C)  Adverse 
D)  Disclaimer of opinion

Question 16

Which of the following conditions would exempt income-producing activities from the Unrelated Business Income Tax (UBIT)?

Accepted Answer

A)  Majority of labor is performed by paid employees. 
B)  The business is carried on regularly. 
C)  It is operated for a profit. 
D)  Merchandise is donated. 
A)  Majority of labor is performed by paid employees. 
B)  The business is carried on regularly. 
C)  It is operated for a profit. 
D)  Merchandise is donated.

Question 17

Supporting expenses are not included in the numerator of the program expense ratio.

Accepted Answer

A) True 
 B)False

Question 18

The program expense ratio for a not-for-profit organization will improve if the organization shifts costs from fund raising to program expenses.

Accepted Answer

A) True 
 B)False

Question 19

The highest bond rating assigned by Moody's is:

Accepted Answer

A)  A+ 
B)  A 
C)  AAA 
D)  AAA+ 
A)  A+ 
B)  A 
C)  AAA 
D)  AAA+

Question 20

The use of opinion units allows an auditor to issue different opinions on different statements,instead of issuing one opinion.

Accepted Answer

A) True 
 B)False

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

Entities that are tax exempt under IRS Section 501(c)3 are prohibited from endorsing political candidates or attempting to influence legislation.

Governmental Auditing Standards identifies four categories of professional engagements: financial audits,performance audits,attestation engagements,and non-audit services.

The program expense ratio is calculated as follows:

Which of the following may be deducted in computing income from unrelated business activities?

Which organization promulgates the Government Auditing Standards?

Net Asset classification for a tax-exempt organization are consistent with GASB standards.

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

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.

Which of the following tax-exempt organizations would be required to file a form 990 or 990-EZ?

Which of the following is true concerning tax exempt organizations with unrelated business income?

What is the correct hierarchy of performance indicators of SEA's?

While the Sarbanes-Oxley Act applies only to corporations filing with the Securities and Exchange Commission,several provisions of the Act already existed in governmental auditing standards,and others are being voluntarily adopted by not-for-profit organizations

If an auditor is not independent which type of audit opinion is appropriate?

Which of the following conditions would exempt income-producing activities from the Unrelated Business Income Tax (UBIT)?

Supporting expenses are not included in the numerator of the program expense ratio.

The program expense ratio for a not-for-profit organization will improve if the organization shifts costs from fund raising to program expenses.

The highest bond rating assigned by Moody's is:

The use of opinion units allows an auditor to issue different opinions on different statements,instead of issuing one opinion.

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 Trustfunds

Government-Wide Statements, capital Assets, long-Term Debt

Advanced Topics for State and Local Governments

Accounting for Private Not-For-Profit Organizations

College and University Accounting

Accounting for Hospitals and Other Health Care Providers

Financial Reporting by the Federal Government

Filters

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

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

Entities that are tax exempt under IRS Section 501(c)3 are prohibited from endorsing political candidates or attempting to influence legislation.

Governmental Auditing Standards identifies four categories of professional engagements: financial audits,performance audits,attestation engagements,and non-audit services.

The program expense ratio is calculated as follows:

Which of the following may be deducted in computing income from unrelated business activities?

Which organization promulgates the Government Auditing Standards?

Net Asset classification for a tax-exempt organization are consistent with GASB standards.

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

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.

Which of the following tax-exempt organizations would be required to file a form 990 or 990-EZ?

Which of the following is true concerning tax exempt organizations with unrelated business income?

What is the correct hierarchy of performance indicators of SEA's?

While the Sarbanes-Oxley Act applies only to corporations filing with the Securities and Exchange Commission,several provisions of the Act already existed in governmental auditing standards,and others are being voluntarily adopted by not-for-profit organizations

If an auditor is not independent which type of audit opinion is appropriate?

Which of the following conditions would exempt income-producing activities from the Unrelated Business Income Tax (UBIT)?

Supporting expenses are not included in the numerator of the program expense ratio.

The program expense ratio for a not-for-profit organization will improve if the organization shifts costs from fund raising to program expenses.

The highest bond rating assigned by Moody's is:

The use of opinion units allows an auditor to issue different opinions on different statements,instead of issuing one opinion.

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 Trustfunds

Government-Wide Statements, capital Assets, long-Term Debt

Advanced Topics for State and Local Governments

Accounting for Private Not-For-Profit Organizations

College and University Accounting

Accounting for Hospitals and Other Health Care Providers

Financial Reporting by the Federal Government

Filters