Exam 13: Accounting for Not-For-Profit Organizations

Describe what is meant by the direct costs of a program (for example,a fire prevention program)and why it is important to distinguish direct costs from indirect costs.

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Question 1

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The direct costs of a program are those that can be identified as having been incurred specifically for the purposes of the program.It is important to carefully distinguish direct costs since a government can usually recover the full amount of direct costs of a program that receives federal funding,but only if the costs are identified in the manner set forth in Circular A-87.Indirect costs may only be partially recoverable.Also,knowing what the cost of providing fire protection is can be highly useful in determining whether to contract with a private firm for fire protection,as did one innovative municipality.

All of the following are objectives of activity-based cost (ABC)accounting in government except

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Question 2

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Why should persons who manage,advise,or audit governments and not-for-profit organizations be generally familiar with OMB Circulars A-87,A-21,and A-122? In your answer explain what "OMB" means,and why its circulars should be of concern to those involved with management,advisement,or auditing of state and local governments and not-for-profit organizations.

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The OMB is the Office of Management and Budget,a part of the Executive office of the President of the United States,charged with establishing "cost principles" to govern payments by the federal government under grant programs,contracts,and other agreements,to state and local governments (Circular A-87),educational institutions (Circular A-21),and other not-for-profit organizations (Circular A-122).These circulars specify which costs are always allowable,which are allowable with the explicit approval of the grantor agency,and which costs are always unallowable.Without this knowledge,governments may fail to recover all costs they should,or as recent highly publicized stories involving institutions of higher learning have revealed,they may try to recover unallowable (or at least improper)costs.

Which of the following is not an element of a typical governmental total quality management (TQM)structure?

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Question 4

The type of budgeting that relates input of resources to output of services is zero-based budgeting.

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Question 5

The following are key terms in Chapter 13 that relate to budgeting of government services: A.Efficiency measures B.Effectiveness measures C.Planning-programming-budgeting system D.Zero-based budgeting E.Program budgeting F.Flexible budgeting G.Incremental budgeting H.Budget calendar For each of the following definitions,indicate the key term from the list above that best matches by placing the appropriate letter in the blank space next to the definition.

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Question 6

The government official typically responsible for providing department heads with such technical support as clerical assistance with budget computation and maintenance of document files relating to the budget is

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Question 7

Cash receipts and cash disbursement budgets for a government

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Question 8

In budgeting revenues,state and local government administrators should

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Question 9

Which basis of accounting best contributes to measuring the cost of services for rational budgeting purposes?

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Question 10

Describe what is meant by the term "entrepreneurial budgeting." Would you expect governments to adopt an entrepreneurial budgeting approach in lieu of a more traditional budgeting approach,such as incremental budgeting?

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Question 11

A generally unallowable cost may be allowable under certain circumstances.

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Question 12

Which of the following costs incurred by a city for a federal grant program would likely be considered unallowable under OMB Circular A-87?

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Question 13

The concepts of total quality management (TQM)are consistent with earlier budget approaches such as performance budgeting and PPBS.

(True/False)

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Question 14

Total quality management (TQM)seeks to continuously improve an organization's ability to meet or exceed customers' demands,and,as such,is useful in a government setting as well as a business setting.

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Question 15

State and local governments and not-for-profit organizations that receive grants or contracts from the federal government should charge costs of these grants or contracts in conformity with

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Question 16

The following are key terms in Chapter 13 that relate to costing of government services: A.Allowable costs B.Job order costing C.Common rule D.Cost objective E.Indirect costs F.Direct costs G.Process costing H.Activity-based costing For each of the following definitions,indicate the key term from the list above that best matches by placing the appropriate letter in the blank space next to the definition.

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Question 17

"Because a budgetary comparison statement is required for conformity with GAAP (under GASBS 34),resource management purposes are best served by preparation of the budget on the same basis as the accounts." Do you agree? Why or why not?

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Question 18

Explain the relevance of process cost accounting to governmental financial management.

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Question 19

Service efforts and accomplishments measures suffer from the same problem as line-item or object-of-expenditures budgeting; that is,focusing only on resource inputs while ignoring outputs and outcomes of governmental activities.

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Question 20

Showing 1 - 20 of 65

Describe what is meant by the direct costs of a program (for example,a fire prevention program)and why it is important to distinguish direct costs from indirect costs.

All of the following are objectives of activity-based cost (ABC)accounting in government except

Which of the following is not an element of a typical governmental total quality management (TQM)structure?

The type of budgeting that relates input of resources to output of services is zero-based budgeting.

The government official typically responsible for providing department heads with such technical support as clerical assistance with budget computation and maintenance of document files relating to the budget is

Cash receipts and cash disbursement budgets for a government

In budgeting revenues,state and local government administrators should

Which basis of accounting best contributes to measuring the cost of services for rational budgeting purposes?

Describe what is meant by the term "entrepreneurial budgeting." Would you expect governments to adopt an entrepreneurial budgeting approach in lieu of a more traditional budgeting approach,such as incremental budgeting?

A generally unallowable cost may be allowable under certain circumstances.

Which of the following costs incurred by a city for a federal grant program would likely be considered unallowable under OMB Circular A-87?

The concepts of total quality management (TQM)are consistent with earlier budget approaches such as performance budgeting and PPBS.

Total quality management (TQM)seeks to continuously improve an organization's ability to meet or exceed customers' demands,and,as such,is useful in a government setting as well as a business setting.

State and local governments and not-for-profit organizations that receive grants or contracts from the federal government should charge costs of these grants or contracts in conformity with

"Because a budgetary comparison statement is required for conformity with GAAP (under GASBS 34),resource management purposes are best served by preparation of the budget on the same basis as the accounts." Do you agree? Why or why not?

Explain the relevance of process cost accounting to governmental financial management.

Service efforts and accomplishments measures suffer from the same problem as line-item or object-of-expenditures budgeting; that is,focusing only on resource inputs while ignoring outputs and outcomes of governmental activities.

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

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts; Budgetary Accounting

Accounting for Governmental Operating Activitiesillustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-Type Activities of State and Local Governments

Accounting for Fiduciary Activities Agency and Trust Funds

Financial Reporting of State and Local Governments

Analysis of Governmental Financial Performance

Auditing of Governmental and Not-For-Profit Organizations

Budgeting and Performance Measurement

Not-For-Profit Organizations Regulatory, taxation, and Performance Issues

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government

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