Exam 13: Accounting for Not-For-Profit Organizations

Accounting for federal and nonfederal grants and contracts requires an accounting system that can associate line-item expenses with functional programs with funding sources.

Entrepreneurial budgeting places responsibility for budgeting on the highest level person in the organization who integrates strategic planning in the budgeting process.

Which of the following is not one of the purposes of a budget considered in the Government Finance Officer Association (GFOA)Distinguished Budget Presentation Award Program?

Which of the following budgetary approaches starts with line-item expenditures and applies a factor approximating the inflation rate to most items,unless specific information is available to suggest a different factor be applied?

Service efforts and accomplishments (SEA)reporting helps citizens,elected officials,appointed officials,investors and creditors,and other interested parties evaluate the government's performance in the absence of a "bottom line" measure such as exists for for-profit entities.

Discuss the implications of GASB governmental fund and government-wide financial reporting on the budgeting process in a city.

In order to account properly to federal and nonfederal grantors,an accounting information system must be able to capture information about all of the following except

Budget appropriations for governmental funds ordinarily cover only one year,however; there is also a need to develop multi-year capital budgets.

Cash planning and budgeting are important in government because the timing of cash inflows often do not coincide with the timing of cash outflows.

To determine which costs are unallowable for charging to a federal assistance program,one should refer to the appropriate cost circular published by the Government Accountability Office (GAO).

Cash disbursements budgets

Activity-based costing data is available for various activities relating to highway signage in Pinconning City.The activities include: cut brush,hand-letter and silk-screen signs,hang banners,install signs,relocate or remove signs,repair and replace signs,apply sign face,and installation.The specific components of the costs for each activity are personnel costs,direct material costs,overhead costs,and stock costs.Accomplishments are measured in terms of number of hours or signs for each of the activities.How does this method of accumulating costs compare with a typical cost accounting system that allocates indirect costs on a predetermined overhead rate basis? What can you learn from an activity based system that is not provided by a conventional costing system?

"User charges for services rendered by an activity accounted for by a proprietary fund should cover indirect costs as well as direct costs.Further,user charges must be set before the service is rendered (which means before either direct costs or indirect costs are known)." Assuming that both these statements are true,explain how you would proceed to set user charges for an activity accounted for by a proprietary fund.

Which of the following kinds of cost accounting would be least useful for governmental budgeting?

A fortunate by-product of fund accounting for the governmental funds of state and local governments is that it readily accumulates costs needed for decision-making.

A major disadvantage of activity-based costing in a governmental setting is the very limited number of activities for which it can be used.

Every government,regardless of its size,should prepare a cash budget for each month of the fiscal year.

Why is a medium- or long-range capital improvement plan essential to sound capital budgeting?

What is the role of cost drivers in an activity-based cost (ABC)system? Explain how analysis of cost drivers can be useful in identifying inefficient activities and the cause(s)of the inefficiency?

How can service efforts and accomplishments (SEA)indicators be useful in improving budgeting?