Question 1

How is the Unrelated Business Income Tax computed?

Accepted Answer

When computing unrelated business income

Question 2

A tax-exempt organization must pay income taxes on income generated from trade or business activities unrelated to the entity's tax-exempt purposes.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is true regarding the Single Audit Act and its amendments?

Accepted Answer

A)  A risk-based approach is used. 
B)  An opinion is required on compliance of all programs. 
C)  Both A and B above. 
D)  Neither A nor B above. 
A)  A risk-based approach is used. 
B)  An opinion is required on compliance of all programs. 
C)  Both A and B above. 
D)  Neither A nor B above.

Question 4

Which of the following applies to governmental auditing and not private sector auditing?

Accepted Answer

A)  The public availability of audit reports. 
B)  Testing of compliance with laws and regulations. 
C)  Governmental audits require auditor knowledge of government accounting and auditing. 
D)  None of the above; these are all required for governmental auditing and not private sector auditing. 
A)  The public availability of audit reports. 
B)  Testing of compliance with laws and regulations. 
C)  Governmental audits require auditor knowledge of government accounting and auditing. 
D)  None of the above; these are all required for governmental auditing and not private sector auditing.

Question 5

Entities that are tax-exempt under IRS Section 501c3 are prohibited from having surpluses revenues exceed expenses.

Accepted Answer

A) True 
 B)False

Question 6

Churches, schools and hospitals are public charities.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a governmental audit type that has a primary concern with providing reasonable assurance about whether financial statements are presented fairly?

Accepted Answer

A)  Attestation Engagement. 
B)  Performance Audit. 
C)  Nonaudit services. 
D)  Financial Audit. 
A)  Attestation Engagement. 
B)  Performance Audit. 
C)  Nonaudit services. 
D)  Financial Audit.

Question 8

When computing Unrelated Business Income Tax, charities are permitted to deduct ordinary and necessary business related expenses and the first $1,000 of income is not taxed.

Accepted Answer

A) True 
 B)False

Question 9

To apply for tax-exempt status, an organization must complete an IRS Form 1023.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

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

Question 11

According to GASB, Service Efforts and Accomplishments Reporting is to provide more complete information about a governmental entity's performance.

Accepted Answer

A) True 
 B)False

Question 12

Governmental attestation engagements must comply with the Government Auditing Standards but are exempt from compliance with the AICPA's attestation standards.

Accepted Answer

A) True 
 B)False

Question 13

What is the maximum threshold for a tax-exempt organization to file a form 990-N electronic postcard for tax years after 2011?

Accepted Answer

A)  A charity with gross receipts less than $25,000. 
B)  A charity with gross receipts less than $50,000. 
C)  A charity with gross receipts less than $200,000. 
D)  A charity with gross receipts less than $500,000. 
A)  A charity with gross receipts less than $25,000. 
B)  A charity with gross receipts less than $50,000. 
C)  A charity with gross receipts less than $200,000. 
D)  A charity with gross receipts less than $500,000.

Question 14

Beginning in 2012, entities that are tax-exempt under IRS Section 501c3 with gross receipts less than $75,000 may file Form 990-N electronic postcard.

Accepted Answer

A) True 
 B)False

Question 15

Government financial audits must comply with the following:

Accepted Answer

A)  Generally Accepted Auditing Standards. 
B)  Government Auditing Standards. 
C)  Both A and B. 
D)  Generally Accepted Accounting Principles. 
A)  Generally Accepted Auditing Standards. 
B)  Government Auditing Standards. 
C)  Both A and B. 
D)  Generally Accepted Accounting Principles.

Question 16

If a tax-exempt organization is found by the IRS to have paid unreasonable benefits, the individual must pay a tax penalty of 25% of the excess benefit and the individuals who approved the benefits must pay a 10% penalty.

Accepted Answer

A) True 
 B)False

Question 17

are required to file Form 990 by the 15th day of the 9th month following the organization's taxable year.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Which organization promulgates the Government Auditing Standards?

Accepted Answer

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

Question 20

In order to compute the operating ratio-enterprise funds, one would look in the CAFR in which of the following sections?

Accepted Answer

A)  In the government-wide Statement of Net Position. 
B)  In the proprietary funds Statement of Net Position. 
C)  In the proprietary funds Statement of Revenues, Expenses, and Changes in Fund Net Position. 
D)  In the proprietary funds Statement of Cash Flows. 
A)  In the government-wide Statement of Net Position. 
B)  In the proprietary funds Statement of Net Position. 
C)  In the proprietary funds Statement of Revenues, Expenses, and Changes in Fund Net Position. 
D)  In the proprietary funds Statement of Cash Flows.

How is the Unrelated Business Income Tax computed?

A tax-exempt organization must pay income taxes on income generated from trade or business activities unrelated to the entity's tax-exempt purposes.

Which of the following is true regarding the Single Audit Act and its amendments?

Which of the following applies to governmental auditing and not private sector auditing?

Entities that are tax-exempt under IRS Section 501c3 are prohibited from having surpluses revenues exceed expenses.

Churches, schools and hospitals are public charities.

Which of the following is a governmental audit type that has a primary concern with providing reasonable assurance about whether financial statements are presented fairly?

When computing Unrelated Business Income Tax, charities are permitted to deduct ordinary and necessary business related expenses and the first $1,000 of income is not taxed.

To apply for tax-exempt status, an organization must complete an IRS Form 1023.

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

According to GASB, Service Efforts and Accomplishments Reporting is to provide more complete information about a governmental entity's performance.

Governmental attestation engagements must comply with the Government Auditing Standards but are exempt from compliance with the AICPA's attestation standards.

What is the maximum threshold for a tax-exempt organization to file a form 990-N electronic postcard for tax years after 2011?

Beginning in 2012, entities that are tax-exempt under IRS Section 501c3 with gross receipts less than $75,000 may file Form 990-N electronic postcard.

Government financial audits must comply with the following:

If a tax-exempt organization is found by the IRS to have paid unreasonable benefits, the individual must pay a tax penalty of 25% of the excess benefit and the individuals who approved the benefits must pay a 10% penalty.

are required to file Form 990 by the 15th day of the 9th month following the organization's taxable year.

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

Which organization promulgates the Government Auditing Standards?

In order to compute the operating ratio-enterprise funds, one would look in the CAFR in which of the following sections?

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 Funds, Interfund Transactions

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

How is the Unrelated Business Income Tax computed?

A tax-exempt organization must pay income taxes on income generated from trade or business activities unrelated to the entity's tax-exempt purposes.

Which of the following is true regarding the Single Audit Act and its amendments?

Which of the following applies to governmental auditing and not private sector auditing?

Entities that are tax-exempt under IRS Section 501c3 are prohibited from having surpluses revenues exceed expenses.

Churches, schools and hospitals are public charities.

Which of the following is a governmental audit type that has a primary concern with providing reasonable assurance about whether financial statements are presented fairly?

When computing Unrelated Business Income Tax, charities are permitted to deduct ordinary and necessary business related expenses and the first $1,000 of income is not taxed.

To apply for tax-exempt status, an organization must complete an IRS Form 1023.

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

According to GASB, Service Efforts and Accomplishments Reporting is to provide more complete information about a governmental entity's performance.

Governmental attestation engagements must comply with the Government Auditing Standards but are exempt from compliance with the AICPA's attestation standards.

What is the maximum threshold for a tax-exempt organization to file a form 990-N electronic postcard for tax years after 2011?

Beginning in 2012, entities that are tax-exempt under IRS Section 501c3 with gross receipts less than $75,000 may file Form 990-N electronic postcard.

Government financial audits must comply with the following:

If a tax-exempt organization is found by the IRS to have paid unreasonable benefits, the individual must pay a tax penalty of 25% of the excess benefit and the individuals who approved the benefits must pay a 10% penalty.

are required to file Form 990 by the 15th day of the 9th month following the organization's taxable year.

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

Which organization promulgates the Government Auditing Standards?

In order to compute the operating ratio-enterprise funds, one would look in the CAFR in which of the following sections?

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 Funds, Interfund Transactions

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