ACC 410 FINAL PART 2

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The County Commission appoints a voting majority of the members of the Board of a
particular organization. The County Commission cannot impose its will upon the organization.
There is no potential for the organization to provide any financial benefit to the County nor is
there is any potential for the organization to impose any financial burden on the county. The
organization is an example of a:

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The County created a legally separate County Hospital authority. Members of the board of
the County Hospital are elected in county-wide elections. The hospital receives no financial
support from the County, except that the County pays the hospital bills for county indigents. All
revenues of the Hospital are user fees. The County Hospital would be considered a
The City created a legally separate entity to operate a County Hospital. The City Council
appoints a voting majority of the board of the Hospital. The City cannot impose its will on the
Hospital and there is no potential for a financial benefit or financial burden to the City. The
County Hospital would be a
The City created a legally separate Port Authority. Members of the board of the Port
Authority are elected in general city elections. The Port Authority receives no tax dollars; it is
supported entirely by user fees. The Port Authority determines its budget, sets user fees, and
has the power to issue bonded debt. In what manner would the Port Authority be included in
the Citys Basic Financial Statements?
With regard to combining statements, which of the following statements is true?
The National Association for the Preservation of Wildlife received $10,000 from a benefactor
to support the overall objective of the organization. This amount will be recognized as revenue
A not-for-profit Art Museum that has elected not to capitalize its art collection receives a
donation of a rare piece of Tlinket Indian art. The donor paid $8,000 for the piece several years
ago. Today the piece has an estimated fair value of $50,000. What entry should the Art
Museum make upon receipt of this donation?
The basis of accounting used by not-for-profit organizations in their external financial reports
is
Not-for-profit organizations should report interest and dividends earned and restricted for
long-term purposes in which of the following categories?
Grace Church, a nondenominational not-for-profit entity, operates a school in connection with
the Church. This year members of the Church decided to construct a new wing on the school
with six classrooms. The Church hired an architect and a construction supervisor. The bulk of
the labor for construction was donated by Church members who were willing workers but not
necessarily skilled carpenters. Materials for the construction cost $300,000 and the paid labor
was $100,000. The fair value of the completed building is $1 million. When the building is

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completed what should be the balance in the asset account Building and the account
Contributed Revenue.
Intermountain Hospital, a not-for-profit health care provider, issued $70 million in term bonds
to finance construction of a new wing at its main hospital. Terms of the bond issue require that
$5 million of the proceeds of the bond issue be invested in U.S. government securities. The $5
million must be held until maturity of the bonds. The $5 million will increase which class of net
assets?
Kale Hospital, a not-for-profit entity, received a pledge from a donor in support of a fund
raising effort by the Hospital to finance construction of a new facility for cancer treatment. The
donor promised to pay $1 million in equal annual installments of $100,000 over the next 10
years. The present value of the gift at the risk-free interest rate is $736,000. The amount of
restricted revenue that should be recognized by Kale in the year of the gift is
During the current year, Jones University received a $50,000 gift from an alumnae who
specified that it must be used to pay travel costs for faculty to attend health care conferences in
foreign countries. During the year the university spent $8,000 to support travel to a health care
conference in Italy. The $8,000 disbursement will cause a NET decrease in which class of net
assets?
An accountant has encountered a perplexing financial reporting issue related to the private
college for which he is preparing financial statements. The issue is not specifically addressed
by FASB Statements. To what standards would the accountant now look for guidance?
Kale Hospital, a not-for-profit entity, received a pledge from a donor in support of a fund
raising effort by the Hospital to finance construction of a new facility for cancer treatment. The
donor promised to pay $1 million in equal annual installments of $100,000 over the next 10
years. The present value of the gift at the risk-free interest rate is $736,000. The amount of
unrestricted revenue that should be recognized by Kale in the year of the gift is
Auditors who perform government audits must complete 80 hours of continuing professional
education every two years, of which ____ hours must be related directly to government auditing.
Federal funds must be used only for activities that are within the scope of the grant would be
a(n)
Per the GAO standards, an auditors working papers must
Which of the following is a Yellow Book standard in respect to independence?
Government Auditing Standards characterizes government engagements into which of the
following three categories?
The city council of the City of Highland Hills has adopted a policy of aggressively pursuing
grants and other resource inflows from other levels of government. Over the past several years,
the proportion of total City revenues that comes from other levels of government has been
steadily increasing. As a consequent of these increased revenues, the City has begun offering
a number of new services to the citizens of the City. In assessing the financial condition of the
City of Highland Hills, an analyst would conclude which of the following?
Which of the following would generally be considered to be an indication of future economic
problems for a City?
Which of the following is generally considered to be a positive fiscal characteristic for a City?
Accountants are actively involved in collecting and analyzing data to be used by public policy
makers. Which of the following other groups might also be involved in the data collection and
analysis process?
In performing a financial analysis of a city, the financial analyst