Dire-Dawa University

College of Business and Economics

Department of Accounting and Finance
Accounting for Governmental and Nonprofit Entities test
Exam Weight: 10%
Allowed time: 25 min
Name: _____________________________________ ID: __________

Multiple Choice( 1.5 point each)

1. The activities of a water utility department, which offers its services to the general public
on a user charge basis, should be accounted for in
A. An enterprise fund. B. A special revenue fund.
B. The General Fund. D. An internal service fund.
2. Which of the following is not a characteristic of a fund?
A. Fiscal entity. C. Separate legal entity..
B. Accounting entity. D. Contains self-balancing set of accounts.
3. In accounting for state and local governments the modified accrual basis is required for
A. Proprietary and fiduciary funds. C. Governmental funds only.
B. Proprietary funds only. D. All funds.
4. Under the modified accrual basis of accounting, revenues should be recognized when
A. Earned. C. Collected in cash.
B. Authorized by the budget ordinance. D. Measurable and available.
5. Which of the following is a proprietary fund?
A. Special revenue fund. C. Investment trust fund.
B. Debt service fund. D. Internal service fund.
6. The measurement focus and basis of accounting that are most unlike those used by
business entities are those used by
A. Governmental funds. C. Fiduciary funds.
B. Proprietary funds. D. Contribution funds.

Short answer (5 point)

1) What is fund in fund accounting? (2 point)

2) List and explain the type of fund. (3 point)