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D250 ACCT 5201 Governmental & Nonprofit Accounting OBJECTIVE ASSESSMENT GUIDE Q & S 2026/2027
1. Which of the following is a primary source of funding for
governmental entities?
A) Donations
B) Grants
C) Taxes
D) Investments
Correct Answer: C) Taxes
Rationale : Taxes are the fundamental revenue source for
governmental entities, allowing them to fund public services.
2. In GASB standards, which fund type is primarily used for dayto-day operations?
A) Capital Projects Fund
B) Special Revenue Fund
C) General Fund
D) Debt Service Fund
Correct Answer: C) General Fund
Rationale : The General Fund is used for general operating
purposes and accounts for all financial resources except those
required to be accounted for in another fund.
3. Which of the following is NOT considered a component of net
position in government-wide financial statements?
A) Net investment in capital assets
B) Restricted net position
C) Unrestricted net position
D) Deferred inflows of resources
Correct Answer: D) Deferred inflows of resources
Rationale : Deferred inflows are not a component of net
position; they are separate elements on the balance sheet.
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