Get a free trial of IconCMO now! 30 days - No credit card required. Church Accounting Quiz To start the quiz, click the blue ‘Start’ button below. 24 Created on January 07, 2021 Church Accounting Quiz This quiz will test a person's church accounting knowledge. Your results are for personal use and only available to you. 1 / 15 Category: General Accounting Questions Question:Does QuickBooks follow the FASB (Financial Accounting Standard Board) standards for church accounting as outline in the FAS Topic 958? Yes No The work around for Quickbooks and funds is to use classes. However, according to Quickbooks own site they say this about classes.The Balance Sheet by Class report can’t classify some transactions in QuickBooks. Some of those transactions create unclassified amounts on the report.By not classifying every single transaction's disbursements, your balance sheet will never be right. Some of the transactions that can't be classified are journal entries with unbalanced classes, a payroll liability check, and transfer of funds between two church funds. 2 / 15 Category: General Accounting Questions Question:The church pays cash for a contractor's services to fix something in the building. Recording the withdrawal would result what kind of change in the accounting books? Increase in assets and increase in liabilities. Decrease in an asset and decrease in fund equity. Increase in one asset and a decrease in another asset. None of the above. When the church pays for a service, money leaves the organization from an asset account which indirectly lowers the equity (or fund balance). 3 / 15 Category: General Accounting Questions Question:What are the disadvantages of using revenue accounts to track funds? The church is not able to produce financial statements by fund. The church is not properly reporting the Net Asset section of the Statement of Financial Position. Using revenue accounts for funds forces the church to have more than one checkbook to see balances, thus forcing the church to dedicate unnecessary resources to checkbook maintenance like monthly reconciliations for each checkbook. All of the above To fully understand this question the user must understand the fund accounting principles. They would want to review the What is Fund Accounting article. Simply stated using revenue accounts has too many problems to figure out how much each church function (ie mission) has to spend or has spent. 4 / 15 Category: General Accounting Questions Question:The financial statement that reports amounts as of a particular date (ie. an end date) is the? Statement of Financial Activities Statement of Financial Position Cash Flow Report Budget Report The statement of financial position is the only report that gives you the dollar amounts as of one point in time. This is commonly called the balance sheet in for profit companies. The other financial statements like statement of activities and cash flow report show how the money came into the company and left the company. The budget report is not considered a financial report. 5 / 15 Category: Balance Sheet Questions Question:In fund accounting, the Statement of Financial Position is equivalent to the... income statement. balance sheet. the statement of owner's equity. the statement of cash flow. According to FAS Topic 958 the Statement of Activities is equivalent to the income statement that for profit industries use. 6 / 15 Category: General Accounting Questions Question:Which account is not included on a statement of financial position? Accounts receivable Accounts payable Donation revenue Cash Donation revenue (or any revenue) accounts are not reported on the balance sheet. 7 / 15 Category: General Accounting Questions Question:Are churches exempt from all federal income taxes? No Yes Churches are not exempt from the UBIT (Unrelated Business Income Tax). If they have gross receipts of over $1,000.00 they must file a tax form. This pdf goes over what UBIT and gives some clear examples. As always consult a CPA for your church's unique operation. 8 / 15 Category: General Accounting Questions Question:Should multiple checkbooks be used to track funds and their balances? No Yes When multiple checkbooks (or worst sub accounts of checkbooks) are used, that means the system can't do proper fund accounting. It can't take the assets account (the checkbook) and break it up into various funds - or equity pieces. Using any type of accounts in the chart of accounts to define the funds is incorrect. They belong in the equity section. To read more, check this article out. 9 / 15 Category: General Accounting Questions Question:Fund Accounting is an accounting system used by nonprofit organizations and governments. It places an emphasis on ___________ rather than profitability. paying debts increasing contributions accountability none of the above The definition of fund accounting that is used in non profits is the following:"Fund accounting is an accounting system for recording resources whose use has been limited by the donor, grant authority, governing agency, or other individuals or organizations or by law. It emphasizes accountability rather than profitability, and is used by Nonprofit organizations and by governments. In this method, a fund consists of a self-balancing set of accounts and each are reported as either unrestricted, temporarily restricted or permanently restricted based on the provider-imposed restrictions." 10 / 15 Category: General Accounting Questions Question:Are accounting funds and contribution funds different? Yes No Donation funds and accounting funds are different. You will want to review this article. Donation funds are reported on differently than accounting funds for example. Donation funds start over each year. Accounting funds carry a balance forward each year. This is just one difference. 11 / 15 Category: Accounting Entries Question:You have to record an entry to pay for the monthly church van loan. Which accounts are needed? A loan liability, an interest expense, and checkbook account. A checkbook and loan liability account. A checkbook and expense account. A checkbook, revenue, and loan liability account. 12 / 15 Category: General Accounting Questions Question:At the end of accounting period the liabilities total $20,000, and equity totals $52,000, then what must be the total of the assets? $52,000 $32,000 $72,000 None of these Liabilities plus equity will equal assets. This comes down to the balance sheet equation where Liabilities + equity equals assets. 13 / 15 Category: General Accounting Questions Question:What does GAAP stand for? generalized accounting and practice generally accepted accountant person generally accepted accounting principles generally applicable accounting principles GAAP stands for Generally Accepted Accounting Principles. See the definition at the CFA Institute. Keep in mind all churches must follow GAAP. 14 / 15 Category: General Accounting Questions Question:What are the two accounting methodologies that organizations use? (select two) Hybrid Cash accounting The balancing method Accrual methodology There are two main accounting methods called cash accounting and accrual. See Investopedia. 15 / 15 Category: General Accounting Questions Question:In what section of the statement of activities is contributions recorded under? expenses revenues service fees Contributions (donations) is revenue to the church. 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