Question 1

Governmental entities have no need for an accounting system.

Accepted Answer

A) True 
 B)False  False

Question 2

The primary standard-setting body for accounting and financial reporting by a state-supported college or university is:

Accepted Answer

A) GASB. 
B) FASB. 
C) AICPA. 
D) All of the above. 
A) GASB. 
B) FASB. 
C) AICPA. 
D) All of the above. A

Question 3

As used by GASB, interperiod equity refers to which of the following? Financial reporting should:

Accepted Answer

A) Demonstrate compliance with finance-related contractual requirements. 
B) Provide information to determine whether current-year revenues were sufficient to pay for current-year services. 
C) Demonstrate whether resources were obtained and used in accordance with the entity's legally adopted budget. 
D) Provide information to assist users in assessing the government's economy, efficiency, and effectiveness. 
A) Demonstrate compliance with finance-related contractual requirements. 
B) Provide information to determine whether current-year revenues were sufficient to pay for current-year services. 
C) Demonstrate whether resources were obtained and used in accordance with the entity's legally adopted budget. 
D) Provide information to assist users in assessing the government's economy, efficiency, and effectiveness. B

Question 4

In descending order, the hierarchy of GAAP applicable to a church-owned college may be:

Accepted Answer

A) FASB Statements and Interpretations, FASB Technical Bulletins, AICPA Industry Audit Guides, FASB Implementation Guides, other accounting literature-including GASB Standards. 
B) FASB Statements and Interpretations, FASB Technical Bulletins, FASB Implementation Guides, AICPA Practice Bulletins if cleared by FASB. 
C) GASB Statements and Interpretations, AICPA Industry Audit Guides, GASB Implementation Guides, other accounting literature-including FASB Standards. 
D) GASB Statements and Interpretations, GASB Technical Bulletins, AICPA Industry Audit Guides, AICPA Practice Bulletins if cleared by GASB, GASB Implementation Guides, other accounting literature-including FASB standards. 
A) FASB Statements and Interpretations, FASB Technical Bulletins, AICPA Industry Audit Guides, FASB Implementation Guides, other accounting literature-including GASB Standards. 
B) FASB Statements and Interpretations, FASB Technical Bulletins, FASB Implementation Guides, AICPA Practice Bulletins if cleared by FASB. 
C) GASB Statements and Interpretations, AICPA Industry Audit Guides, GASB Implementation Guides, other accounting literature-including FASB Standards. 
D) GASB Statements and Interpretations, GASB Technical Bulletins, AICPA Industry Audit Guides, AICPA Practice Bulletins if cleared by GASB, GASB Implementation Guides, other accounting literature-including FASB standards.

Question 5

Which of the following is NOT a purpose of external financial reporting by governments? External financial reports should allow users to

Accepted Answer

A) Assess financial condition. 
B) Compare actual results with the budget. 
C) Assess the ability of elected officials to effectively manage people. 
D) Evaluate efficiency and effectiveness. 
A) Assess financial condition. 
B) Compare actual results with the budget. 
C) Assess the ability of elected officials to effectively manage people. 
D) Evaluate efficiency and effectiveness.

Question 6

Which of the following activities is NOT an activity in which a governmental entity might engage?

Accepted Answer

A) Selling electric power. 
B) Operating a golf course. 
C) Operating a bookstore. 
D) All of the above are activities that might be carried out by a government. 
A) Selling electric power. 
B) Operating a golf course. 
C) Operating a bookstore. 
D) All of the above are activities that might be carried out by a government.

Question 7

The Governmental Accounting Standards Board establishes generally accepted accounting principles for all state and local government entities, as well as all not-for-profit entities.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is NOT generally considered a main user of government and not-for-profit entity external financial statements?

Accepted Answer

A) Investors and creditors. 
B) Taxpayers. 
C) Donors. 
D) Internal managers. 
A) Investors and creditors. 
B) Taxpayers. 
C) Donors. 
D) Internal managers.

Question 9

A primary characteristic that distinguishes not-for-profit entities from business entities is

Accepted Answer

A) The need to generate revenues equal to or in excess of expenditures/expenses. 
B) The importance of the budget in the governing process. 
C) The need to provide goods or services. 
D) The correlation between revenues generated and demand for goods or services. 
A) The need to generate revenues equal to or in excess of expenditures/expenses. 
B) The importance of the budget in the governing process. 
C) The need to provide goods or services. 
D) The correlation between revenues generated and demand for goods or services.

Question 10

The basis of accounting selected by or imposed on a governmental entity can influence which of the following?

Accepted Answer

A) A decision to contract-out a specific service rather than provide that service itself. 
B) The amount of salary increases proposed by union negotiators. 
C) The amount that is available to spend on a donor-specified project or service. 
D) All of the above. 
A) A decision to contract-out a specific service rather than provide that service itself. 
B) The amount of salary increases proposed by union negotiators. 
C) The amount that is available to spend on a donor-specified project or service. 
D) All of the above.

Question 11

The Financial Accounting Standards Advisory Board's standards do not apply to the federal Department of Treasury.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is an objective of financial reporting by governmental entities as established by GASB?

Accepted Answer

A) Financial reporting should assist users in assessing the management skills of top management. 
B) Financial reporting should assist users in determining if current-period revenues were sufficient to pay for current-period services. 
C) Financial reporting should assist users in evaluating the cash management operations of the governmental entity for the year. 
D) Financial reporting should assist users in assessing whether the government provided appropriate services to its constituents in the current year. 
A) Financial reporting should assist users in assessing the management skills of top management. 
B) Financial reporting should assist users in determining if current-period revenues were sufficient to pay for current-period services. 
C) Financial reporting should assist users in evaluating the cash management operations of the governmental entity for the year. 
D) Financial reporting should assist users in assessing whether the government provided appropriate services to its constituents in the current year.

Question 13

A primary characteristic that distinguishes governmental entities from business entities is

Accepted Answer

A) The need to generate revenues equal to or in excess of expenditures/expenses. 
B) The importance of the budget in the governing process. 
C) The need to provide goods or services. 
D) The correlation between revenues generated and demand for goods or services. 
A) The need to generate revenues equal to or in excess of expenditures/expenses. 
B) The importance of the budget in the governing process. 
C) The need to provide goods or services. 
D) The correlation between revenues generated and demand for goods or services.

Question 14

Users of government financial statements should be interested in information about compliance with laws and regulations for which of the following reasons?

Accepted Answer

A) To determine if the entity has complied with bond covenants. 
B) To determine if the entity has complied with taxing limitations. 
C) To determine if the entity has complied with donor restrictions on the use of funds. 
D) To determine all of the above. 
A) To determine if the entity has complied with bond covenants. 
B) To determine if the entity has complied with taxing limitations. 
C) To determine if the entity has complied with donor restrictions on the use of funds. 
D) To determine all of the above.

Question 15

A government's budget may be backed by the force of law.

Accepted Answer

A) True 
 B)False

Question 16

Financial statements, no matter how prepared, do not directly affect the economic worth of an entity.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following characteristics distinguishes a governmental or not-for-profit entity from a business entity?

Accepted Answer

A) There is always a direct link between revenues generated and expenditures/expenses incurred. 
B) Capital assets are used to produce revenues and save costs. 
C) Revenues are always indicative of demand for goods and services. 
D) The mission of the entity will determine the goods or services provided. 
A) There is always a direct link between revenues generated and expenditures/expenses incurred. 
B) Capital assets are used to produce revenues and save costs. 
C) Revenues are always indicative of demand for goods and services. 
D) The mission of the entity will determine the goods or services provided.

Question 18

Which of the following characteristics is unique to a governmental entity?

Accepted Answer

A) The ability to have activities financed with tax-exempt debt. 
B) The power to impose fees. 
C) The ability to issue tax-exempt debt. 
D) The ability to have activities financed by Federal grants. 
A) The ability to have activities financed with tax-exempt debt. 
B) The power to impose fees. 
C) The ability to issue tax-exempt debt. 
D) The ability to have activities financed by Federal grants.

Question 19

Given a specific set of data, the basis of accounting selected by or imposed on a governmental entity will least affect which of the following?

Accepted Answer

A) Determining whether or not the governmental entity has a balanced budget. 
B) Determining whether or not the governmental entity has the ability to issue debt. 
C) Determining whether or not certain economic events occurred. 
D) Determining the annual payments to a government-sponsored pension plan. 
A) Determining whether or not the governmental entity has a balanced budget. 
B) Determining whether or not the governmental entity has the ability to issue debt. 
C) Determining whether or not certain economic events occurred. 
D) Determining the annual payments to a government-sponsored pension plan.

Question 20

Which of the following is common to both governments and not-for-profit entities but distinguishes these entities from for-profit entities?

Accepted Answer

A) The budget is a legal, financial document. 
B) Revenues are usually indicative of demand for goods or services. 
C) There is direct matching of revenues and expenses. 
D) There are no defined ownership interests. 
A) The budget is a legal, financial document. 
B) Revenues are usually indicative of demand for goods or services. 
C) There is direct matching of revenues and expenses. 
D) There are no defined ownership interests.

Governmental entities have no need for an accounting system.

The primary standard-setting body for accounting and financial reporting by a state-supported college or university is:

As used by GASB, interperiod equity refers to which of the following? Financial reporting should:

In descending order, the hierarchy of GAAP applicable to a church-owned college may be:

Which of the following is NOT a purpose of external financial reporting by governments? External financial reports should allow users to

Which of the following activities is NOT an activity in which a governmental entity might engage?

The Governmental Accounting Standards Board establishes generally accepted accounting principles for all state and local government entities, as well as all not-for-profit entities.

Which of the following is NOT generally considered a main user of government and not-for-profit entity external financial statements?

A primary characteristic that distinguishes not-for-profit entities from business entities is

The basis of accounting selected by or imposed on a governmental entity can influence which of the following?

The Financial Accounting Standards Advisory Board's standards do not apply to the federal Department of Treasury.

Which of the following is an objective of financial reporting by governmental entities as established by GASB?

A primary characteristic that distinguishes governmental entities from business entities is

Users of government financial statements should be interested in information about compliance with laws and regulations for which of the following reasons?

A government's budget may be backed by the force of law.

Financial statements, no matter how prepared, do not directly affect the economic worth of an entity.

Which of the following characteristics distinguishes a governmental or not-for-profit entity from a business entity?

Which of the following characteristics is unique to a governmental entity?

Given a specific set of data, the basis of accounting selected by or imposed on a governmental entity will least affect which of the following?

Which of the following is common to both governments and not-for-profit entities but distinguishes these entities from for-profit entities?

Fund Accounting

Issues of Budgeting and Control

Recognizing Revenues in Governmental Funds

Recognizing Expenditures in Governmental Funds

Accounting for Capital Projects and Debt Service

Capital Assets and Investments in Marketable Securities

Long-Term Obligations

Business-Type Activities

Fiduciary Funds and Permanent Funds

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Not-For-Profit Organizations

Federal Government Accounting

Filters

Exam 1: The Government and Not-For-Profit Environment

Governmental entities have no need for an accounting system.

The primary standard-setting body for accounting and financial reporting by a state-supported college or university is:

As used by GASB, interperiod equity refers to which of the following? Financial reporting should:

In descending order, the hierarchy of GAAP applicable to a church-owned college may be:

Which of the following is NOT a purpose of external financial reporting by governments? External financial reports should allow users to

Which of the following activities is NOT an activity in which a governmental entity might engage?

The Governmental Accounting Standards Board establishes generally accepted accounting principles for all state and local government entities, as well as all not-for-profit entities.

Which of the following is NOT generally considered a main user of government and not-for-profit entity external financial statements?

A primary characteristic that distinguishes not-for-profit entities from business entities is

The basis of accounting selected by or imposed on a governmental entity can influence which of the following?

The Financial Accounting Standards Advisory Board's standards do not apply to the federal Department of Treasury.

Which of the following is an objective of financial reporting by governmental entities as established by GASB?

A primary characteristic that distinguishes governmental entities from business entities is

Users of government financial statements should be interested in information about compliance with laws and regulations for which of the following reasons?

A government's budget may be backed by the force of law.

Financial statements, no matter how prepared, do not directly affect the economic worth of an entity.

Which of the following characteristics distinguishes a governmental or not-for-profit entity from a business entity?

Which of the following characteristics is unique to a governmental entity?

Given a specific set of data, the basis of accounting selected by or imposed on a governmental entity will least affect which of the following?

Which of the following is common to both governments and not-for-profit entities but distinguishes these entities from for-profit entities?

Fund Accounting

Issues of Budgeting and Control

Recognizing Revenues in Governmental Funds

Recognizing Expenditures in Governmental Funds

Accounting for Capital Projects and Debt Service

Capital Assets and Investments in Marketable Securities

Long-Term Obligations

Business-Type Activities

Fiduciary Funds and Permanent Funds

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Not-For-Profit Organizations

Federal Government Accounting

Filters