Question 1

A regulatory agency would use the external financial statements of a local government for which of the following purposes?

Accepted Answer

A) To assure that the entity is spending and receiving resources in accordance with laws, regulations or policies. 
B) To determine how resources should be allocated. 
C) To exercise general oversight responsibility. 
D) To do all of the above. 
A) To assure that the entity is spending and receiving resources in accordance with laws, regulations or policies. 
B) To determine how resources should be allocated. 
C) To exercise general oversight responsibility. 
D) To do all of the above.

Question 2

Governments may be subject to the same pressures that led to accounting scandals like Enron.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following entities was a principal in creating the FASAB?

Accepted Answer

A) U.S.Congress. 
B) Office of Management and Budget. 
C) Governmental Accounting Standards Board. 
D) Securities and Exchange Commission. 
A) U.S.Congress. 
B) Office of Management and Budget. 
C) Governmental Accounting Standards Board. 
D) Securities and Exchange Commission.

Question 4

Which of the following is NOT a reason why users need governmental and not-for-profit external financial statements?

Accepted Answer

A) To determine the ability of the entity to meet its obligations. 
B) To determine the ability of the entity to continue to provide services. 
C) To predict future fiscal solvency. 
D) To evaluate the overall profitability of the entity. 
A) To determine the ability of the entity to meet its obligations. 
B) To determine the ability of the entity to continue to provide services. 
C) To predict future fiscal solvency. 
D) To evaluate the overall profitability of the entity.

Question 5

Lenders use the financial statements of governments and not-for profits just as they would those of businesses, that is, to help assess the borrower's credit-worthiness.

Accepted Answer

A) True 
 B)False

Question 6

Under certain circumstances a governmental entity might use standards established by which of the following standard-setting bodies?

Accepted Answer

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

Question 7

Governments and not-for-profits may never engage in business-type activities.

Accepted Answer

A) True 
 B)False

Question 8

The Governmental Accounting Standards Board is the primary standard-setting body for:

Accepted Answer

A) All governments. 
B) All state and local governments. 
C) All governments and all not-for-profit entities. 
D) All state and local governments and all not-for-profit entities. 
A) All governments. 
B) All state and local governments. 
C) All governments and all not-for-profit entities. 
D) All state and local governments and all not-for-profit entities.

Question 9

Which of the following constituency groups would be most likely to evaluate government financial statements to determine likely areas in which to achieve cost-savings?

Accepted Answer

A) Creditors. 
B) Union officials representing the government's employees. 
C) Federal agencies that provide purpose-restricted grants. 
D) Students of governmental accounting. 
A) Creditors. 
B) Union officials representing the government's employees. 
C) Federal agencies that provide purpose-restricted grants. 
D) Students of governmental accounting.

Question 10

Which of the following objectives is considered to be the cornerstone of financial reporting by a governmental entity?

Accepted Answer

A) Accountability. 
B) Budgetary compliance. 
C) Interperiod equity. 
D) Service efforts and accomplishments. 
A) Accountability. 
B) Budgetary compliance. 
C) Interperiod equity. 
D) Service efforts and accomplishments.

Question 11

The most significant financial document provided by a governmental entity is the

Accepted Answer

A) The balance sheet. 
B) The operating statement. 
C) The operating budget. 
D) The cash flow statement. 
A) The balance sheet. 
B) The operating statement. 
C) The operating budget. 
D) The cash flow statement.

Question 12

The main objective of a typical governmental or not-for-profit entity is to earn a profit.

Accepted Answer

A) True 
 B)False

Question 13

A government's internal managers rely on general purpose financial statements for a considerable amount of information about their government.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements is true?

Accepted Answer

A) Governments may engage in activities similar to activities engaged in by for-profit entities. 
B) There are a limited number of different types of governments. 
C) All governmental entities engage in the same activities. 
D) Managers may have a long-term focus and thereby sacrifice the short-term liquidity of the entity. 
A) Governments may engage in activities similar to activities engaged in by for-profit entities. 
B) There are a limited number of different types of governments. 
C) All governmental entities engage in the same activities. 
D) Managers may have a long-term focus and thereby sacrifice the short-term liquidity of the entity.

Question 15

To obtain a comprehensive understanding of a government's fiscal health, a financial analyst should obtain an understanding of which of the following?

Accepted Answer

A) All of the resources owned by the governmental entity. 
B) All of the resources which may be summoned by a governmental entity. 
C) Demographic data about the residents served by the governmental entity. 
D) All of the above. 
A) All of the resources owned by the governmental entity. 
B) All of the resources which may be summoned by a governmental entity. 
C) Demographic data about the residents served by the governmental entity. 
D) All of the above.

Question 16

Which of the following is an objective of financial reporting for not-for-profit entities as established by FASB? Financial reporting should provide information that is useful to present and potential resource providers and other users in:

Accepted Answer

A) Assessing the types of services provided and the need for those services. 
B) Assessing the services provided and the entity's ability to earn a profit. 
C) Making rational decisions about the allocation of resources to those organizations. 
D) Assessing how managers have managed personnel. 
A) Assessing the types of services provided and the need for those services. 
B) Assessing the services provided and the entity's ability to earn a profit. 
C) Making rational decisions about the allocation of resources to those organizations. 
D) Assessing how managers have managed personnel.

Question 17

In which of the following activities is a not-for-profit entity least likely to engage?

Accepted Answer

A) Providing educational services. 
B) Providing health-care services. 
C) Providing for terrorism defense. 
D) Retail sales of cookies. 
A) Providing educational services. 
B) Providing health-care services. 
C) Providing for terrorism defense. 
D) Retail sales of cookies.

Question 18

Which of the following can be affected by GAAP?

Accepted Answer

A) Legal ability to issue bonds. 
B) Ability to balance the budget. 
C) Amount reported as employee pension plan contributions. 
D) Claims and judgments settled. 
A) Legal ability to issue bonds. 
B) Ability to balance the budget. 
C) Amount reported as employee pension plan contributions. 
D) Claims and judgments settled.

Question 19

Which of the following is a probable use a donor would make of the external financial statements of a not-for-profit entity?

Accepted Answer

A) To determine the proportion of entity resources directed to programs as opposed to fund-raising. 
B) To determine the creditworthiness of the entity for investment purposes. 
C) To determine the salaries paid to all employees of the entity. 
D) To determine the budget of the entity. 
A) To determine the proportion of entity resources directed to programs as opposed to fund-raising. 
B) To determine the creditworthiness of the entity for investment purposes. 
C) To determine the salaries paid to all employees of the entity. 
D) To determine the budget of the entity.

A regulatory agency would use the external financial statements of a local government for which of the following purposes?

Governments may be subject to the same pressures that led to accounting scandals like Enron.

Which of the following entities was a principal in creating the FASAB?

Which of the following is NOT a reason why users need governmental and not-for-profit external financial statements?

Lenders use the financial statements of governments and not-for profits just as they would those of businesses, that is, to help assess the borrower's credit-worthiness.

Under certain circumstances a governmental entity might use standards established by which of the following standard-setting bodies?

Governments and not-for-profits may never engage in business-type activities.

The Governmental Accounting Standards Board is the primary standard-setting body for:

Which of the following constituency groups would be most likely to evaluate government financial statements to determine likely areas in which to achieve cost-savings?

Which of the following objectives is considered to be the cornerstone of financial reporting by a governmental entity?

The most significant financial document provided by a governmental entity is the

The main objective of a typical governmental or not-for-profit entity is to earn a profit.

A government's internal managers rely on general purpose financial statements for a considerable amount of information about their government.

Which of the following statements is true?

To obtain a comprehensive understanding of a government's fiscal health, a financial analyst should obtain an understanding of which of the following?

Which of the following is an objective of financial reporting for not-for-profit entities as established by FASB? Financial reporting should provide information that is useful to present and potential resource providers and other users in:

In which of the following activities is a not-for-profit entity least likely to engage?

Which of the following can be affected by GAAP?

Which of the following is a probable use a donor would make of the external financial statements of a not-for-profit entity?

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

A regulatory agency would use the external financial statements of a local government for which of the following purposes?

Governments may be subject to the same pressures that led to accounting scandals like Enron.

Which of the following entities was a principal in creating the FASAB?

Which of the following is NOT a reason why users need governmental and not-for-profit external financial statements?

Lenders use the financial statements of governments and not-for profits just as they would those of businesses, that is, to help assess the borrower's credit-worthiness.

Under certain circumstances a governmental entity might use standards established by which of the following standard-setting bodies?

Governments and not-for-profits may never engage in business-type activities.

The Governmental Accounting Standards Board is the primary standard-setting body for:

Which of the following constituency groups would be most likely to evaluate government financial statements to determine likely areas in which to achieve cost-savings?

Which of the following objectives is considered to be the cornerstone of financial reporting by a governmental entity?

The most significant financial document provided by a governmental entity is the

The main objective of a typical governmental or not-for-profit entity is to earn a profit.

A government's internal managers rely on general purpose financial statements for a considerable amount of information about their government.

Which of the following statements is true?

To obtain a comprehensive understanding of a government's fiscal health, a financial analyst should obtain an understanding of which of the following?

Which of the following is an objective of financial reporting for not-for-profit entities as established by FASB? Financial reporting should provide information that is useful to present and potential resource providers and other users in:

In which of the following activities is a not-for-profit entity least likely to engage?

Which of the following can be affected by GAAP?

Which of the following is a probable use a donor would make of the external financial statements of a not-for-profit entity?

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