Question 1

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.

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.

Question 3

The most significant financial document provided by a government is the

Accepted Answer

A) Balance sheet. 
B) Operating statement. 
C) Operating budget. 
D) Cash flow statement. 
A) Balance sheet. 
B) Operating statement. 
C) Operating budget. 
D) Cash flow statement.

Question 4

Johnson City prepares its budget on the cash basis and prepares its external financial statements on the accrual basis.From the following data prepare statements of activity (income statements)on both the cash basis and the accrual basis.Which statement best represents the results of operations of the City? Which statement best demonstrates compliance with laws and regulations? Which statement would you rather see? Which conveys the best information to the citizens of Johnson City?
The City levies taxes in the current year of $1 million.Of this amount $.9 million is collected during the current year, $.05 will be collected next year, and $.04 will be collected in the future.$.01 will never be collected.During the current year the City pays bills from prior periods $.06 million, bills of the current period $.8 million, and defers payment until future periods on bills that were received for services consumed during the current period $.1 million.

Accepted Answer

Johnson City financial statements would

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

A not-for-profit entity raises funds to support specific programs, services, and activities.The recipients of the programs, services, and activities are frequently not the providers of the resources needed to deliver the programs, services, and activities.What information would donors to these not-for-profit entities be interested in seeing? What information would program beneficiaries be interested in seeing? Identify other users of the financial statements of a not-for-profit and the types of information in which they would be interested.

Accepted Answer

Donors to not-for-profit (NFP)entities a

Question 7

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

Accepted Answer

A) To ensure 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 ensure 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 8

What are some of the definitional criteria that distinguish a state or local government from a not-for-profit entity?

Accepted Answer

First, and foremost, state and local gov

Question 9

Which of the following activities is NOT an activity in which a government 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 10

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 11

Thorn County adopted a cash budget for FY2010 as follows.The City budget laws prohibit budgeting or operating at a deficit.During the year the County collected or spent the following amounts.Was the County in compliance with budget laws? Did the County accomplish the goal of interperiod equity? Explain your answers in detail.   Explanations provided by the City for the differences between budget and actual are as follows.Property tax collections are down because the major industry in the community closed and many citizens are currently unemployed.Operating expenses are up because the only bridge over a river bisecting the City sustained damages by an uninsured motorist and had to be repaired immediately.The repair was not budgeted.

Accepted Answer

The City adopted a cash budget that proj

Question 12

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 the resources owned by the government. 
B) All the resources that may be summoned by the government. 
C) Demographic data about the residents served by the government. 
D) All of the above. 
A) All the resources owned by the government. 
B) All the resources that may be summoned by the government. 
C) Demographic data about the residents served by the government. 
D) All of the above.

Question 13

Which of the following objectives is considered the cornerstone of financial reporting by a state or local government?

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 14

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

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

As used by the 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 government'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 government's legally adopted budget. 
D) Provide information to assist users in assessing the government's economy, efficiency, and effectiveness.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) Determining whether or not the government has a balanced budget. 
B) Determining whether or not the government 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 government has a balanced budget. 
B) Determining whether or not the government 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 19

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

Accepted Answer

A) True 
 B)False

Question 20

How does the FASB influence generally accepted accounting principles for state and local governments?

Accepted Answer

The FASB influences generally accepted a

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

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

The most significant financial document provided by a government is the

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

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

What are some of the definitional criteria that distinguish a state or local government from a not-for-profit entity?

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

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

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 objectives is considered the cornerstone of financial reporting by a state or local government?

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?

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

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

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

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

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

How does the FASB influence generally accepted accounting principles for state and local governments?

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

Pensions and Other Fiduciary Activities

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Notforprofit Organizations

Federal Government Accounting

Filters

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

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

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

The most significant financial document provided by a government is the

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

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

What are some of the definitional criteria that distinguish a state or local government from a not-for-profit entity?

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

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

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 objectives is considered the cornerstone of financial reporting by a state or local government?

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?

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

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

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

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

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

How does the FASB influence generally accepted accounting principles for state and local governments?

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

Pensions and Other Fiduciary Activities

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Notforprofit Organizations

Federal Government Accounting

Filters