Question 1

FASAB standards preclude disclosure of investments in human capital in federal financial reports.

Accepted Answer

A) True 
 B)False  False

Question 2

Military assets are required to be capitalized and depreciated until war is declared.

Accepted Answer

A) True 
 B)False  False

Question 3

A federal environmental agency engaged in the following transactions during a particular year.
1. It billed corporations for which it provided services $160 million. Of this, it collected $140 million.
2. It levied $150 million in ﬁnes and penalties against corporations. Of this, $90 million was collected in cash. Of the balance, the protest period has expired on $35 million, which the agency expects to collect in the following year. The remaining $25 million is in dispute and court dates have not yet been set.
3. It collected an additional $20 million in ﬁnes and penalties that had been assessed by federal courts in the previous period.
4. It received cash donations of $3 million and pledges of an additional $2 million. The agency's counsel advises that the pledges are not legally enforceable.
REQUIRED:
a. Prepare journal entries to record the revenues and collections.
b. Show how the revenues and related receivables would be reported on the agency's balance sheet and statement of net cost (i.e., an operating statement).

Accepted Answer

a. Journal entries (Dollar amounts in millions)
   To record revenue from donations actually received and to recognize deferred revenue on those not received and not legally enforceable
b. Balance Sheet
   Operating Statement

Question 4

Which of the following is a function of the U.S. Department of the Treasury?

Accepted Answer

A)  Adjudicating claims for and against the federal government. 
B)  Monitoring the execution of the federal budget. 
C)  Overseeing the central accounting and reporting systems. 
D)  Apportioning federal appropriations. 
A)  Adjudicating claims for and against the federal government. 
B)  Monitoring the execution of the federal budget. 
C)  Overseeing the central accounting and reporting systems. 
D)  Apportioning federal appropriations.

Question 5

The CFO of the United States is

Accepted Answer

A)  A position within OMB. 
B)  A position within GAO. 
C)  A position in the Department of the Treasury. 
D)  A cabinet position reporting to the U.S. president. 
A)  A position within OMB. 
B)  A position within GAO. 
C)  A position in the Department of the Treasury. 
D)  A cabinet position reporting to the U.S. president.

Question 6

Federal agencies recognize the cost of loan guarantees when it is probable that borrowers will default on their payments.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is true of the International Public Sector Accounting Standards Board?

Accepted Answer

A)  It has been authorized by the United Nations to set accounting and financial reporting standards for all countries with representation in the U.N. 
B)  It has indicated that a country's financial statements should be on a cash basis or a modified accrual basis of accounting, consistent with the country's tradition, until all countries' accounting systems are more advanced. 
C)  It has indicated that the public sector standards promulgated by the GASB are broadly consistent with IPSASB standards. 
D)  It has shown little interest in convergence of its standards for governments with those promulgated by the International Accounting Standards Board for businesses. 
A)  It has been authorized by the United Nations to set accounting and financial reporting standards for all countries with representation in the U.N. 
B)  It has indicated that a country's financial statements should be on a cash basis or a modified accrual basis of accounting, consistent with the country's tradition, until all countries' accounting systems are more advanced. 
C)  It has indicated that the public sector standards promulgated by the GASB are broadly consistent with IPSASB standards. 
D)  It has shown little interest in convergence of its standards for governments with those promulgated by the International Accounting Standards Board for businesses.

Question 8

The Government Accountability Office (GAO) is part of which branch of the federal government?

Accepted Answer

A)  Executive branch. 
B)  Judicial branch. 
C)  Legislative branch. 
D)  None of the above; it is independent of all three branches of the federal government. 
A)  Executive branch. 
B)  Judicial branch. 
C)  Legislative branch. 
D)  None of the above; it is independent of all three branches of the federal government.

Question 9

The allowance for unrealized holding gains that appears in the cost of goods sold section of a federal financial statement effectively does which of the following?

Accepted Answer

A)  Adjusts the latest acquisition cost inventory valuation to the historical cost valuation. 
B)  Increases the cost of goods sold by the increase in market value of the inventory. 
C)  Decreases the cost of goods sold by the increase in market value of the inventory. 
D)  Adjusts the historical cost valuation to the latest acquisition cost inventory valuation. 
A)  Adjusts the latest acquisition cost inventory valuation to the historical cost valuation. 
B)  Increases the cost of goods sold by the increase in market value of the inventory. 
C)  Decreases the cost of goods sold by the increase in market value of the inventory. 
D)  Adjusts the historical cost valuation to the latest acquisition cost inventory valuation.

Question 10

The federal government is required to recognize liabilities from nonexchange transactions

Accepted Answer

A)  When an exchange takes place. 
B)  When the event occurs and the anticipated outflows of resources are both probable and measurable. 
C)  When due. 
D)  When formally acknowledged and an amount is due and payable as a result. 
A)  When an exchange takes place. 
B)  When the event occurs and the anticipated outflows of resources are both probable and measurable. 
C)  When due. 
D)  When formally acknowledged and an amount is due and payable as a result.

Question 11

Which of the following categories is included in the Objectives of Federal Financial Reporting?

Accepted Answer

A)  Operating performance. 
B)  Congressional performance. 
C)  Executive performance. 
D)  Audit performance. 
A)  Operating performance. 
B)  Congressional performance. 
C)  Executive performance. 
D)  Audit performance.

Question 12

The FASAB allows entities to value inventories held for sale at which of the following values?

Accepted Answer

A)  Historical cost, using FIFO. 
B)  Historical cost, using weighted average. 
C)  Latest acquisition cost. 
D)  All of the above. 
A)  Historical cost, using FIFO. 
B)  Historical cost, using weighted average. 
C)  Latest acquisition cost. 
D)  All of the above.

Question 13

Federal government accounting standards are the responsibility of which federal government agency?

Accepted Answer

A)  The Department of the Treasury. 
B)  The Office of Management and Budget. 
C)  The Government Accountability Office. 
D)  All of the above. 
A)  The Department of the Treasury. 
B)  The Office of Management and Budget. 
C)  The Government Accountability Office. 
D)  All of the above.

Question 14

Which of the following types of expenditures are not accounted for in the federal government's general fund?

Accepted Answer

A)  Operating expenditures. 
B)  Capital expenditures. 
C)  Medicare. 
D)  Interest on public debt. 
A)  Operating expenditures. 
B)  Capital expenditures. 
C)  Medicare. 
D)  Interest on public debt.

Question 15

Which of the following is a role that GAO plays in the accounting and information management policy of the United States?

Accepted Answer

A)  Prescribing standards for auditing and evaluating government programs. 
B)  Developing integrated accounting systems that comply with applicable accounting standards. 
C)  Apportioning federal appropriations. 
D)  Reviewing federal agencies' spending plans. 
A)  Prescribing standards for auditing and evaluating government programs. 
B)  Developing integrated accounting systems that comply with applicable accounting standards. 
C)  Apportioning federal appropriations. 
D)  Reviewing federal agencies' spending plans.

Question 16

The federal government has declared a specific area a "natural disaster" area, making residents of the area eligible for payments from the federal government. When should the liability for such payments be recorded?

Accepted Answer

A)  When an exchange takes place. 
B)  When the event occurs and the anticipated outflows of resources can be estimated. 
C)  When anticipated outflows of resources are both probable and measurable. 
D)  When formally acknowledged and an amount is due and payable as a result. 
A)  When an exchange takes place. 
B)  When the event occurs and the anticipated outflows of resources can be estimated. 
C)  When anticipated outflows of resources are both probable and measurable. 
D)  When formally acknowledged and an amount is due and payable as a result.

Question 17

The federal government maintains a dual system of accounts. What are the two types of accounts? Why does the federal government keep two types?

Accepted Answer

The two types of accounts maintained by

Question 18

The Government Performance and Results Act of 1993 requires federal agencies to do which of the following?

Accepted Answer

A)  Develop strategic plans and operational objectives. 
B)  Develop measures of performance. 
C)  Report on the extent to which they have met their objectives. 
D)  All of the above. 
A)  Develop strategic plans and operational objectives. 
B)  Develop measures of performance. 
C)  Report on the extent to which they have met their objectives. 
D)  All of the above.

Question 19

Which of the following is a false statement about federal special funds?

Accepted Answer

A)  They are maintained primarily to account for resources that are designated for specific programs or activities. 
B)  They are typically financed by dedicated fees. 
C)  They account for resources used to pay for national defense. 
D)  They are included in the unified budget of the federal government. 
A)  They are maintained primarily to account for resources that are designated for specific programs or activities. 
B)  They are typically financed by dedicated fees. 
C)  They account for resources used to pay for national defense. 
D)  They are included in the unified budget of the federal government.

Question 20

Proprietary accounts are used to report the business-type activities of the federal government.

Accepted Answer

A) True 
 B)False

FASAB standards preclude disclosure of investments in human capital in federal financial reports.

Military assets are required to be capitalized and depreciated until war is declared.

Which of the following is a function of the U.S. Department of the Treasury?

The CFO of the United States is

Federal agencies recognize the cost of loan guarantees when it is probable that borrowers will default on their payments.

Which of the following statements is true of the International Public Sector Accounting Standards Board?

The Government Accountability Office (GAO) is part of which branch of the federal government?

The allowance for unrealized holding gains that appears in the cost of goods sold section of a federal financial statement effectively does which of the following?

The federal government is required to recognize liabilities from nonexchange transactions

Which of the following categories is included in the Objectives of Federal Financial Reporting?

The FASAB allows entities to value inventories held for sale at which of the following values?

Federal government accounting standards are the responsibility of which federal government agency?

Which of the following types of expenditures are not accounted for in the federal government's general fund?

Which of the following is a role that GAO plays in the accounting and information management policy of the United States?

The federal government has declared a specific area a "natural disaster" area, making residents of the area eligible for payments from the federal government. When should the liability for such payments be recorded?

The federal government maintains a dual system of accounts. What are the two types of accounts? Why does the federal government keep two types?

The Government Performance and Results Act of 1993 requires federal agencies to do which of the following?

Which of the following is a false statement about federal special funds?

Proprietary accounts are used to report the business-type activities of the federal government.

The Government and Not-For-Profit Environment

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

Auditing Governments and Not-For-Profit Organizations

Filters

Exam 16: Federal Government Accounting

FASAB standards preclude disclosure of investments in human capital in federal financial reports.

Military assets are required to be capitalized and depreciated until war is declared.

Which of the following is a function of the U.S. Department of the Treasury?

The CFO of the United States is

Federal agencies recognize the cost of loan guarantees when it is probable that borrowers will default on their payments.

Which of the following statements is true of the International Public Sector Accounting Standards Board?

The Government Accountability Office (GAO) is part of which branch of the federal government?

The allowance for unrealized holding gains that appears in the cost of goods sold section of a federal financial statement effectively does which of the following?

The federal government is required to recognize liabilities from nonexchange transactions

Which of the following categories is included in the Objectives of Federal Financial Reporting?

The FASAB allows entities to value inventories held for sale at which of the following values?

Federal government accounting standards are the responsibility of which federal government agency?

Which of the following types of expenditures are not accounted for in the federal government's general fund?

Which of the following is a role that GAO plays in the accounting and information management policy of the United States?

The federal government has declared a specific area a "natural disaster" area, making residents of the area eligible for payments from the federal government. When should the liability for such payments be recorded?

The federal government maintains a dual system of accounts. What are the two types of accounts? Why does the federal government keep two types?

The Government Performance and Results Act of 1993 requires federal agencies to do which of the following?

Which of the following is a false statement about federal special funds?

Proprietary accounts are used to report the business-type activities of the federal government.

The Government and Not-For-Profit Environment

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

Auditing Governments and Not-For-Profit Organizations

Filters