Question 1

A revenues to expenditures ratio of over 0.90 is considered acceptable.

Accepted Answer

A) True 
 B)False  False

Question 2

The financial condition of a government is easily determined by calculating the financial ratios discussed in Chapter 10.

Accepted Answer

A) True 
 B)False  False

Question 3

Service-level solvency is the government's ability to meet its current budget by expending no more resources than were appropriated.

Accepted Answer

A) True 
 B)False  False

Question 4

To provide a meaningful interpretation of a financial ratio a benchmark is needed.

Accepted Answer

A) True 
 B)False

Question 5

Cash solvency is the government's long-run ability to pay all the costs of doing business.

Accepted Answer

A) True 
 B)False

Question 6

For which of the following is a low or decreasing value of the item associated with a stronger financial condition of a governmental entity?

Accepted Answer

A)  Unfunded pension liability. 
B)  Property values. 
C)  Home ownership. 
D)  Employment rate. 
A)  Unfunded pension liability. 
B)  Property values. 
C)  Home ownership. 
D)  Employment rate.

Question 7

Which of the following trends is most likely to be a signal of impending fiscal stress?

Accepted Answer

A)  An increasing ratio of own source revenues to total revenues. 
B)  A decreasing ratio of total revenues to total expenditures. 
C)  A decreasing ratio of debt service expenditures to operating revenues. 
D)  A decreasing ratio of operating expenditures to total revenues. 
A)  An increasing ratio of own source revenues to total revenues. 
B)  A decreasing ratio of total revenues to total expenditures. 
C)  A decreasing ratio of debt service expenditures to operating revenues. 
D)  A decreasing ratio of operating expenditures to total revenues.

Question 8

"Financial statements are virtually useless in evaluating a city's financial condition." Do you agree with this statement? Why or why not?

Accepted Answer

Disagree.While it is true that much usef

Question 9

FitchRatings,Thomson Municipal Market,and Standard & Poor's are the three major agencies that provide credit ratings for state and local government debt.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is one of the most important reasons for evaluating a government's financial performance?

Accepted Answer

A)  Determine if property taxes and other revenue sources should be increased. 
B)  Assign responsibility for success or failure of the government to certain parties. 
C)  Determine whether the government is accomplishing its mission. 
D)  Have an early warning of impending financial difficulty for a diverse set of decision makers. 
A)  Determine if property taxes and other revenue sources should be increased. 
B)  Assign responsibility for success or failure of the government to certain parties. 
C)  Determine whether the government is accomplishing its mission. 
D)  Have an early warning of impending financial difficulty for a diverse set of decision makers.

Question 11

A measure of the adequacy of the amount of the government's total unrestricted net position or deficit at the measurement date is:

Accepted Answer

A)  Unrestricted net position/total revenues. 
B)  Business-type activities revenues/business-type activities expenses. 
C)  Total net position (governmental activities and business-type activities) less total net position at the beginning of the year. 
D)  Total revenues/total expenses. 
A)  Unrestricted net position/total revenues. 
B)  Business-type activities revenues/business-type activities expenses. 
C)  Total net position (governmental activities and business-type activities) less total net position at the beginning of the year. 
D)  Total revenues/total expenses.

Question 12

One measure of interperiod equity is whether net revenues are exceeding a government's total expenses.

Accepted Answer

A) True 
 B)False

Question 13

Explain the relationships among environmental factors,organizational factors,and financial factors in determining government financial condition.

Accepted Answer

Environmental factors (e.g.,community ne

Question 14

A recognizable signal of fiscal stress is:

Accepted Answer

A)  Total revenues from own sources increasing as a percent of total revenues for all sources. 
B)  Increasing population. 
C)  Declining property values. 
D)  An increasing ratio of total revenues to total expenditures. 
A)  Total revenues from own sources increasing as a percent of total revenues for all sources. 
B)  Increasing population. 
C)  Declining property values. 
D)  An increasing ratio of total revenues to total expenditures.

Question 15

Which of the following is not a typical reason for evaluating a government's financial condition?

Accepted Answer

A)  Prevent financial crises from developing. 
B)  Hold management accountable for the use of tax revenues. 
C)  Determine if the government can continue to offer the current level of services. 
D)  Determine whether residents will receive dividends. 
A)  Prevent financial crises from developing. 
B)  Hold management accountable for the use of tax revenues. 
C)  Determine if the government can continue to offer the current level of services. 
D)  Determine whether residents will receive dividends.

Question 16

Fiscal capacity is the government's ongoing ability and willingness to supply the capital and human resources needed to meet its commitments to provide services.

Accepted Answer

A) True 
 B)False

Question 17

Use of trend data is an acceptable method of benchmarking for governments.

Accepted Answer

A) True 
 B)False

Question 18

An effective system of monitoring financial condition may permit management to identify unfavorable financial trends in sufficient time to take preventive action to avoid financial distress.

Accepted Answer

A) True 
 B)False

Question 19

A measure of whether the government lived within its means in the measurement year,was required to use prior year resources to fund a portion of current year costs,or shifted the funding of some current year costs to future periods,is:

Accepted Answer

A)  Business-type activities revenues/business-type activities expenses. 
B)  Unrestricted net position/total revenues. 
C)  Total revenues/total expenditures. 
D)  Total net position (governmental activities and business-type activities) less total net position at the beginning of the year. 
A)  Business-type activities revenues/business-type activities expenses. 
B)  Unrestricted net position/total revenues. 
C)  Total revenues/total expenditures. 
D)  Total net position (governmental activities and business-type activities) less total net position at the beginning of the year.

Question 20

Which of the following terms is defined as determining whether current-year revenues are sufficient to pay for current-year services and whether future taxpayers will be required to assume the burdens of services previously provided?

Accepted Answer

A)  Financial position. 
B)  Interperiod equity. 
C)  Financial condition. 
D)  Economic condition. 
A)  Financial position. 
B)  Interperiod equity. 
C)  Financial condition. 
D)  Economic condition.

A revenues to expenditures ratio of over 0.90 is considered acceptable.

The financial condition of a government is easily determined by calculating the financial ratios discussed in Chapter 10.

Service-level solvency is the government's ability to meet its current budget by expending no more resources than were appropriated.

To provide a meaningful interpretation of a financial ratio a benchmark is needed.

Cash solvency is the government's long-run ability to pay all the costs of doing business.

For which of the following is a low or decreasing value of the item associated with a stronger financial condition of a governmental entity?

Which of the following trends is most likely to be a signal of impending fiscal stress?

"Financial statements are virtually useless in evaluating a city's financial condition." Do you agree with this statement? Why or why not?

FitchRatings,Thomson Municipal Market,and Standard & Poor's are the three major agencies that provide credit ratings for state and local government debt.

Which of the following is one of the most important reasons for evaluating a government's financial performance?

A measure of the adequacy of the amount of the government's total unrestricted net position or deficit at the measurement date is:

One measure of interperiod equity is whether net revenues are exceeding a government's total expenses.

Explain the relationships among environmental factors,organizational factors,and financial factors in determining government financial condition.

A recognizable signal of fiscal stress is:

Which of the following is not a typical reason for evaluating a government's financial condition?

Fiscal capacity is the government's ongoing ability and willingness to supply the capital and human resources needed to meet its commitments to provide services.

Use of trend data is an acceptable method of benchmarking for governments.

An effective system of monitoring financial condition may permit management to identify unfavorable financial trends in sufficient time to take preventive action to avoid financial distress.

A measure of whether the government lived within its means in the measurement year,was required to use prior year resources to fund a portion of current year costs,or shifted the funding of some current year costs to future periods,is:

Which of the following terms is defined as determining whether current-year revenues are sufficient to pay for current-year services and whether future taxpayers will be required to assume the burdens of services previously provided?

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Entities

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts Budgetary Accounting

Accounting for Governmental Operating Activitiesillustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-Type Activities of State and Local Governments

Accounting for Fiduciary Activitiesagency and Trust Funds

Financial Reporting of State and Local Governments

Auditing of Governmental and Not-For-Profit Organizations

Budgeting and Performance Measurement

Accounting for Not-For-Profit Organizations

Not-For-Profit Organizationsregulatory, Taxation, and Performance Issues

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government Glossary

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Exam 10: Analysis of Governmental Financial Performance

A revenues to expenditures ratio of over 0.90 is considered acceptable.

The financial condition of a government is easily determined by calculating the financial ratios discussed in Chapter 10.

Service-level solvency is the government's ability to meet its current budget by expending no more resources than were appropriated.

To provide a meaningful interpretation of a financial ratio a benchmark is needed.

Cash solvency is the government's long-run ability to pay all the costs of doing business.

For which of the following is a low or decreasing value of the item associated with a stronger financial condition of a governmental entity?

Which of the following trends is most likely to be a signal of impending fiscal stress?

"Financial statements are virtually useless in evaluating a city's financial condition." Do you agree with this statement? Why or why not?

FitchRatings,Thomson Municipal Market,and Standard & Poor's are the three major agencies that provide credit ratings for state and local government debt.

Which of the following is one of the most important reasons for evaluating a government's financial performance?

A measure of the adequacy of the amount of the government's total unrestricted net position or deficit at the measurement date is:

One measure of interperiod equity is whether net revenues are exceeding a government's total expenses.

Explain the relationships among environmental factors,organizational factors,and financial factors in determining government financial condition.

A recognizable signal of fiscal stress is:

Which of the following is not a typical reason for evaluating a government's financial condition?

Fiscal capacity is the government's ongoing ability and willingness to supply the capital and human resources needed to meet its commitments to provide services.

Use of trend data is an acceptable method of benchmarking for governments.

An effective system of monitoring financial condition may permit management to identify unfavorable financial trends in sufficient time to take preventive action to avoid financial distress.

A measure of whether the government lived within its means in the measurement year,was required to use prior year resources to fund a portion of current year costs,or shifted the funding of some current year costs to future periods,is:

Which of the following terms is defined as determining whether current-year revenues are sufficient to pay for current-year services and whether future taxpayers will be required to assume the burdens of services previously provided?

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Entities

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts Budgetary Accounting

Accounting for Governmental Operating Activitiesillustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-Type Activities of State and Local Governments

Accounting for Fiduciary Activitiesagency and Trust Funds

Financial Reporting of State and Local Governments

Auditing of Governmental and Not-For-Profit Organizations

Budgeting and Performance Measurement

Accounting for Not-For-Profit Organizations

Not-For-Profit Organizationsregulatory, Taxation, and Performance Issues

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government Glossary

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