Deck 1: Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Question 1

The Governmental Accounting Standards Board sets financial reporting standards for all units of government:
federal,state,and local.

Answer 1

False

Question 2

One objective of the Governmental Accounting Standards Board is to help users determine compliance with finance-related laws,rules,and regulations.

Answer 2

True

Question 3

The format and content of supplementary information which is not required by GASB is up to the discretion of the reporting entity

Answer 3

False

Question 4

The FASAB was established to recommend accounting and financial reporting standards for governmental and nonprofit enterprises.

Question 5

The GASB requires supplementary information to be reported with its financial statements if it is essential to establish appropriate context for the financial statements and notes.

Question 6

The Financial Accounting Standards Board sets financial reporting standards for private sector organizations,except nongovernmental,not-for-profit organizations.

Question 7

The Financial Accounting Standards Board sets financial reporting standards for private not-for-profits and investor-owned businesses.

Question 8

Governments must have as many funds as necessary to fulfill legal requirements and sound financial administration but must have at a minimum a General Fund.

Question 9

The Federal Accounting Standards Advisory Board requires less extensive reports than does the FASB or GASB.

Question 10

The GASB Concept Statement on Service Efforts and Accomplishments Reporting requires state and local governments to include inputs of nonmonetary resources in their financial reporting.

Question 11

FASAB,GASB and FASB standards are set forth primarily in documents called statements.

Question 12

FASAB,GASB and FASB standards are set forth primarily in documents called concept statements.

Question 13

Although certain supplementary information may not be required,if presented,it must follow GASB guidance regarding its format and content.

Question 14

An organization is presumed to be governmental if it has the ability to issue directly debt that is exempt from federal taxes.

Question 15

The Financial Accounting Standards Board and the Governmental Accounting Standards Board are parallel bodies under the oversight of the Financial Accounting Foundation.

Question 16

The FASAB requires more financial statements than are typically required of state and local governments.

Question 17

The GASB Concept Statement on Service Efforts and Accomplishments Reporting encourages state and local governments to include inputs of nonmonetary resources in their financial reporting.

Question 18

Fund accounting exists primarily to provide assurance that resources are used according to legal or donor restrictions.

Question 19

A Management's Discussion and Analysis is required for state and local governmental units,but not the federal government.

Question 20

The Governmental Accounting Standards Board considers the financial reporting entity to include the primary government and its component units.

Question 21

Internal Service funds are treated as governmental activities in the government-wide statements if the principal customers are other departments within the General Fund.

Question 22

GASB and FASB Concept Statements establish accounting standards that must be complied with to receive an unqualified audit opinion.

Question 23

Long-term debt that is to be paid with tax revenues is reported both in the government-wide statements and in the governmental fund statements

Question 24

Fiduciary funds of a governmental unit use the current financial resources measurement focus and modified accrual basis of accounting

Question 25

FASB sets the reporting standards for private and public not-for-for profits

Question 26

Under the accrual basis of accounting,revenues are recognized when measurable and available to finance expenditures of the current period.

Question 27

Measurement focus refers to those items,such as current and long-term assets,that are being reported on the financial statements.

Question 28

The government-wide statements and the fund statements for proprietary funds and fiduciary funds use the economic resources measurement focus and the accrual basis of accounting.

Question 29

The Financial Accounting Standards Board has authority to establish accounting and financial reporting standards for both private and state universities.

Question 30

Infrastructure is not capitalized by state and local governmental units.

Question 31

State and local governments may use eleven different fund types.

Question 32

Comparison of the legally approved budget with actual results of the General Fund is not part of required supplementary information in the CAFR.

Question 33

Governmental activities fund statements may use modified accrual basis when preparing government-wide financial statements.

Question 34

Fiduciary funds include agency,pension trust,investment trust,and permanent funds.

Question 35

Fund-basis statements are presented for three categories of government activities:
governmental,proprietary,and fiduciary.

Question 36

FASAB,GASB and FASB standards are set forth primarily in documents called interpretations.

Question 37

Business activities fund statements must be changed to the accrual basis from the modified accrual basis when preparing government-wide financial statements.

Question 38

The economic resource measurement focus and accrual basis of measurement is an important feature of government-wide financial statements.

Question 39

Comparison of the legally approved budget with actual results of the General Fund is included as part of required supplementary information in the CAFR.

Question 40

General fixed assets of the government are reported both in the government-wide financial statements and the governmental fund financial statements.

Question 41

Which of the following is not a fiduciary fund?

A) Agency
B) Permanent
C) Pension trust
D) Private-purpose trust

Question 42

Depreciation on capital assets is included as an expense in the Statement of Revenues,Expenses,and Changes in Fund Net Assets in the proprietary fund financial statements

Question 43

According to GASB standards relating to Budgetary Accounting,budgetary comparisons are not required for proprietary funds.

Question 44

Depreciation on capital assets is not included as an expense in the Statement of Revenues,Expenses,and Changes in Fund Net Assets in the proprietary fund financial statements

Question 45

The GASB recently published a white paper which identifies five environmental differences between governments and for-profit enterprises.

Question 46

According to GASB standards relating to Budgetary Accounting,an annual budget should be adopted by every governmental unit.

Question 47

Which of the following fund types is present in every general-purpose government?

A) Permanent
B) General
C) Special revenue
D) Capital projects

Question 48

Depreciation on capital assets is included as an expense in the Statement of Activities in the government-wide financial statements

Question 49

The GASB sets accounting standards for all of the following except:

A) State and local governments
B) Nongovernmental not-for-profit hospital
C) Component units owned or controlled by governments
D) Governmentally related not-for-profit universities

Question 50

According to GASB standards relating to Budgetary Accounting,budgetary comparisons should be included in the appropriate financial statements or schedules for governmental funds for which an annual budget has been adopted.

Question 51

According to GASB standards relating to Budgetary Accounting,the accounting system should provide the basis for appropriate budgetary control.

Question 52

The term "proprietary funds" applies to:

A) enterprise and internal service funds only.
B) all funds that use accrual accounting.
C) enterprise, internal service, and private-purpose trust funds.
D) none of the above answers are correct.

Question 53

For most state and local governments,the budget,when adopted according to procedures specified by state laws,is binding upon the administrators of a governmental unit.

Question 54

Which of the following is a fiduciary fund?

A) Investment trust
B) Permanent
C) Enterprise
D) Internal service

Question 55

A government may have two or more General Funds.

Question 56

Governmental funds include:

A) Special revenue funds
B) Internal service funds
C) Debt service funds
D) A and C

Question 57

Permanent funds can be either a governmental fund or a fiduciary fund where only income on donated assets may be spent.

Question 58

The "Hierarchy of GAAP" is established by the:

A) Financial Accounting Standards Board.
B) Federal Accounting Standards Advisory Board
C) Governmental Accounting Standards Board
D) All of the above have established a hierarchy

Question 59

The term "fiduciary funds" applies to:

A) enterprise and internal service funds.
B) pension, investment trust and enterprise funds
C) enterprise, internal service, and private-purpose trust funds.
D) none of the above answers are correct.

Question 60

A fund represents part of the activities of an organization which is separated from other activities in the accounting records to more easily demonstrate compliance with legal restrictions or limitations.

Question 61

Which of the following organizations has authority to establish accounting and financial reporting standards for the federal government?

A) Federal Accounting Standards Advisory Board.
B) Office of Management and Budget.
C) Governmental Accounting Standards Board.
D) None of the above; no one has been granted authority to set standards for the federal government

Question 62

Which of the following use current financial resources measurement focus?

A) Fiduciary fund statements
B) Governmental fund statements
C) Proprietary fund statements
D) Internal Service fund statements

Question 63

Which of the following best describes how many funds a government should use?

A) One for each revenue source
B) Two at a minimum; the General Fund and one enterprise fund
C) As many as necessary to fulfill legal requirements and sound financial administration
D) None of the above

Question 64

Which fund category must change from modified accrual to accrual basis when preparing government-wide financial statements?

A) Governmental
B) Proprietary
C) Fiduciary
D) A & B only

Question 65

Which of the following is not one of the objectives of Federal Financial Reporting,as outlined in SFFAC 1,which was issued by the FASAB?

A) Financial reporting should enable evaluation of the service efforts, costs and accomplishments of the reporting entity.
B) Financial reporting should enable evaluation of the success rate of programs
C) Financial reporting should reveal whether financial systems and controls are adequate
D) Financial reporting should demonstrate accountability regarding raising and expending money according to budgetary process and laws and regulations

Question 66

The FASB has the authority to establish accounting and financial reporting standards for:

A) Federal government
B) Private not-for-profits
C) Public not-for-profits
D) State and local governments

Question 67

Which of the following is a governmental fund?

A) Agency
B) Enterprise
C) Special revenue
D) Internal service

Question 68

Level "A" GAAP for The University of Virginia,a public institution,would be established by the:

A) Financial Accounting Standards Board.
B) Governmental Accounting Standards Board.
C) American Institute of Certified Public Accountants.
D) National Association of College and University Business Officers.

Question 69

Governmental funds do not include:

A) Special revenue funds
B) Agency funds
C) Debt service funds
D) The General fund

Question 70

Under the modified accrual basis of accounting,revenues should be recognized when they are:

A) authorized by the budget ordinance.
B) realizable and earned.
C) measurable and available to finance expenditures of the current period.
D) realized through collection.

Question 71

Governmental funds use the:

A) economic resources measurement focus and accrual basis of accounting.
B) current financial resources measurement focus and accrual basis of accounting.
C) economic resources measurement focus and modified accrual basis of accounting.
D) current financial resources measurement focus and modified accrual basis of accounting

Question 72

Fiduciary funds are to use the:

A) economic resources measurement focus and modified accrual basis of accounting.
B) current financial resources measurement focus and accrual basis of accounting.
C) economic resources measurement focus and accrual basis of accounting.
D) none of the above, the fiduciary funds have no revenues.

Question 73

Government-wide statements use the:

A) current financial resources measurement focus and accrual basis of accounting.
B) economic resources measurement focus and accrual basis of accounting.
C) economic resources measurement focus and modified accrual basis of accounting.
D) none of the above.

Question 74

Proprietary funds use the:

A) economic resources measurement focus and accrual basis of accounting.
B) current financial resources measurement focus and modified accrual basis of accounting
C) economic resources measurement focus and modified accrual basis of accounting.
D) current financial resources measurement focus and accrual basis of accounting.

Question 75

The GASB has the authority to establish accounting and financial reporting standards for:

A) Federal government
B) Private not-for-profits
C) State governments
D) None of the above

Question 76

Which of the following characteristics would not define an organization as governmental?

A) The power to enact and enforce a tax levy.
B) The potential for unilateral dissolution by a government with the net assets reverting to a government.
C) The receipt of grant money from a state or local government for the purpose of providing services to the public.
D) All of the above.

Question 77

Which of the following would not be included in FASB Statement of Financial Accounting Concepts #4,which identifies the information needs of the users of non-business financial statements?

A) Format and content of financial statements
B) Assessing services provided by a non-business organization and its ability to continue to provide those services
C) Assessing managements' stewardship and performance
D) Evaluation of an organization's resources, obligations and effects of changes in net resources

Question 78

In order for a fund to exist,there must be:

A) A fiscal entity; assets set aside for a specific purpose
B) A double-entry accounting entity
C) Both A & B are required
D) A & B are optional and not required

Question 79

The Governmental Accounting Standards Board has been given authority to establish accounting and financial reporting standards for:

A) all governmental units and agencies.
B) federal, state, and local governments and governmentally-owned utilities, authorities, hospitals, and colleges and universities..
C) all governmental units and all not-for-profit organizations.
D) state and local governmental entities, and governmentally-owned utilities, authorities, hospitals, and colleges and universities.

Question 80

The FASAB has the authority to establish accounting and financial reporting standards for:

A) Federal government
B) Investor owned business
C) State and local governments
D) Public not-for-profits