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

Question 1

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

Answer 1

True

Question 2

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

Answer 2

True

Question 3

All 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.

Answer 3

True

Question 4

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 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

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 15

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

Question 16

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

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

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

Question 19

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

Question 20

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

Question 21

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 22

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

Question 23

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

Question 24

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

Question 25

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 26

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

Question 27

Infrastructure may or may not be capitalized by state and local governmental units.

Question 28

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

Question 29

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

Question 30

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

Question 31

Internal Service funds are treated as governmental activities in the government-wide statements if the only "buyers" are departments within the General Fund.

Question 32

Fiduciary funds include agency,pension trust,investment trust,and private-purpose trust.

Question 33

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

Question 34

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 35

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

Question 36

Common measurement focus and basis of measurement is an important feature of government-wide financial statements.

Question 37

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

Question 38

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

Question 39

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

Question 40

State and local governments may use eleven different fund types.

Question 41

Which of the following is not one of the objectives of Federal Financial Reporting,as outlined in SAFAC 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 42

The GASB recently published a white paper outlining prohibited transactions for not-for-profit organizations.

Question 43

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 44

A government may have multiple funds for each of the following fund types except:

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

Question 45

Which of the following is not a fiduciary fund?

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

Question 46

Which of the following is a fiduciary fund?

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

Question 47

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 48

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

Question 49

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

Question 50

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

Question 51

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

Question 52

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

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

Question 53

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 54

According to GASB standards relating to Budgetary Accounting,the budget,when adopted according to procedures specified by state laws,is binding upon the administrators of a governmental unit.

Question 55

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

Question 56

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 57

Which of the following is a governmental fund?

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

Question 58

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 59

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

Question 60

According to GASB standards relating to Budgetary Accounting,budgetary comparisons should not be included in the appropriate financial statements or schedules for governmental funds for which an annual budget has been adopted.

Question 61

What is the minimum number of funds to be used by a governmental unit?

A) One; the General Fund
B) Two; the General Fund and one permanent fund
C) As many as necessary to fulfill legal requirements and sound financial administration
D) A & C

Question 62

Governmental funds do not include:

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

Question 63

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 64

Proprietary funds use the:

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

Question 65

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 66

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 67

GASB standards contain all of the following in its three-part budgetary principle except:

A) An annual budget should be adopted by every governmental unit.
B) The accounting system should provide the basis for appropriate budgetary control.
C) Budgetary comparisons should be included in the appropriate financial statement and schedules for governmental funds for which an annual budget has been adopted.
D) None of the above; all would be included

Question 68

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 69

Governmental funds are to 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 70

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 71

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

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

Question 72

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.
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 73

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

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

Question 74

Which of the following use current financial resources measurement focus?

A) Fiduciary fund statements
B) Governmental fund statements
C) Proprietary fund statements
D) Enterprise fund statements

Question 75

Governmental funds include:

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

Question 76

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

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

Question 77

Which of the following characteristics would 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) Both A and B

Question 78

The term "proprietary funds" applies to:

A) enterprise 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 79

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, the fiduciary funds have no revenues.

Question 80

Fiduciary funds are to 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) none of the above, the fiduciary funds have no revenues.