Question 1

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

Accepted Answer

The accrual basis of accounting recognizes revenues when they are earned and are expected to be realized, and recognizes expenses when the related goods or services are used up. The modified accrual basis of accounting measures revenues when measurable and available to finance the expenditures of the current period.

Question 2

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

Accepted Answer

Accounting and financial reporting standards for profit-seeking businesses and for nongovernmental not-for-profit organizations are set by the FASB which includes private universities. The GASB sets standards for governmentally related not-for-profits organizations such as colleges and universities.

Question 3

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

Accepted Answer

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

Question 4

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

Accepted Answer

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

Question 5

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

Accepted Answer

The economic resource measurement focus and accrual basis of measurement is a key characteristic of government-wide financial statements. This approach provides more comprehensive information on the financial position and performance of the government than traditional cash-basis accounting.

Question 6

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

Accepted Answer

The comparison of the legally approved budget with actual results of the General Fund is required supplementary information in the CAFR, in accordance with Governmental Accounting Standards Board (GASB) Statement No. 34. This information is included in the Required Supplementary Information (RSI) section of the CAFR.

Question 7

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.

Accepted Answer

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

Question 8

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

Accepted Answer

The 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 9

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

Accepted Answer

Measurement focus is defined as the items that are being reported on the financial statements, which include current and long-term assets, liabilities, and equity. Therefore, the statement is true.

Question 10

Long-term debt that is to be paid with tax revenues is not reported both in the government-wide statements and in the governmental fund statements

Accepted Answer

Long-term debt that is to be paid with tax revenues is not reported in the governmental fund statements because it is not considered to be a liability of the fund.

Question 11

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

Accepted Answer

A Permanent fund is a governmental fund. Fiduciary funds are private-purpose trust, investment trust, pension trust or agency funds.

Question 12

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

Accepted Answer

FASAB, GASB, and FASB standards are primarily set forth in documents called Standards and Concepts Statements, not interpretations. Interpretaions are secondary guidance for applying the primary standards.

Question 13

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

Accepted Answer

Fiduciary funds use the economic resources measurement focus and the accrual basis of accounting.

Question 14

Governmental-type activities fund statements must use accrual basis when preparing government-wide financial statements.

Accepted Answer

Government-wide financial statements are prepared using the accrual basis of accounting, which recognizes revenues when earned and expenses when incurred, regardless of when cash is received or paid out. This includes the financial statements for governmental-type activities funds.

Question 15

State and local governments may use twelve different fund types.

Accepted Answer

There are eleven fund types.

Question 16

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

Accepted Answer

FASB (Financial Accounting Standards Board) sets the reporting standards for private not-for-profit organizations, including those in the healthcare and educational sectors. These standards are referred to as Generally Accepted Accounting Principles (GAAP) and are designed to ensure consistency and transparency in financial reporting.

Question 17

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

Accepted Answer

Internal Service funds are considered part of governmental activities if their principal customers are other departments within the same government entity. This is because their services are intended to support the government's various functions and programs, rather than generate revenue for external customers.

Question 18

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

Accepted Answer

The answer of Business activities fund statements must be changed...

Question 19

Infrastructure is capitalized by state and local governmental units.

Accepted Answer

Infrastructure projects such as roads, bridges, and public buildings are typically funded and capitalized by state and local governments.

Question 20

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

Accepted Answer

Governmental funds are reported using the modified accrual basis of accounting. Governmental-type activities are reported in the government-wide statements using the accrual basis of accounting, including fixed assets and long-term debt.

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