Question 1

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 as well as for proprietary funds and fiduciary funds.

Question 2

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

Accepted Answer

Under modified accrual accounting, revenues are recognized when measurable and available to finance expenditures of the current period. This means that the revenue must be earned in the current fiscal period and must also be available to be used to fund current period expenses.

Question 3

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

Accepted Answer

The answer of Fund-basis statements are presented for three categories...

Question 4

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

Accepted Answer

FASAB (Federal Accounting Standards Advisory Board), GASB (Governmental Accounting Standards Board), and FASB (Financial Accounting Standards Board) standards are primarily set forth in documents called statements.

Question 5

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 in the required supplementary information section of the Comprehensive Annual Financial Report (CAFR).

Question 6

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

Accepted Answer

Concept statements do not establish accounting standards but primarily serve to guide standard setting bodies. Governments must comply with GAAP as established by Statements to receive unqualified audit opinions.

Question 7

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

Accepted Answer

The answer of Infrastructure may or may not be capitalized...

Question 8

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

Accepted Answer

FASB sets the reporting standards for public companies, not private companies or not-for-profits.

Question 9

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.

Question 10

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

Accepted Answer

Not all funds of a governmental unit use the current financial resources measurement focus and modified accrual basis; only governmental funds do. Proprietary and fiduciary funds use the economic resources measurement focus and accrual basis of accounting.

Question 11

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

Accepted Answer

Internal Service funds are considered part of the reporting entity and are included in the government-wide statements as governmental activities if they are primarily used by departments within the General Fund or other governmental funds. Therefore, if the only buyers of the services provided by an Internal Service fund are departments within the General Fund (which is a governmental fund), then the fund will be treated as part of governmental activities in the government-wide statements.

Question 12

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

Accepted Answer

Fiduciary funds are categorized into four types: agency funds, pension trust funds, investment trust funds and private-purpose trust funds.

Question 13

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

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

Question 14

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.

Accepted Answer

The answer of Long-term debt that is to be paid...

Question 15

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 being reported on the financial statements, such as current and long-term assets.

Question 16

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

Accepted Answer

Common measurement focus and basis of measurement is indeed an important feature of government-wide financial statements. This means that all funds and activities of the government are reported using the same basis of accounting, which allows for ease of comparison and consistency in reporting. It also means that the financial statements are prepared using accrual accounting, which recognizes revenues and expenses when they are earned or incurred, regardless of when cash is received or paid.

Question 17

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

Accepted Answer

Government-wide financial statements follow the accrual basis of accounting, while governmental activities funds use the modified accrual basis. Therefore, when preparing government-wide financial statements, the governmental activities funds statements must be converted to the accrual basis to ensure consistency in accounting principles.

Question 18

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

Accepted Answer

Governmental activities fund statements use the full accrual basis of accounting, while modified accrual basis is used for governmental fund statements. Government-wide financial statements use the full accrual basis of accounting, so governmental activities funds statements would also use full accrual basis when preparing government-wide financial statements.

Question 19

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 20

State and local governments may use eleven different fund types.

Accepted Answer

State and local governments may use eleven different fund types including general fund, special revenue fund, debt service fund, capital projects fund, enterprise fund, internal service fund, trust and agency fund, permanent fund, pension trust fund, private-purpose trust fund, and custodial fund.

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