Question 1

Special purpose governments may be stand alone local governments or may be component units of other governments that are issuing separate reports.

Accepted Answer

Special purpose governments can exist as their own independent local government or as part of another government entity, but they still issue their own separate financial reports.

Question 2

City government and library districts are examples of general -purpose state or local governments.

Accepted Answer

City governments are general-purpose governments, but library districts are special-purpose governments, focusing on specific functions like library services.

Question 3

General state appropriations are treated as nonoperating revenue of public colleges and universities.

Accepted Answer

General state appropriations are typically considered nonoperating revenue because they are not generated from the regular operating activities of the institution, such as tuition or fundraising.

Question 4

Special-purpose governmental entities that are engaged in a single business activity are not required to prepare government-wide financial statements,but may issue only enterprise fund statements.

Accepted Answer

This statement is true. According to the GASB Statement No. 34, special-purpose governmental entities engaged in a single business activity may issue only enterprise fund statements and are not required to prepare government-wide financial statements.

Question 5

Public higher education institutions are allowed to report as special-purpose entities engaged in governmental and business-type activities or in governmental-type activities only.

Accepted Answer

The answer of Public higher education institutions are allowed to...

Question 6

General-purpose governments are those that offer more than one type of basic governmental service,while special-purpose entities generally provide a limited,or single,set of programs or services.

Accepted Answer

General-purpose governments provide a variety of basic governmental services, while special-purpose entities provide a limited set of services or programs.

Question 7

Public higher education institutions that report as special-purpose entities engaged in business-type activities only are still required to prepare a Management's Discussion and Analysis.

Accepted Answer

Public higher education institutions that report as special-purpose entities engaged in business-type activities only are still required to prepare a Management's Discussion and Analysis (MD&A) as per Governmental Accounting Standards Board (GASB) Statement No. 34. The MD&A provides an analysis of the entity's financial performance, changes in financial position, and significant events or uncertainties affecting the future.

Question 8

Sometimes,but not always public colleges are included as component units in the state CAFR.

Accepted Answer

Public colleges may be included as component units in the state's Comprehensive Annual Financial Report (CAFR) depending on how the state's reporting requirements and standards are structured. However, this may vary between states.

Question 9

According to GASB Statement No.34,"General-purpose governments are thought to be those that offer more than one type of basic governmental service".

Accepted Answer

GASB Statement No.34 defines general-purpose governments as those that provide multiple basic governmental services, such as police, fire protection, sanitation, and education.

Question 10

Park districts and village government are examples of special-purpose local governments.

Accepted Answer

The answer of Park districts and village government are examples...

Question 11

For financial reporting purposes,governmental health care entities,public school systems,other not-for-profit entities and public colleges and universities may be considered to be special-purpose entities.

Accepted Answer

These entities are considered special-purpose entities for financial reporting purposes because they have specific objectives and constraints that distinguish them from other types of entities. For example, a public school system's primary objective is to provide education to students, while a governmental health care entity's objective is to provide healthcare services to a certain population. These specific objectives and constraints affect their financial reporting requirements and the way their financial statements are presented.

Question 12

GASB Statement 35 extends the provisions of GASB Statement 34 to both public and private colleges and universities.

Accepted Answer

GASB Statement 35 only applies to public colleges and universities. Private colleges and universities are not subject to GASB standards.

Question 13

Public colleges typically report as special-purpose entities engaged only in governmental-type activities.

Accepted Answer

Public colleges typically report as special-purpose entities engaged in both governmental and business-type activities, not just governmental-type activities.

Question 14

Revenue sources for public colleges include tuition and fees,state appropriations and donations.All other income is reported as unrelated business income.

Accepted Answer

Unrelated business income refers to income from activities not substantially related to the educational purpose of the institution, such as income from a college-owned bookstore or rental properties, not all other income.

Question 15

Special-purpose governments that are engaged in only one governmental-type activity are permitted to combine the fund and government-wide financial statements.

Accepted Answer

Special-purpose governments that engage in only one governmental-type activity are referred to as Single-Function Governments. These governments are permitted to use the combining financial statements format to present information about the individual fund and government-wide financials.

Question 16

GASB requirements for business-type activities of public colleges requires accrual of interest and amortization of debt discount and premium.

Accepted Answer

GASB (Governmental Accounting Standards Board) requires public colleges to follow accrual accounting for their business-type activities, which includes the accrual of interest and the amortization of debt discount and premium.

Question 17

Special-purpose governments generally provide a limited set of services or programs.

Accepted Answer

Special-purpose governments are typically created to provide a specific set of services or programs, such as water and sewer utilities or school districts, rather than a broad range of services like general-purpose governments.

Question 18

Public colleges do not have the power to issue debt; it must be issued by the state as general obligation debt.

Accepted Answer

Public colleges can issue their own debt, often in the form of revenue bonds, which are not backed by the state's general obligation but by the revenue generated by the college itself.

Question 19

Special-purpose governmental entities that are engaged in a single governmental-type activity only are required to prepare only the statements required for governmental fund basis financial statements.

Accepted Answer

The answer of Special-purpose governmental entities that are engaged in...

Question 20

Financial reporting for a special-purpose local government depends on whether that government is engaged in governmental-type,business-type or fiduciary-type activities.

Accepted Answer

Financial reporting for a special-purpose local government depends on the type of activities it engages in, whether governmental-type, business-type or fiduciary-type.

Quiz 9: Advanced Topics for State and Local Governments