Deck 13: Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations

Question 1

For personal financial statements, the statement of changes in net worth replaces the income statement.

Answer 1

True

Question 2

Cash receipts and disbursements, of governmental agencies, related to the payment of interest and principal on long-term debt describe which of the following?

A) appropriations
B) debt service
C) capital projects
D) general fund
E) proprietary funds

Answer 2

B

Question 3

The basic statement prepared for personal financial statements is the statement of changes in net worth.

Answer 3

False

Question 4

For a statement of financial condition, the figure that will usually be most important is the total asset amount.

Question 5

Which of the following would not likely be a reason for preparing personal financial statements?

A) obtaining personal credit
B) determining the tax basis of marketable securities
C) income tax planning
D) retirement planning
E) estate planning

Question 6

Under GASB Statement No.34, which of the following is not a minimum requirement for general purpose external financial statements-state and local governments?

A) Management's Discussion and Analysis
B) government-wide financial statements
C) fund financial statements
D) notes to the financial statements
E) cash projected financial statements

Question 7

For a statement of changes in net worth, which of the following would be a realized decrease in net worth?

A) dividend income
B) change in value of land
C) decrease in value of boat
D) personal expenditures
E) salary

Question 8

For personal financial statements, the statement of financial condition is similar to a balance sheet.

Question 9

Which of the following would not be an acceptable presentation on a personal financial statement?

A) Marketable securities are presented at estimated current values.
B) The estimated current value of an investment in life insurance is the cash value of the policy less the amount of any loans against it.
C) Investments in real estate should be presented at their estimated current values.
D) Payables and other liabilities should be presented at the discounted amounts of cash to be paid.
E) The liability for income taxes payable includes unpaid income taxes for completed tax years only.

Question 10

Personal financial statements predominately use historical cost information.

Question 11

For a statement of changes in net worth, which of the following would be an unrealized decrease in net worth?

A) decrease in value of furnishings
B) salary
C) income taxes
D) increase in value of land
E) interest income

Question 12

Government-wide financial statements help users do all but which of the following?

A) Relate cash receipts and disbursements to the acquisition of long-lived assets.
B) Assess the finances of the government in its entirety, including the year's operating results.
C) Determine whether the government's overall financial position improved or deteriorated.
D) Evaluate whether the government's current-year revenues were sufficient to pay for current-year services.
E) Make better comparisons between governments.

Question 13

Which of the following is not an example of a nonprofit institution?

A) university
B) hospital
C) state government
D) church
E) none of the answers are correct

Question 14

In accounting for governments, which of the following provides necessary resources and the authority for their disbursements?

A) general fund
B) encumbrances
C) internal services
D) appropriations
E) special assessments

Question 15

Which of the following would not be a source of information for personal financial statements?

A) broker's statements
B) income tax returns
C) safe deposit box
D) checkbook
E) all of the answers would be a source of information

Question 16

Which of the following would not be a reasonable suggestion for reviewing the Statement of Financial Condition?

A) Determine unrealized increases in net worth.
B) Determine the personal net worth amount.
C) Determine the amounts of the assets that are very liquid.
D) Determine the due period of liabilities.
E) Compare specific assets and specific liabilities, indicating net investment in assets.

Question 17

The accounting for a nonprofit institution does not include a single entity concept or efficiency.

Question 18

All cash receipts and disbursements, of governmental agencies, not required to be accounted for in another fund are accounted for in which of the following funds?

A) fiduciary fund
B) proprietary fund
C) general fund
D) debt service fund
E) special assessment fund

Question 19

The statement of changes in net worth is presented in terms of realized increases (decreases) and unrealized increases (decreases).

Question 20

Personal financial statements are financial statements of individuals, husband and wife, or a larger family group.

Question 21

Using appropriate interest rates at the date of the financial statements, personal financial statements should present receivables at the discounted amounts of cash the person estimates will be collected.

Question 22

Under GASB Statement No.34, a government entity will not continue to present fund statements.

Question 23

The rating for an industrial revenue bond represents the probability of default by the governmental unit.

Question 24

The budget for a state or local government is merely a plan of future revenues and expenses.

Question 25

The GASB has a seven-member board.A simple majority of four is needed to issue a pronouncement.

Question 26

Some government and not-for-profit organizations have added budgeting by objectives and/or measures of productivity to their financial reporting.

Question 27

Under governmental accounting, a fund is defined as a fiscal and accounting entity with a self-balancing set of accounts.

Question 28

GASB Statement No.34 makes it clear that government-wide statements are considered superior to fund statements.

Question 29

Several procedures or combinations of procedures may be used to determine the estimated current value of a closely held business.

Question 30

Nonprofit institutions, other than governments, use forms of financial reporting that vary from the fund type of system to a commercial type of reporting.

Question 31

The principal of fiduciary funds may be distributed.

Question 32

In general, SFAS No.116 directs that contributions received by not-for-profit organizations are recognized as revenues in the period received at their fair value.

Question 33

Under GASB Statement No.34, the notes to the financial statements must include budgetary information that includes the original budget and revised budgets.

Question 34

Personal financial statements present assets at their historical cost.

Question 35

State and local governments serve as a steward over public funds.This stewardship responsibility dominates the accounting for state and local governments.

Question 36

The statement of changes in net worth is required when presenting personal financial statements.

Question 37

For the government-wide statements, governmental activities are to be presented separately from the financial statements of business-type activities.

Question 38

Under GASB Statement No.34, the basic financial statements are to be preceded by the management's discussion and analysis (MD&A).

Question 39

GASB Statement No.34 calls for financial statements integrated with government-wide reporting and enhanced fund reporting.

Question 40

The Governmental Accounting Standards Board is a branch of the Financial Accounting Foundation.

Question 41

The financial data of the component units are included with the government entities reporting entity because of the significance of their operational or financial relationships with the government entity.