Question 1

The fund statements for governmental funds are presented using the

Accepted Answer

Governmental funds, such as the general fund, special revenue funds, and capital projects funds, are presented using the Current Financial Resources Measurement focus and the Modified Accrual Basis of Accounting. This is because these funds focus on the inflows and outflows of expendable financial resources within a short time frame, usually one fiscal year. The Modified Accrual Basis of Accounting recognizes revenues when they are measurable and available and recognizes expenditures when the related fund liability is incurred.

Question 2

Which organizations have established a hierarchy of GAAP for financial statements preparers?
 List one category A and one category B item for each organization.

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Question 3

Which of the following is not one of the information needs of users of non-business financial statements according to FASB's Statement of Financial Accounting Concepts No.4?
A. Providing information that is useful to present and potential resource providers in making decisions about the allocation of resources.
B. Providing information that is useful to present and potential resource providers in assessing the services that a non-business organization provides and its ability to continue to provide those services.
C. Providing information that is useful to present and potential resource providers in assessing management's stewardship and performance.
D. Providing information that is useful to present and potential resource providers in evaluating an organization's service efforts and accomplishments.

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Question 4

Contrast the economic resources measurement focus and the current financial resources measurement focus with regard to the accounting treatment of capital assets.

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Question 5

In its Statement of Financial Accounting Concepts #4,the FASB identifies the information needs of the users of non-business financial statements.These include providing information that is useful to present and potential resource providers in which four evaluation areas?

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Question 6

Name three of the six Statements of Federal Financial Accounting concepts (SFFAC's)issued by the FASAB:

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Question 7

Financial reports for state and local governments are used for all the following EXCEPT?

Accepted Answer

Financial reports for state and local governments are used to assess financial condition and results of operations, compare actual results with the legally adopted budget, and assist in determining compliance with finance-related laws and regulations. However, they are not used to directly measure the effectiveness of government services such as police and fire protection. That would require separate performance reports or evaluations.

Question 8

Which of the following is not of the information needs of users of non-business financial statements according to FASB's Statement of Financial Accounting Concepts No.4?

Accepted Answer

According to FASB's Statement of Financial Accounting Concepts No.4, providing information that is useful to recipients of services provided by non-business organizations is not one of the information needs of users of non-business financial statements. The other options (B, C, and D) are all listed as information needs of users.

Question 9

What are the four objectives that should be followed with respect to federal financial reporting according to SFFAC #1 as issued by the FASAB?

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Question 10

Why did governmental accounting practices develop with a focus on the sources and uses of expendable funds rather than on net income?

Accepted Answer

Governmental accounting practices developed with a focus on the sources and uses of expendable funds rather than on net income because tax and other non-exchange revenues are not equivalent to sales. Government entities do not operate to earn a profit, and their sources of revenue are fundamentally different from those of private organizations. Therefore, it is not appropriate to use net income as the main focus of governmental accounting practices. Instead, the focus is on understanding and managing the sources and uses of expendable funds, which are primarily from taxes and other non-exchange revenues.

Question 11

Identify the three basic fund categories,the funds that make up each of them,and the category's basis of accounting.

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Question 12

The GASB is under the oversight of:

Accepted Answer

The Governmental Accounting Standards Board (GASB) is overseen by the Financial Accounting Foundation (FAF), which appoints the members of the GASB and provides funding for its operations.

Question 13

Contrast revenue recognition under the accrual and modified accrual bases of accounting.

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Question 14

What type of fund is used when resources are provided mainly through business like transactions to parties external to the government?

Accepted Answer

Enterprise Funds are used when resources are provided mainly through business-like transactions to parties external to the government. These funds are used for activities that operate in a manner similar to private businesses and where the intent is to recover the cost of providing goods or services through user charges. Examples include water and sewer utilities and public transportation systems.

Question 15

Identify the accounting standard setting bodies for U.S.commercial,private not-for-profits,public not-for-profits,state and local governments,and the federal government.

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Question 16

Which of the following funds is used to account for the payment of principal and interest of general long term debt of a government?

Accepted Answer

The Debt Service Fund is specifically used to account for the payment of principal and interest of long-term debt of a government, including general long-term debt. The General Fund is the primary operating fund for a government, the Agency Fund is used to account for assets held by a government as an agent for individuals or other entities, and the Capital Projects Fund is used to account for the construction or acquisition of major capital facilities or projects.

Question 17

The Financial Accounting Standards Board (FASB)is the standard setting organization for which of the following reporting organizations?

Accepted Answer

The Financial Accounting Standards Board (FASB) is responsible for setting accounting standards for both private not-for-profits and investor-owned businesses. However, it does not set standards for public not-for-profits, which are instead governed by the Governmental Accounting Standards Board (GASB).

Question 18

What is the significance of a budget to a government?

Accepted Answer

Budgets carry the full authority of the law, meaning that they set the legal limits on government spending and revenue collection. This makes them crucial tools for governments in managing their finances and ensuring accountability to the public. Budgets are also essential for ensuring that government resources are allocated in a fair and effective manner, and for providing a basis for evaluating government performance over time.

Question 19

What are the five environmental factors relating to how governments are different from commercial businesses as described by GASB in a white paper published entitled:
 Why Governmental Accounting and Financial Reporting Is - and Should Be - Different:

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Question 20

Contrast the economic resources measurement focus and the current financial resources measurement focus with regard to the accounting treatment of long-term debt.

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