Question 1

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?

Accepted Answer

The general fund is the main operating fund for governmental agencies and is used to account for all financial transactions not accounted for in other funds. This includes cash receipts and disbursements that are not required to be reported in fiduciary funds or proprietary funds. The debt service fund is used to account for payments of principal and interest on long-term debt, while special assessment funds are used to account for funds collected for a specific purpose, such as road improvements or utility expansions.

Question 2

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

Accepted Answer

Personal expenditures represent a realized decrease in net worth as they are actual outflows of cash or resources, reducing the overall net worth.

Question 3

Personal financial statements predominately use historical cost information.

Accepted Answer

False

Question 4

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

Accepted Answer

The most important figure in a statement of financial condition is typically the net worth or equity, which represents the difference between total assets and total liabilities.

Question 5

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

Accepted Answer

Determining unrealized increases in net worth is not typically a part of reviewing the Statement of Financial Condition. This statement focuses on the current financial status, including assets, liabilities, and net worth, rather than unrealized gains or increases in net worth. Unrealized gains are potential increases in the value of assets that have not yet been sold or realized, which is more relevant to investment or portfolio management rather than assessing the current financial condition.

Question 6

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

Accepted Answer

In personal financial statements, the statement of changes in net worth is used instead of the income statement. This is because personal financial statements focus on changes in an individual's net worth, which includes both income and expenses as well as changes in assets and liabilities. The statement of changes in net worth provides a comprehensive view of an individual's financial position and is therefore more appropriate than the income statement in this context.

Question 7

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

Accepted Answer

All the options listed can provide information relevant to personal financial statements, such as assets, liabilities, income, and expenses.

Question 8

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

Accepted Answer

Personal financial statements are indeed financial statements of individuals, husband and wife or a larger family group. These statements may include an income statement, balance sheet, statement of cash flows, and any other relevant financial information about the individual or family’s financial situation.

Question 9

The principal of fiduciary funds may be distributed.

Accepted Answer

Fiduciary funds are held in trust and are not meant to be distributed; they are managed for the benefit of others.

Question 10

Which of the following is not an example of a not-for-profit institution?

Accepted Answer

The answer of Which of the following is not an...

Question 11

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

Accepted Answer

The statement of financial condition in personal financial statements is similar to a balance sheet as it reports the individual's assets, liabilities, and net worth at a specific point in time.

Question 12

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

Accepted Answer

The payment of interest and principal on long-term debt is known as debt service. Therefore, cash receipts and disbursements related to debt service are classified as part of debt service.

Question 13

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

Accepted Answer

Appropriations are the legal authority to spend resources and provide the necessary resources for the government's various activities and programs. Appropriations are usually established annually by the legislative body, and the funds must be used for the specific purposes set forth in the appropriation. General fund is a fund used for general government purposes, internal services relate to services provided by one department to another within the same government, encumbrances refer to commitments for goods and services that have not yet been paid for or received, and special assessments are charges imposed on property owners for the cost of specific improvements or services.

Question 14

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

Accepted Answer

The accounting for a nonprofit institution does not include a single entity concept because it is not a single entity. It is a group of individuals or organizations that have come together for a common purpose. The efficiency of a nonprofit institution is not measured in the same way as the efficiency of a for-profit organization.

Question 15

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

Accepted Answer

Cash projected financial statements are not a minimum requirement under GASB Statement No. 34. The other options - management's discussion and analysis, government-wide financial statements, fund financial statements, and notes to the financial statements - are all minimum requirements for general purpose external financial statements for state and local governments under GASB Statement No. 34.

Question 16

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

Accepted Answer

Determining the tax basis of marketable securities would typically not require the preparation of personal financial statements as the basis can be determined from purchase and sale records. Personal financial statements are typically prepared for reasons such as obtaining personal credit, income tax planning, retirement planning, and estate planning.

Question 17

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

Accepted Answer

The statement of changes in net worth typically includes both realized and unrealized increases or decreases in value. Realized gains or losses are from actual transactions or sales, while unrealized gains or losses come from changes in the value of investments or assets that have not yet been sold.

Question 18

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

Accepted Answer

Government-wide financial statements do not relate cash receipts and disbursements to the acquisition of long-lived assets. However, they do help users assess the finances of the government in its entirety, determine whether the government's overall financial position improved or deteriorated, evaluate whether the government's current-year revenues were sufficient to pay for current-year services, and make better comparisons between governments.

Question 19

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

Accepted Answer

The basic statements prepared for personal financial statements typically include the balance sheet (or statement of financial position) and the income statement (or statement of income and expenses). The statement of changes in net worth is not considered a basic statement but can be derived from these primary statements.

Question 20

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

Accepted Answer

A decrease in value of furnishings is an unrealized decrease in net worth because it represents a loss in the value of an asset, but does not involve an actual cash outflow. Salary, income taxes, interest income, and increase in value of land are all realized changes in net worth as they reflect actual inflows or outflows of cash or increase in the value of assets.

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