Exam 2: Principles of Accounting and Financial Reporting for State and Local Governments

Because budgetary accounts are used by governments,their financial statements can never be said to be in accord with generally accepted accounting principles.

Capital assets used by departments accounted for by the General Fund of a governmental unit should be accounted for in

Describe the comprehensive annual financial report (CAFR)described in the Annual Financial Reports principle.What are the sections of the report and which components of the organization should it include? Is a CAFR required?

Which of the following is a fiduciary fund?

An objective of the accounting system for a state or a local government is to make it possible both to present fairly the funds and activities of the government in conformity with generally accepted accounting principles and to demonstrate compliance with finance-related legal and contractual provisions.

Financial resources set aside to pay principal and interest on general long-term debt may be accounted for in which of the following fund types?

The activities of a water utility department,which offers its services to the general public on a user charge basis,should be accounted for in

Individual fund financial information is reported in separate columns of governmental and proprietary fund financial statements for only those funds that meet the GASB size-related criteria as major funds.

Governmental funds are identical to governmental activities,proprietary funds are identical to business-type activities,and fiduciary funds are identical to fiduciary activities of a government.

Explain the difference between measurement focus and basis of accounting.Also,explain the difference between the economic resources measurement focus and the current financial resources measurement focus as well as the difference between the accrual and modified accrual bases of accounting.Which funds and government-wide activities use each focus and each basis?

Governments can,in part,demonstrate operational accountability by reporting proprietary and fiduciary fund financial information,as well as all government-wide financial information,using an economic resources measurement focus and the accrual basis of accounting.

Governments must present three sets of fund financial statements.

"The primary purpose of an accounting system for a state or a local government is to make it possible for financial statements to demonstrate compliance with finance-related legal and contractual provisions." Explain why you believe this statement to be correct or incorrect.

Describe the basic financial statements required by GASB standards and briefly explain their purposes.

Economic resources are cash or items expected to be converted into cash during the current period,or soon enough thereafter to pay current period liabilities.

Explain the nature of the three major activity categories of a state or local government: governmental activities,business-type activities,and fiduciary activities.Provide examples of each.

Budgetary comparison schedules presenting budgeted versus actual revenues and expenditures are

The measurement focus and basis of accounting that are most unlike those used by business entities are those used by

Which of the following funds is a governmental fund-type?

All capital assets acquired by or used by a fund should be reported in the fund balance sheet or statement of net position.