Deck 12: Financial Management: Accounting, Reporting, and Auditing

Question 1

Which of the following is the source of the generally accepted accounting principles (GAAP) used by state and local governments?

A) Governmental Accounting and Auditing Board
B) Governmental Accounting Standards Board
C) Government Finance Officers Association
D) Government Accountability Standards Board

Answer 1

B

Question 2

The basic equation that is used to double-check that all transactions have been properly recorded is fund balance equals assets minus:

A) outflows.
B) residuals.
C) receivables.
D) liabilities.

Answer 2

D

Question 3

Which of the following is not a good reason for standardizing public accounting?

A) Consistency between jurisdictions
B) Consistency among departments
C) Consistency over time
D) Consistency between the public and private sectors

Answer 3

D

Question 4

Borrowing against outstanding receivables such as taxes owed is known as:

A) creditizing.
B) securitizing.
C) offsetting.
D) transaction streaming.

Question 5

In public agencies, the general term for the accounting rules governing the timing of when a revenue item is recorded as received and when an expenditure is recorded as having occurred is called:

A) basis of accounting.
B) encumbrance accounting.
C) accrual accounting.
D) activity-based accounting.

Question 6

State and local government retirement systems have historically used which of the following types of pension plan?

A) Advanced funding plan
B) Defined benefit plan
C) Defined contribution plan
D) Pension benefit protection plan

Question 7

Which type of audit deals with whether resources are being used efficiently and whether results or objectives are being achieved?

A) Single audit
B) Preaudit
C) Financial audit
D) Performance audit

Question 8

True or false? Government balance sheets can be used to record assets like school buildings, public swimming pools, official vehicles, and municipal waste treatment facilities.

Question 9

A journal entry indicates the credits, but not the debits, involved in a transaction.

Question 10

Revenues derived from each tax source need to be recorded separately from revenues derived from user fees.

Question 11

While government practitioners and academic researchers in the field of budgeting have been concerned with measuring the results of public programs for a long time, accountants only became interested in the issue since 2010.

Question 12

Both public and private retirement systems are required to annually report assets, any changes in assets from year to year, and actuarial information on the long-term prospects of pension funds.

Question 13

The chief purpose of auditing is to ensure that funds are not subject to fraud, waste, abuse, or errors in reporting.

Question 14

In the accounting formula, what is the "fund balance"?

Question 15

Which financial statement presents a snapshot of an organization's finances at a point in time?

Question 16

What is the primary purpose of public accounting?

Question 17

What is identified as one of the main differences between public and private sector accounting?

Question 18

What is the difference between the general fund and special revenue funds?

Question 19

Why is "double-entry accounting" still used in public organizations?

Question 20

What federal legislation was aimed at upgrading accounting practices in publicly traded private companies to protect investors?

Question 21

What are the two main bases of accounting? What are the advantages and disadvantages of each?