Deck 14: Financial Reporting by the Federal Government

Question 1

The proprietary accounts of a federal agency reflect the status of an appropriation.

Answer 1

False

Question 2

Allotments are made at the agency level and assign portions of the appropriation to subunits or programs.

Answer 2

True

Question 3

Federal agencies must include a Managements' Discussion and Analysis in their financial report.

Answer 3

True

Question 4

The difference between assets and liabilities of a federal agency is comprised of Fund Balance and may be classified as Nonspendable,Committed,Restricted,Assigned and Unassigned.

Question 5

The proprietary accounts of a federal agency are used to prepare the accrual basis financial statements of the federal government and its agencies.

Question 6

The Statement of Net Cost of a federal agency is prepared on the accrual basis of accounting.

Question 7

The budgetary authority process for a federal agency begins with the Treasury Department issuing a warrant granting the agency the authority to withdraw funds.

Question 8

Federal agencies must include a Statement of Cash Flows in their annual report.

Question 9

The account Fund Balance with Treasury is classified as an asset on a federal agency's balance sheet.

Question 10

The Department of Treasury maintains a government-wide system of accounts and prepares the federal government's consolidated financial statements.

Question 11

Accounting standards for the federal government and its agencies are established by the Federal Accounting Standards Advisory Board.

Question 12

The Statement of Operations and Changes in Net Position for the consolidated report of the federal government is prepared on the modified accrual basis of accounting.

Question 13

The account Obligations - Undelivered Orders is credited when goods and services are received.

Question 14

The Federal Accounting Standards Advisory Board was formed by the Secretary of the Treasury,Director of OMB,and Comptroller General.

Question 15

The Statement of Custodial Activity is not required of every federal agency but is prepared by the SEC,IRS and Customs.

Question 16

The Statement of Budgetary Resources for a federal agency is prepared on the accrual basis.

Question 17

Accounting standards for the federal government and its agencies are established by the Government Accountability Office.

Question 18

Apportionments are issued by the OMB and establish the amount of an appropriation that will be available each quarter.

Question 19

The Statement of Changes in Net Position of a federal agency should articulate with net position on the agency's Balance Sheet.

Question 20

The net position of a federal agency is comprised of Cumulative Results of Operations and Unexpended Appropriations.

Question 21

Which of the following is (are)accurate regarding a federal agency's Statement of Net Costs?

A) Net costs reported on the Statement of Net Costs may differ from those appearing in the Statement of Changes in Net Position, since the latter are measured on the budgetary basis.
B) The Statement of Net Costs provides greater detail about the cost of the Agency's programs, but agrees in total net cost reported on the Statement of Changes in Net Position
C) Both (a) and (b) above
D) Neither (a) nor (b) above

Question 22

Which of the following is (are)true regarding Federal Accounting Standards Advisory Board?

A) The Board is called "Advisory" because Statements issued by the board are recommended accounting standards but are not "level A GAAP" for federal agencies
B) Statements issued by the board are recognized as the highest level of authoritative standard for federal government entities
C) Both (a) and (b) above
D) Neither (a) nor (b) above

Question 23

Which of the following is not required in a federal agency's financial report?

A) Management's Discussion and Analysis
B) Notes to the Financial Statements
C) Required Supplemental Information
D) Budgetary Comparison Schedule

Question 24

Which of the following is responsible for preparing the federal government's consolidated financial statements?

A) Government Accountability Office
B) Congressional Budget Office
C) Office of Management and Budget
D) Department of Treasury

Question 25

Which of the following is (are)true regarding the Chief Financial Officers Act?

A) The Act created the position of chief financial officer within federal agencies
B) The Act called for audits of the financial statements of federal agencies
C) Both (a) and (b) above
D) Neither (a) nor (b) above

Question 26

Which of the following is (are)accurate regarding a federal agency's Statement of Budgetary Resources?

A) The statement reports the status of budgetary resources at year end.
B) Outlays are measured using the budgetary basis of accounting.
C) Both (a) and (b)
D) Neither (a) nor (b)

Question 27

Which of the following does not appear in the federal government's consolidated financial report?

A) Management's Discussion and Analysis
B) Statement of Social Insurance
C) Statement of Cash Flows
D) Auditors Report

Question 28

Which of the following is (are)accurate regarding a federal agency's Statement of Changes in Net Position?

A) The statement starts with the beginning of year balances in the net position accounts and reconciles these to the ending balances appearing on the agency's Balance Sheet.
B) The statement does not report Appropriations Received since this is a budgetary account and does not affect net position.
C) Both (a) and (b) above
D) Neither (a) nor (b) above

Question 29

Which organization promulgates Statements of Federal Financial Accounting Standards?

A) The American Institute of Certified Public Accountants
B) The Federal Accounting Standards Advisory Board
C) The U.S. Office of Management and Budget
D) The U.S. Government Accountability Office

Question 30

Which of the following accounts are used to display the difference between assets and liabilities in a federal agency Balance Sheet?

A) Unrestricted Net Position, Restricted Net Position, and Net Investment in Capital Assets.
B) Unassigned, Assigned, Committed, Restricted and Nonspendable fund balance.
C) Unrestricted, Temporarily Restricted, and Permanently Restricted Net Assets
D) Unexpended Appropriations and Cumulative Results of Operations

Question 31

Which of the following is true regarding the Balance Sheet of a federal agency?

A) The balance sheet is prepared using the economic resource measurement focus and accrual accounting.
B) Assets are measured on the modified accrual basis.
C) The difference between assets and liabilities is termed "Net Assets".
D) Assets are separated between current and noncurrent.

Question 32

Which of the following organizations is (are)part of the executive branch of the federal government?

A) Government Accountability Office
B) Office of Management and Budget
C) Both (a) and (b) above
D) Neither (a) nor (b) above

Question 33

Which of the following is (are)true regarding the Government Accountability Office?

A) The GAO establishes accounting standards applicable to the federal government and its agencies
B) The GAO establishes auditing standards applicable to the federal government and its agencies
C) Both (a) and (b) above
D) Neither (a) nor (b) above

Question 34

Which of the following is accurate regarding a federal agency's Statement of Net Costs?

A) It is similar in presentation to the GASB government-wide Statement of Activities in that earned revenues are subtracted from costs to determine the net cost of government services.
B) Costs are reported within the broad categories of current, capital, and debt service.
C) Both (a) and (b) above
D) Neither (a) nor (b) above

Question 35

Which of the following is one of the principal organizations that formed the Federal Accounting Standards Advisory Board?

A) Department of Treasury
B) Congressional Budget Office
C) American Institute of CPAs
D) All of the above

Question 36

Which of the following should appear within the equity (net position)section of a federal agency balance sheet?

A) Net Position - Unexpended Appropriations
B) Fund Balance with Treasury
C) Both (a) and (b) above
D) Neither (a) nor (b) above

Question 37

Which of the following is responsible for auditing the federal government' consolidated financial statements?

A) Congressional Budget Office
B) US Department of Internal Audit
C) Office of Management and Budget
D) Government Accountability Office

Question 38

Which of the following is not required in a federal agency's financial report?

A) Statement of Budgetary Resources
B) Statement of Changes in Net Position
C) Statement of Cash Flows
D) Balance Sheet

Question 39

Federal agencies that are required to report a Statement of Custodial Activity have transactions that are similar to which fund type of a state or local government?

A) Agency funds
B) Internal service funds
C) Capital projects funds
D) Permanent funds

Question 40

Typically,budgetary authority that is not obligated by a federal agency before the end of the fiscal year rolls over and is available for the following fiscal year.

Question 41

Which of the following events will result in a journal entry being recorded in both the budgetary and proprietary accounts of a federal agency?

A) OMB establishes the amount of the total appropriation that the agency may expend in the first quarter.
B) Goods or services are received and approved for payment.
C) Both (a) and (b)
D) Neither (a) nor (b)

Question 42

Assume a spending bill has been passed by Congress and signed by the President. The journal entries at the agency level to record this event will include:

A) a debit to the account Unexpended Appropriations
B) a debit to the account Unapportioned Authority
C) a debit to the account Fund Balance with Treasury
D) None of the above

Question 43

Assume the OMB apportions 1/4^th of an appropriation to a federal agency for the first quarter of the fiscal year. The journal entries at the agency level to record this event will include:

A) a debit to the account Unexpended Appropriations
B) a debit to the account Unapportioned Authority
C) a credit to the account Fund Balance with Treasury
D) None of the above

Question 44

Which of the following statements appearing in the federal government's consolidated financial report are prepared on the accrual basis of accounting?

A) Balance Sheet
B) Statement of Operations and Changes in Net Position
C) Both (a) and (b) above
D) Neither (a) nor (b) above

Question 45

Operating Expense: Contracted Services is an example of which type of federal government account?
Budgetary Proprietary
Account Account

A) Yes Yes
B) No Yes
C) Yes No
D) No No

Question 46

At what point in the budgetary authority process may a federal agency or its subunits begin to place orders for goods and services?

A) Apportionment
B) Appropriation
C) Allotment
D) Obligation

Question 47

Which of the following steps in the budgetary authority process occurs when Congress passes a spending bill which is signed by the President?

A) Apportionment
B) Appropriation
C) Allotment
D) Obligation

Question 48

Which of the following are included in the Financial Snapshot section of the federal government's Citizen's Guide to the Financial Report of the US Government?

A) The Net Operating Cost of the federal government
B) The Net Position (assets minus liabilities) of the federal government
C) Both (a) and (b) above
D) Neither (a) nor (b) above

Question 49

Assume an outstanding account payable of a federal agency is paid.The journal entries at the agency level to record this event will include:

A) a debit to the account Accounts Payable
B) a credit to the account Cash
C) Both (a) and (b)
D) Neither (a) nor (b)

Question 50

Assume a federal agency places orders for contracted services supporting a federal program. The journal entries at the agency level to record this event will include:

A) a credit to the account Expended Appropriations
B) a debit to the account Allotments
C) Both (a) and (b)
D) Neither (a) nor (b)

Question 51

Which of the following steps in the budgetary authority process occurs when the Office of Management and Budget establishes the quarterly amount available to a federal agency for spending?

A) Apportionment
B) Appropriation
C) Allotment
D) Obligation

Question 52

Allotments is an example of which type of federal government account?
Budgetary Proprietary
Account Account

A) Yes Yes
B) No Yes
C) Yes No
D) No No

Question 53

Which of the following steps in the federal government's budgetary authority process is most similar to the recording of encumbrances by state and local governments?

A) Apportionment
B) Appropriation
C) Allotment
D) Obligation

Question 54

Assume a federal agency places orders for contracted services supporting a federal program. The journal entries at the agency level to record this event will include:

A) a debit to the account Allotments
B) a credit to the account Obligations - Undelivered Orders
C) Both (a) and (b)
D) Neither (a) nor (b)

Question 55

Which of the following are true of the proprietary accounts of the federal government?

A) The accounts provide a record by which federal expenditures may be traced to the budgetary authority granted by Congress.
B) The accounts are used to present the financial position and results of operations of the federal government and its agencies using the accrual basis of accounting.
C) Both (a) and (b) above
D) Neither (a) nor (b) above

Question 56

Assume the director of a federal agency allots a portion of the agency's apportionment to subunits within the agency. The journal entries at the agency level to record this event will include:

A) a debit to the account Apportionments
B) a debit to the account Allotments
C) a credit to the account Obligations - Undelivered Orders
D) None of the above

Question 57

Assume a federal agency receives supplies that had been previously ordered that will be used to support a federal program. The journal entries at the agency level to record this event will include:

A) a credit to a liability account such as Accounts Payable
B) a debit to the account Unexpended Appropriations
C) Both (a) and (b)
D) Neither (a) nor (b)

Question 58

Assume a federal agency has $ 150,000 of unobligated budgetary authority at the end of the fiscal year that must be returned to Treasury. The journal entry at the agency level to record this event in the proprietary accounts will include:

A) a debit to the account Unexpended Appropriations
B) a credit to the account Fund Balance with Treasury
C) Both (a) and (b)
D) Neither (a) nor (b)

Question 59

Which of the following steps in the budgetary authority process occurs when a federal agency issues a purchase order?

A) Apportionment
B) Appropriation
C) Allotment
D) Obligation

Question 60

Which of the following events will result in a journal entry being recorded in both the budgetary and proprietary accounts of a federal agency?

A) Treasury notifies the agency that Congress passed legislation (signed by the President) granting budgetary authority to fund its activities.
B) The agency places orders for goods or services.
C) Both (a) and (b)
D) Neither (a) nor (b)

Question 61

A federal agency prepared the following schedule showing the status of federal appropriations at the end of the first quarter:
What is the total amount of purchase orders placed in the first quarter of the year?

A) 30,000
B) 145,000
C) 175,000
D) 180,000

Question 62

Identify the primary functions of the following entities as they relate to financial reporting by the federal government:
a)Office of Management and Budget
b)Department of Treasury
c)Government Accountability Office

Question 63

Describe the purpose of the following:
a)Federal government budgetary accounts
b)Federal government proprietary accounts

Question 64

Assume a federal agency has the following events:
1.Receives a warrant from the Treasury notifying the agency of appropriations of $12,000,000.2.OMB apportions 1/4^th of the appropriation for the first quarter of the year.3.The Director of the agency allots $ 2,850,000 to program units.4.Program units place orders $ 2,790,000.5.Supplies ($ 490,000)and services ($ 2,291,000)are received and paid during the first quarter. Supplies of $ 417,000 were used in the quarter.
Required:
Prepare any necessary journal entries to reflect the events described above. Identify whether the entry is budgetary or proprietary.

Question 65

A federal agency prepared the following schedule showing the status of federal appropriations at the end of the first quarter:
What is the total amount allotted to subunits or programs within the agency during the first quarter of the year?

A) 15,000
B) 45,000
C) 190,000
D) 200,000

Question 66

Identify (in order of occurrence)the steps in the federal budgetary authority process.

Question 67

List the financial statements required of every federal government agency and indicate whether the statement is prepared using the accrual or budgetary basis of accounting.

Question 68

Assume a federal agency prepared the following journal entries during the first quarter of the year. Prepare a schedule showing the status of the appropriation at the end of the first quarter.