Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)  The General Fund. 
B)  The governmental activities journal. 
C)  The business-type activities journal. 
D)  The general capital assets fund.

Question 3

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?

Accepted Answer

The answer of Describe the comprehensive annual financial report (CAFR)described...

Question 4

Which of the following is a fiduciary fund?

Accepted Answer

A)  Investment trust fund. 
B)  Special revenue fund. 
C)  Debt service fund. 
D)  Enterprise fund.

Question 5

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.

Accepted Answer

A) True 
 B)False

Question 6

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?

Accepted Answer

A)  Private-purpose trust fund. 
B)  Debt service fund. 
C)  Principal and interest trust fund. 
D)  Internal service fund.

Question 7

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

Accepted Answer

A)  An enterprise fund. 
B)  A special revenue fund. 
C)  The General Fund. 
D)  An internal service fund.

Question 8

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.

Accepted Answer

A) True 
 B)False

Question 9

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.

Accepted Answer

A) True 
 B)False

Question 10

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?

Accepted Answer

The answer of Explain the difference between measurement focus and...

Question 11

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.

Accepted Answer

A) True 
 B)False

Question 12

Governments must present three sets of fund financial statements.

Accepted Answer

A) True 
 B)False

Question 13

"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.

Accepted Answer

The answer of "The primary purpose of an accounting system...

Question 14

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

Accepted Answer

The answer of Describe the basic financial statements required by...

Question 15

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.

Accepted Answer

A) True 
 B)False

Question 16

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.

Accepted Answer

The answer of Explain the nature of the three major...

Question 17

Budgetary comparison schedules presenting budgeted versus actual revenues and expenditures are

Accepted Answer

A)  Optional under GASB standards for all funds. 
B)  Required by GAAP for internal management reports only; not permitted for external financial reporting. 
C)  Required by GAAP for the General Fund and major special revenue funds for which an annual budget has been legally adopted. 
D)  Required by GAAP for all governmental fund types.

Question 18

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

Accepted Answer

A)  Governmental funds. 
B)  Fiduciary funds. 
C)  Proprietary funds. 
D)  Contribution funds.

Question 19

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

Accepted Answer

A)  Private-purpose trust fund. 
B)  Internal service fund. 
C)  Permanent fund. 
D)  Enterprise fund.

Question 20

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

Accepted Answer

A) True 
 B)False

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?

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.

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.