Question 1

The Governmental Accounting Standards Board (GASB)is the body authorized to establish accounting principles for all state and local governments,both general purpose and special purpose.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following distinguishes governments from nongovernmental not-for-profit organizations?

Accepted Answer

A) Absence of profit motive. 
B) The power to enact and enforce a tax levy. 
C) Resource providers do not expect benefits proportional to the resources provided. 
D) Absence of a defined ownership interest that can be sold,transferred,or redeemed.

Question 3

Explain the essential differences between general purpose and special purpose governments and give several examples of each.

Accepted Answer

The answer of Explain the essential differences between general purpose...

Question 4

Describe the difference between a comprehensive annual financial report (CAFR)and the GASBS 34 financial reporting model for state and local governments.

Accepted Answer

The answer of Describe the difference between a comprehensive annual...

Question 5

Explain what distinguishes governmental not-for-profit organizations from nongovernmental,not-for-profit organizations.Why is such a distinction necessary?

Accepted Answer

The answer of Explain what distinguishes governmental not-for-profit organizations from...

Question 6

A comprehensive annual financial report (CAFR)prepared in conformity with GASB recommendations should include which of the following sections?

Accepted Answer

A) Letter of transmittal,MD&A,and financial. 
B) Introductory,financial,and statistical. 
C) Introductory,MD&A,and financial. 
D) Letter of transmittal,financial,and supplementary.

Question 7

Why should persons interested in reading financial reports of governmental and not-for-profit entities be familiar with standards set by the GASB and FASB?

Accepted Answer

The answer of Why should persons interested in reading financial...

Question 8

Which of the following organizations issue standards that are intended for both internal and external users of financial information?

Accepted Answer

A) Federal Accounting Standards Advisory Board. 
B) Governmental Accounting Standards Board. 
C) Financial Accounting Standards Board. 
D) American Institute of CPAs.

Question 9

In your own words state the primary uses the GASB believes external users have for financial reports of state and local governments.For contrast,state the uses the FASB believes external users have for the financial reports of not-for-profit organizations.

Accepted Answer

The answer of In your own words state the primary...

Question 10

The governmental fund financial statements are intended to report on fiscal accountability.

Accepted Answer

A) True 
 B)False

Question 11

Interperiod equity refers to the concept that current-year revenues are sufficient to pay for services provided that year,so that future taxpayers will not be required to assume the burden for services previously provided.

Accepted Answer

A) True 
 B)False

Question 12

What information is the Management Discussion and Analysis (MD&A)intended to provide?

Accepted Answer

The answer of What information is the Management Discussion and...

Question 13

A statistical section should be included in

Accepted Answer

A) A comprehensive annual financial report (CAFR). 
B) The basic financial statements. 
C) The notes to the financial statements. 
D) Required supplementary information,other than MD&A.

Question 14

GASB and FASB standards are concerned only with external financial reporting whereas FASAB standards are concerned with both internal and external financial reporting.Do you agree with this statement? Why or why not?

Accepted Answer

The answer of GASB and FASB standards are concerned only...

Question 15

Distinguish between combining financial statements of a governmental entity and basic financial statements.

Accepted Answer

The answer of Distinguish between combining financial statements of a...

Question 16

The minimum requirements for general purpose external financial reporting are (1)management's discussion and analysis (MD&A), (2)the basic financial statements,including the notes to the financial statements,and (3)combining and individual fund financial statements.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following would typically not be included in the introductory section of a comprehensive annual financial report?

Accepted Answer

A) Title and contents page. 
B) Letter of transmittal. 
C) A description of the government. 
D) Summary of the government's current financial position and results of financial activities.

Question 18

Which of the following would be included in a properly prepared comprehensive annual financial report (CAFR),but not in the minimum requirements for general purpose financial reporting specified by GASBS 34?

Accepted Answer

A) Management discussion and analysis (MD&
A) . 
B) Government-wide financial statements. 
C) Notes to the financial statements. 
D) Combining and individual fund financial statements.

Question 19

All of the following characteristics may indicate that an organization is governmental in nature except:

Accepted Answer

A) The organization is a public corporation or body corporate and politic. 
B) Popular election of officers or appointment of a controlling majority of the organization's governing board by officials of a state or local government. 
C) The organization is legally separate and its governing body has discretion to manage the organization's affairs without approval by a government. 
D) The power to enact and enforce a tax levy.

Question 20

The Financial Accounting Standards Board has the responsibility for setting accounting and financial reporting standards for

Accepted Answer

A) All not-for-profit organizations that are nongovernmental and business entities. 
B) All special purpose governments. 
C) All not-for-profit organizations. 
D) All federal government agencies.

Exam 1: Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Entities

The Governmental Accounting Standards Board (GASB)is the body authorized to establish accounting principles for all state and local governments,both general purpose and special purpose.

Which of the following distinguishes governments from nongovernmental not-for-profit organizations?

Explain the essential differences between general purpose and special purpose governments and give several examples of each.

Describe the difference between a comprehensive annual financial report (CAFR)and the GASBS 34 financial reporting model for state and local governments.

Explain what distinguishes governmental not-for-profit organizations from nongovernmental,not-for-profit organizations.Why is such a distinction necessary?

A comprehensive annual financial report (CAFR) prepared in conformity with GASB recommendations should include which of the following sections?

Why should persons interested in reading financial reports of governmental and not-for-profit entities be familiar with standards set by the GASB and FASB?

Which of the following organizations issue standards that are intended for both internal and external users of financial information?

In your own words state the primary uses the GASB believes external users have for financial reports of state and local governments.For contrast,state the uses the FASB believes external users have for the financial reports of not-for-profit organizations.

The governmental fund financial statements are intended to report on fiscal accountability.

Interperiod equity refers to the concept that current-year revenues are sufficient to pay for services provided that year,so that future taxpayers will not be required to assume the burden for services previously provided.

What information is the Management Discussion and Analysis (MD&A)intended to provide?

A statistical section should be included in

GASB and FASB standards are concerned only with external financial reporting whereas FASAB standards are concerned with both internal and external financial reporting.Do you agree with this statement? Why or why not?

Distinguish between combining financial statements of a governmental entity and basic financial statements.

The minimum requirements for general purpose external financial reporting are (1)management's discussion and analysis (MD&A), (2)the basic financial statements,including the notes to the financial statements,and (3)combining and individual fund financial statements.

Which of the following would typically not be included in the introductory section of a comprehensive annual financial report?

Which of the following would be included in a properly prepared comprehensive annual financial report (CAFR) ,but not in the minimum requirements for general purpose financial reporting specified by GASBS 34?

All of the following characteristics may indicate that an organization is governmental in nature except:

The Financial Accounting Standards Board has the responsibility for setting accounting and financial reporting standards for