GOVT 404: Constitutional Law
⩥ Which of the following bodies has been established to recommend
accounting and financial reporting standards for the federal government?
Answer: Federal Accounting Standards Advisory Board (FASAB)
⩥ Which of the following groups is considered a primary user of a state
or local government's general-purpose external financial statements?
Answer: Citizens
⩥ Which of the following would typically not be included in the
introductory section of a comprehensive annual financial report?
Answer: Summary of the government's current financial position and
results of financial activities
⩥ Which of the following is not classified as a support activity reported
by not-for-profit entities? Answer: Program expenses.
⩥ Governments and not-for-profit organizations have several
characteristics that distinguish them from business organizations. Which
of the following is one of those characteristics? Answer: Sources of
revenue
Operating purpose
Ownership interest
,⩥ The Financial Accounting Foundation (FAF) oversees and appoints
board members to which of the following standard setting bodies?
Answer: Financial Accounting Standards Board (FASB) and the
Governmental Accounting Standards Board (GASB).
⩥ The federal government prepares a performance and accountability
report. The purpose(s) of the performance and accountability report
include which of the following? Answer: Help users assess financial
performance and management performance. Correct
⩥ Explain the essential differences between general purpose and special
purpose governments and give several examples of each. Answer:
General purpose: Governemments that provide a wide range of services
to their residents (such as: fire protection, sanitation, construction and
maintenance of streets, roads, and bridges, and culture and recreation).
Examples include States, Counties, Municipalities, and Townships
Special Purpose: Governments that provide only a single function or a
limited number of functions (such as education. drainage and flood
control, irrigation, soil and water conservation, fire protection, and water
supply). Examples include independent school districts, public colleges
and universities, and special districts
⩥ Identify and explain the characteristics that distinguish governments
and not-for-profit entities from business entities. Answer: Governments
and not-for-profit entities (nonbusiness entities) do not have owners who
expect a return on their investment. Resource providers to these entities
do not expect to be repaid or to receive economic benefits in proportion
to the resources provided. Governments and not-for-profit entities do not
operate to make a profit on goods or services provided. On the other
, hand, business entities do have owners whose interests can be
transferred to others and who expect a share of the profits from
operating the business and a residual distribution of the net assets in the
case of liquidation of the organization (see FASB Concepts Statements).
⩥ 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? Answer: Agree. Both the Governmental Accounting
Standards Board (GASB) and the Financial Accounting Standards Board
(FASB) issue standards for external users of financial information—
those who lack the authority to prescribe information they want and who
must rely on the information management communicates to them. By
contrast, the Federal Accounting Standards Advisory Board (FASAB)
has identified users who are both internal and external to the
government: citizens, the Congress, executives, and program managers.
Not surprisingly, then, its standards address both internal and external
financial information needs.
⩥ According to the GASB definition, which of the following represents
an inflow of resources? Answer: Revenues
⩥ Which of the following is not one of the methods recommended by
the GASB Concepts Statement 3 for communicating information to
external users of government financial reports?
-Providing a popular report.
-Recognition in the financial statements.
-Presentation as required supplementary information.
⩥ Which of the following bodies has been established to recommend
accounting and financial reporting standards for the federal government?
Answer: Federal Accounting Standards Advisory Board (FASAB)
⩥ Which of the following groups is considered a primary user of a state
or local government's general-purpose external financial statements?
Answer: Citizens
⩥ Which of the following would typically not be included in the
introductory section of a comprehensive annual financial report?
Answer: Summary of the government's current financial position and
results of financial activities
⩥ Which of the following is not classified as a support activity reported
by not-for-profit entities? Answer: Program expenses.
⩥ Governments and not-for-profit organizations have several
characteristics that distinguish them from business organizations. Which
of the following is one of those characteristics? Answer: Sources of
revenue
Operating purpose
Ownership interest
,⩥ The Financial Accounting Foundation (FAF) oversees and appoints
board members to which of the following standard setting bodies?
Answer: Financial Accounting Standards Board (FASB) and the
Governmental Accounting Standards Board (GASB).
⩥ The federal government prepares a performance and accountability
report. The purpose(s) of the performance and accountability report
include which of the following? Answer: Help users assess financial
performance and management performance. Correct
⩥ Explain the essential differences between general purpose and special
purpose governments and give several examples of each. Answer:
General purpose: Governemments that provide a wide range of services
to their residents (such as: fire protection, sanitation, construction and
maintenance of streets, roads, and bridges, and culture and recreation).
Examples include States, Counties, Municipalities, and Townships
Special Purpose: Governments that provide only a single function or a
limited number of functions (such as education. drainage and flood
control, irrigation, soil and water conservation, fire protection, and water
supply). Examples include independent school districts, public colleges
and universities, and special districts
⩥ Identify and explain the characteristics that distinguish governments
and not-for-profit entities from business entities. Answer: Governments
and not-for-profit entities (nonbusiness entities) do not have owners who
expect a return on their investment. Resource providers to these entities
do not expect to be repaid or to receive economic benefits in proportion
to the resources provided. Governments and not-for-profit entities do not
operate to make a profit on goods or services provided. On the other
, hand, business entities do have owners whose interests can be
transferred to others and who expect a share of the profits from
operating the business and a residual distribution of the net assets in the
case of liquidation of the organization (see FASB Concepts Statements).
⩥ 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? Answer: Agree. Both the Governmental Accounting
Standards Board (GASB) and the Financial Accounting Standards Board
(FASB) issue standards for external users of financial information—
those who lack the authority to prescribe information they want and who
must rely on the information management communicates to them. By
contrast, the Federal Accounting Standards Advisory Board (FASAB)
has identified users who are both internal and external to the
government: citizens, the Congress, executives, and program managers.
Not surprisingly, then, its standards address both internal and external
financial information needs.
⩥ According to the GASB definition, which of the following represents
an inflow of resources? Answer: Revenues
⩥ Which of the following is not one of the methods recommended by
the GASB Concepts Statement 3 for communicating information to
external users of government financial reports?
-Providing a popular report.
-Recognition in the financial statements.
-Presentation as required supplementary information.
