CGFM #2: Chapter 5 (Sec 2 Ch 1)Correctly answered to pass 2023

CGFM #2: Chapter 5 (Sec 2 Ch 1)Correctly answered to pass 2023Financial Accounting Foundation - correct answer full time chairman + 6 part time members professional staff from various accounting sectors appoints members to Governmental Accounting Standards Advisory Council (GASAC), an advisor to GASB users of financial reports - correct answer citizens, including media & public interest groups legislative and oversight bodies investors and creditors program managers are users but they're internal users and GASB doesn't set standards for internal reporting objectives of financial reporting - correct answer - accountability and transparency ---sufficient current resources ---transactions allowable and within requirements ---demonstrate efforts and accomplishments -evaluation of operating results ---sources and uses of financial resources ---sources of financing and meeting of cash requirements ---change in financial position as a result of operations -assess level of services that can be provided and ability to meet obligations ---financial position and condition ---assets and useful lives and their potential ---legal and contractual restrictions and risks of potential loss financial reporting entity (definition of) - correct answer primary government + component units component unit (definition of) - correct answer organizations for which the primary government is financially accountable and other organizations for which the nature and significance are such that their exclusion would cause the reporting entity's financial statements to be misleading. May be legally separate organizations. Need to consider the complexity of legal, financial or administrative issues between the primary government and potential component units. primary government (definition of) - correct answer any state or general-purpose local government (municipality, township, county) a special-purpose government may be a primary government if: - correct answer -is legally separate -has a separately elected governing body -financially independent of other state and local governments a special-purpose government is financially independent if it can: - correct answer -determine budget without another government's substantive authority to approve and modify -levy taxes or set rates or charges without substantive approval of another government -issue bonded debt without substantive approval of another government determining component units - correct answer -legal standing: is a component unit if not ---legally separate from primary government? ---corporate powers? -financial accountability: will be a component unit if: ---primary gov't appoints majority of governing body and impose will or potentially provide funds or impose financial burdens on ---fiscally dependent on primary government