Accounting for Governmental and Nonprofit Entities By Reck Lowensohn Wilson 16th Edition Test Bank

Accounting for Governmental and Nonprofit Entities By Reck Lowensohn Wilson 16th Edition Test Bank   Accounting for Governmental and Nonprofit Entities By Reck Lowensohn Wilson 16th Edition Test Bank ch1 Student: ___________________________________________________________________________ 1. General purpose governments provide a wide range of services to their residents, such as public safety, road maintenance, and health and welfare. True False 2. Examples of special purpose governments include public schools, libraries, and water supply plants that receive tax revenue to finance the services they provide. True False 3. The Governmental Accounting Standards Board (GASB) is the body authorized to establish accounting principles for all governmental and not-for-profit organizations. True False 4. A characteristic common to governmental and not-for-profit organizations is the absence of defined ownership interests that can be sold, transferred, or redeemed, or that convey entitlement to a share of a residual distribution of resources in the event of liquidation of the organization. True False 5. The Federal Accounting Standards Advisory Board (FASAB) recommends accounting principles and standards for the federal government and its agencies and state governments. True False 6. 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. True False 7. The FASB, GASB, and FASAB all base their standards on both internal and external financial reporting. True False 8. The two government-wide financial statements required by GASBS 34 are the statement of net assets and the statement of activities. True False 9. The government-wide financial statements are intended to report on fiscal accountability. True False 10. 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) required supplementary information (RSI, other than the MD&A). True False 11. The Governmental Accounting Standards Board has the responsibility for setting accounting and financial reporting standards for A. State and local government entities and governmentally-related units and agencies, such as utilities, authorities, hospitals, and colleges and universities. B. Governments; such as federal agencies, states, cities, counties, villages, and townships. C. Not-for-profit organizations. D. All of the above. 12. The Financial Accounting Standards Board has the responsibility for setting accounting and financial reporting standards for A. All federal and state organizations. B. All not-for-profit organizations that are nongovernmental and business entities. C. All not-for-profit organizations. D. Both B) and C) are correct. 13. The body that has been established to recommend accounting and financial reporting standards for the federal government is the A. Financial Accounting Standards Board (FASB). B. Governmental Accounting Standards Board (GASB). C. Cost Accounting Standards Board (CASB). D. Federal Accounting Standards Advisory Board (FASAB). 14. The GASB has identified which of the following as the "cornerstone" of all financial reporting in government? A. Understandability. B. Representational faithfulness. C. Accountability. D. Interperiod equity. 15. Which of the following distinguishes governments from nongovernmental not-for-profit organizations? 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. 16. Which of the following is not an objective of financial reporting by state and local governments? A. To assist financial report users in comparing actual financial results with the legally adopted budget. B. To assist users in assessing financial condition and results of operations. C. To assist users in assessing the adequacy of systems and controls. D. None of the above; that is, all of the above are objectives of state and local government financial reporting. 17. The minimum requirements for general purpose external financial reporting include: A. Management's discussion and analysis (MD&A). B. Government-wide and fund basic financial statements, including the notes thereto. C. Required supplementary information (other than the MD&A). D. All of the above. 18. The three sections recommended by GASB for inclusion in the Comprehensive Annual Financial Report (CAFR) are: A. Introductory, financial, and statistical. B. Letter of transmittal, MD&A, and financial. C. Introductory, MD&A, and financial. D. Letter of transmittal, financial, and supplementary. 19. 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? A. Management Discussion and Analysis (MD&A). B. Statistical information. C. Notes to the financial statements. D. Fund financial statements. 20. Combining financial statements of a governmental entity should be included in A. A comprehensive annual financial report (CAFR). B. The basic financial statements. C. The notes to the financial statements. D. Any of the above is acceptable under GAAP. 21. Which of the following would not be included in the introductory section of a comprehensive annual financial report? A. Title and contents page. B. Letter of transmittal. C. Management discussion and analysis. D. Reference to other sections of the CAFR so readers desiring detailed information can find it conveniently. 22. Which of the following is information that should be included in the financial section of a comprehensive annual financial report? A. The auditor's report. B. The basic financial statements. C. Notes to the financial statements. D. All of these should be included. 23. The section of the comprehensive annual financial report that presents tables and charts showing social and economic data in addition to financial trends and the fiscal capacity of the government is the: A. Introductory section. B. Statistical section. C. Management discussion and analysis section. D. Financial section. 24. On what should the government-wide financial statements report? A. Net assets and results of financial operations of the government as a whole. B. Operational accountability. C. The cost of government services. D. All of the above. 25. The fund financial statements for governmental funds should include a A. Balance sheet for governmental funds. B. Statement of revenues, expenses, and changes in fund net assets. C. Statement of cash flows. D. All of the above. 26. On what should the fund financial statements report? A. Net assets and results of financial operations of the government as a whole. B. Fiscal accountability. C. Cost of government services. D. All of the above. 27. Which of the following groups normally would not be considered a primary user of a state or local government's general-purpose external financial statements? A. Citizens. B. Managers. C. Investors and creditors. D. None of the above; that is, all these groups are considered primary users. 28. Which of the following reconciliations is required in the basic financial statements of a state or local government? A. Total fund balances on the balance sheet--governmental funds to total governmental activities net assets on the government-wide statement of net assets. B. Total net assets on the statement of net assets--proprietary funds to total business-type activities net assets on the government-wide statement of net assets. C. Total net assets on the statement of fiduciary net assets to total fiduciary activities net assets on the government-wide statement of net assets. D. All of the above. 29. Members of the Governmental Accounting Standards Board are appointed by the: A. Financial Accounting Standards Board. B. Governmental Accounting Standards Board. C. American Institute of Certified Public Accountants. D. Financial Accounting Foundation. 30. Which of the following organizations designated the FASAB as the authoritative standard setting body for the federal government and its agencies? A. Financial Accounting Foundation. B. American Institute of Certified Public Accountants. C. Government Finance Officers Association. D. Securities and Exchange Commission. 31. Which of the following is always subject to GASB jurisdiction? A. A hospital. B. A college or university. C. A public school district. D. All of the above. 32. Recognizing revenues when measurable and available for paying current obligations and expenditures when incurred describes which basis of accounting? A. Accrual. B. Modified accrual. C. Modified cash. D. Budgetary. 33. Enterprise funds are primarily distinguished from internal service funds by the: A. Type of customers they serve. B. Different basis of accounting they use. C. Different kinds of financial statements used to present their financial information. D. All of the above. 34. Explain the essential differences between general purpose and special purpose governments and give several examples of each. 35. Identify and explain the characteristics that distinguish governmental and not-for-profit entities from business entities. 36. Explain what distinguishes governmental not-for-profit organizations from nongovernmental, not-for-profit organizations. Why is such a distinction necessary? 37. 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? 38. 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? 39. Explain in your own words why accountability is the cornerstone of all financial reporting in government. 40. Why is it more difficult to determine the optimal quantity or quality of services rendered by a government than it is to determine the optimal quantity or quality of the goods or service of a business enterprise? 41. In your own words state the primary uses the GASB believes external users have for financial reports of state and local governments. Contrast and compare these with the uses the FASB believes external users have for the financial reports of not-for-profit organizations. 42. Describe the difference between a comprehensive annual financial report (CAFR) and the GASBS 34 financial reporting model for state and local governments. 43. Distinguish between combining financial statements of a governmental entity and basic financial statements. 44. What information is the Management Discussion and Analysis (MD&A) intended to provide? 45. Why is it necessary to reconcile total fund balances reported on the balance sheet--governmental funds to total net assets reported for governmental activities on the government-wide statement of net assets, and net changes in fund balances in fund balances--total governmental funds to the change in net assets reported for governmental activities on the government-wide statement of activities? ch1 Key 1. General purpose governments provide a wide range of services to their residents, such as public safety, road maintenance, and health and welfare. TRUE Content: Concept Level: Easy Wilson - Chapter 01 #1 2. Examples of special purpose governments include public schools, libraries, and water supply plants that receive tax revenue to finance the services they provide. TRUE Content: Concept Level: Medium Wilson - Chapter 01 #2 3. The Governmental Accounting Standards Board (GASB) is the body authorized to establish accounting principles for all governmental and not-for-profit organizations. FALSE The GASB does not have authority over the federal government or its agencies or nongovernmental, not-for-profit organizations. Content: Concept Level: Easy Wilson - Chapter 01 #3 4. A characteristic common to governmental and not-for-profit organizations is the absence of defined ownership interests that can be sold, transferred, or redeemed, or that convey entitlement to a share of a residual distribution of resources in the event of liquidation of the organization. TRUE This is one of the characteristics; others include receipt of significant amounts of resources from resource providers who do not expect to receive either repayment or economic benefits proportionate to the resources provided and operating purposes that are other than to provide goods or services at a profit and absence of defined ownership interests. Content: Concept Level: Easy Wilson - Chapter 01 #4 5. The Federal Accounting Standards Advisory Board (FASAB) recommends accounting principles and standards for the federal government and its agencies and state governments. FALSE The FASAB does not have responsibility for setting standards for state governments, the GASB does. Content: Concept Level: Easy Wilson - Chapter 01 #5 6. 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. TRUE Interperiod equity is a significant part of accountability of the government to its taxpayers, both current and future. Content: Concept Level: Easy Wilson - Chapter 01 #6 7. The FASB, GASB, and FASAB all base their standards on both internal and external financial reporting. FALSE While it is true that the FASAB sets standards for both internal and external users of financial information, the FASB and GASB base their standards only on external financial reporting. Content: Concept Level: Medium Wilson - Chapter 01 #7 8. The two government-wide financial statements required by GASBS 34 are the statement of net assets and the statement of activities. TRUE In addition to these two statements, there are two required basic financial statements for governmental funds, three for proprietary funds, and two for fiduciary funds, as illustrated and described in this chapter. Content: Concept Level: Medium Wilson - Chapter 01 #8 9. The government-wide financial statements are intended to report on fiscal accountability. FALSE The fund financial statements for governmental funds are focused on fiscal accountability, the remaining fund financial statements and the government-wide financial statements are intended to help users assess operational accountability. Content: Concept Level: Medium Wilson - Chapter 01 #9 10. 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) required supplementary information (RSI, other than the MD&A). TRUE Although the three items listed are the minimum requirements, most governments, as a matter of public record, prepare a comprehensive annual report (CAFR). The CAFR provides, in addition to the minimum requirements, other supplementary financial information about individual funds and nonmajor funds, as well as statistical information relating to the entity's economic condition. Content: Concept Level: Medium Wilson - Chapter 01 #10 11. The Governmental Accounting Standards Board has the responsibility for setting accounting and financial reporting standards for A. State and local government entities and governmentally-related units and agencies, such as utilities, authorities, hospitals, and colleges and universities. B. Governments; such as federal agencies, states, cities, counties, villages, and townships. C. Not-for-profit organizations. D. All of the above. Content: Concept Level: Medium Wilson - Chapter 01 #11 12. The Financial Accounting Standards Board has the responsibility for setting accounting and financial reporting standards for A. All federal and state organizations. B. All not-for-profit organizations that are nongovernmental and business entities. C. All not-for-profit organizations. D. Both B) and C) are correct. Content: Concept Level: Easy Wilson - Chapter 01 #12 13. The body that has been established to recommend accounting and financial reporting standards for the federal government is the A. Financial Accounting Standards Board (FASB). B. Governmental Accounting Standards Board (GASB). C. Cost Accounting Standards Board (CASB). D. Federal Accounting Standards Advisory Board (FASAB). Content: Concept Level: Easy Wilson - Chapter 01 #13 14. The GASB has identified which of the following as the "cornerstone" of all financial reporting in government? A. Understandability. B. Representational faithfulness. C. Accountability. D. Interperiod equity. Content: Concept Level: Easy Wilson - Chapter 01 #14 15. Which of the following distinguishes governments from nongovernmental not-for-profit organizations? 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. Content: Concept Level: Medium Wilson - Chapter 01 #15 16. Which of the following is not an objective of financial reporting by state and local governments? A. To assist financial report users in comparing actual financial results with the legally adopted budget. B. To assist users in assessing financial condition and results of operations. C. To assist users in assessing the adequacy of systems and controls. D. None of the above; that is, all of the above are objectives of state and local government financial reporting. Content: Concept Level: Medium Wilson - Chapter 01 #16 17. The minimum requirements for general purpose external financial reporting include: A. Management's discussion and analysis (MD&A). B. Government-wide and fund basic financial statements, including the notes thereto. C. Required supplementary information (other than the MD&A). D. All of the above. Content: Concept Level: Easy Wilson - Chapter 01 #17 18. The three sections recommended by GASB for inclusion in the Comprehensive Annual Financial Report (CAFR) are: A. Introductory, financial, and statistical. B. Letter of transmittal, MD&A, and financial. C. Introductory, MD&A, and financial. D. Letter of transmittal, financial, and supplementary. Content: Concept Level: Easy Wilson - Chapter 01 #18 19. 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? A. Management Discussion and Analysis (MD&A). B. Statistical information. C. Notes to the financial statements. D. Fund financial statements. Content: Concept Level: Easy Wilson - Chapter 01 #19 20. Combining financial statements of a governmental entity should be included in A. A comprehensive annual financial report (CAFR). B. The basic financial statements. C. The notes to the financial statements. D. Any of the above is acceptable under GAAP. Content: Concept Level: Medium Wilson - Chapter 01 #20 21. Which of the following would not be included in the introductory section of a comprehensive annual financial report? A. Title and contents page. B. Letter of transmittal. C. Management discussion and analysis. D. Reference to other sections of the CAFR so readers desiring detailed information can find it conveniently. Content: Concept Level: Easy Wilson - Chapter 01 #21 22. Which of the following is information that should be included in the financial section of a comprehensive annual financial report? A. The auditor's report. B. The basic financial statements. C. Notes to the financial statements. D. All of these should be included. Content: Concept Level: Easy Wilson - Chapter 01 #22 23. The section of the comprehensive annual financial report that presents tables and charts showing social and economic data in addition to financial trends and the fiscal capacity of the government is the: A. Introductory section. B. Statistical section. C. Management discussion and analysis section. D. Financial section. Content: Concept Level: Easy Wilson - Chapter 01 #23 24. On what should the government-wide financial statements report? A. Net assets and results of financial operations of the government as a whole. B. Operational accountability. C. The cost of government services. D. All of the above. Content: Concept Level: Medium Wilson - Chapter 01 #24 25. The fund financial statements for governmental funds should include a A. Balance sheet for governmental funds. B. Statement of revenues, expenses, and changes in fund net assets. C. Statement of cash flows. D. All of the above. Content: Concept Level: Medium Wilson - Chapter 01 #25 26. On what should the fund financial statements report? A. Net assets and results of financial operations of the government as a whole. B. Fiscal accountability. C. Cost of government services. D. All of the above. Content: Concept Level: Easy Wilson - Chapter 01 #26 27. Which of the following groups normally would not be considered a primary user of a state or local government's general-purpose external financial statements? A. Citizens. B. Managers. C. Investors and creditors. D. None of the above; that is, all these groups are considered primary users. Content: Concept Level: Easy Wilson - Chapter 01 #27 28. Which of the following reconciliations is required in the basic financial statements of a state or local government? A. Total fund balances on the balance sheet--governmental funds to total governmental activities net assets on the government-wide statement of net assets. B. Total net assets on the statement of net assets--proprietary funds to total business-type activities net assets on the government-wide statement of net assets. C. Total net assets on the statement of fiduciary net assets to total fiduciary activities net assets on the government-wide statement of net assets. D. All of the above. Content: Concept Level: Medium Wilson - Chapter 01 #28 29. Members of the Governmental Accounting Standards Board are appointed by the: A. Financial Accounting Standards Board. B. Governmental Accounting Standards Board. C. American Institute of Certified Public Accountants. D. Financial Accounting Foundation. Content: Concept Level: Easy Wilson - Chapter 01 #29 30. Which of the following organizations designated the FASAB as the authoritative standard setting body for the federal government and its agencies? A. Financial Accounting Foundation. B. American Institute of Certified Public Accountants. C. Government Finance Officers Association. D. Securities and Exchange Commission. Content: Concept Level: Medium Wilson - Chapter 01 #30 31. Which of the following is always subject to GASB jurisdiction? A. A hospital. B. A college or university. C. A public school district. D. All of the above. Content: Concept Level: Medium Wilson - Chapter 01 #31 32. Recognizing revenues when measurable and available for paying current obligations and expenditures when incurred describes which basis of accounting? A. Accrual. B. Modified accrual. C. Modified cash. D. Budgetary. Content: Concept Level: Medium Wilson - Chapter 01 #32 33. Enterprise funds are primarily distinguished from internal service funds by the: A. Type of customers they serve. B. Different basis of accounting they use. C. Different kinds of financial statements used to present their financial information. D. All of the above. Content: Concept Level: Medium Wilson - Chapter 01 #33 34. Explain the essential differences between general purpose and special purpose governments and give several examples of each. General purpose governments are those that provide many categories of services to residents. These include states, counties, municipalities, and townships. Special purpose governments provide only a single or, at most, a few functions. Examples of special purpose governments are special political subdivisions or districts that provide education, drainage and flood control, irrigation, soil and water conservation, fire protection, and water supply. Public colleges and universities are another example. Content: Concept Level: Easy Wilson - Chapter 01 #34 35. Identify and explain the characteristics that distinguish governmental and not-for-profit entities from business entities. Governmental 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. Governmental 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 Statement No. 4). Content: Concept Level: Medium Wilson - Chapter 01 #35 36. Explain what distinguishes governmental not-for-profit organizations from nongovernmental, not-for-profit organizations. Why is such a distinction necessary? Two Audit and Accounting Guides issued by the American Institute of Certified Public Accountants (AICPA)--those for health care and not-for-profit organizations--state that "Public corporations and bodies corporate and politic: are governmental organizations. Other kinds of organizations may be governmental if they have one or more of the following characteristics: a. popular election of officers or appointment (or approval) of a controlling majority of the members of the organization's governing body by officials of one or more state or local governments, b. the potential for unilateral dissolution by a government with the net assets reverting to a government, or c. the power to enact and enforce a tax levy. Organizations are also presumed to be governmental if they have the ability to issue directly (rather than through a state or municipal authority) debt that pays interest exempt from federal taxation. However, organizations possessing only that ability (to issue tax-exempt debt) and none of the other governmental characteristics may rebut the presumption that they are governmental if their determination is supported by compelling, relevant evidence. Distinguishing between governmental and nongovernmental character is necessary because governmental not-for-profit organizations must follow GASB standards whereas nongovernmental not-for-profit organizations must follow FASB standards. Content: Concept Level: Easy Wilson - Chapter 01 #36 37. 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? Agree. Both 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. Content: Concept Level: Easy Wilson - Chapter 01 #37 38. 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? Financial reports can be read intelligently only by persons who understand the real meaning of the terms used in the reports, and who understand the standards that guide the presentation of financial information. Content: Concept Level: Easy Wilson - Chapter 01 #38 39. Explain in your own words why accountability is the cornerstone of all financial reporting in government. Accountability is based on the belief that the citizenry has a "right to know" about public resources raised during a fiscal period and the purposes for which the resources were used. In a democratic society, public officials have an obligation to be accountable to the public. Content: Concept Level: Easy Wilson - Chapter 01 #39 40. Why is it more difficult to determine the optimal quantity or quality of services rendered by a government than it is to determine the optimal quantity or quality of the goods or service of a business enterprise? A consumer purchasing a commercial product in a competitive market can choose among "good," "better," and "best" qualities and pay accordingly for the quality needed. Governments may have a monopoly on the services they provide, so there is no competitive market. Consumers of government services may not be the same individuals or organizations that involuntarily provided the resources for the services, and almost certainly, resource providers do not receive services in proportion to the services they provide. Measurement of the quality of a governmental service is much more a subjective and individual matter than the measurement of the quality of the product of a business. Content: Concept Level: Medium Wilson - Chapter 01 #40 41. In your own words state the primary uses the GASB believes external users have for financial reports of state and local governments. Contrast and compare these with the uses the FASB believes external users have for the financial reports of not-for-profit organizations. External users of governmental financial reports, GASB believes, need to (1) compare actual financial results with the legally adopted budget; (2) assess financial condition and results of financial operations; (3) assist in determining compliance with finance-related laws, rules, and regulations; and (4) assist in evaluating efficiency and effectiveness. FASB believes that financial reports of not-for-profit organizations should provide information (1) useful in making resource allocation decisions, (2) useful in assessing services and ability to provide services, (3) useful in assessing management stewardship and performance, and (4) about economic resources, obligations, net resources, and changes in them. Content: Concept Level: Medium Wilson - Chapter 01 #41 42. Describe the difference between a comprehensive annual financial report (CAFR) and the GASBS 34 financial reporting model for state and local governments. By definition, the comprehensive annual financial report (CAFR) is more inclusive than the general purpose external financial information described in GASBS 34. The CAFR presents three types of information: 1) introductory material from the entity's management, such as transmittal letters, organizational charts, and awards; 2) financial statements (including the financial information required by GASBS 34); and 3) statistical information, such as demographic information about the entity and summaries of tax rates and property assessed values over time. By contrast, GASBS 34 requires 1) management discussion & analysis (MD&A), 2) government-wide financial statements, 3) fund financial statements, 4) notes to those statements, and 5) other required supplementary information (RSI). Content: Concept Level: Medium Wilson - Chapter 01 #42 43. Distinguish between combining financial statements of a governmental entity and basic financial statements. Combining financial statements are used in a comprehensive annual financial report to aggregate the financial data of all nonmajor funds of a category (governmental or proprietary). Combining financial statements are not part of the basic financial statements but are considered useful for users who have need for information about particular funds. Basic financial statements represent a higher level of aggregation in which the financial data for each fund type (governmental, proprietary, and fiduciary; major and nonmajor) are reported in separate columns. Effects of interfund transactions are not eliminated; therefore, the statements are not "consolidated" in the manner of corporate financial statements. Content: Concept Level: Medium Wilson - Chapter 01 #43 44. What information is the Management Discussion and Analysis (MD&A) intended to provide? The Management Discussion and Analysis is intended to provide an easy-to-read, concise narrative discussion and analysis of the basic financial statements, government's current financial position, and results of financial activities compared with those of prior years. Content: Concept Level: Easy Wilson - Chapter 01 #44 45. Why is it necessary to reconcile total fund balances reported on the balance sheet--governmental funds to total net assets reported for governmental activities on the government-wide statement of net assets, and net changes in fund balances in fund balances--total governmental funds to the change in net assets reported for governmental activities on the government-wide statement of activities? GASBS 34 requires that the effects of the same underlying financial transactions for governmental activities be reported in two different ways on the fund and government-wide financial statements. The fund financial statements report on fiscal accountability by focusing on the flow of current financial resources recognized on the modified accrual basis of accounting. The government-wide financial statements report on operational accountability by focusing on the flow of economic resources recognized on the accrual basis of accounting. As a result, the same underlying transactions result in very different information being reported on the two sets of financial statements, thus creating a need for reconciliations to help users understand how and why the reported amounts differ. Content: Concept Level: Hard Wilson - Chapter 01 #45 ch1 Summary Category # of Questions Content: Concept 45 Level: Easy 23 Level: Hard 1 Level: Medium 21 Wilson - Chapter 01 45 EMAIL ME @ to get this testbank The following pages are bank due to stuvia policies Once you purchase this TB Email me then I will send you the testbank directly to your email                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         EMAIL ME @ to get this testbank The following pages are bank due to stuvia policies Once you purchase this TB Email me then I will send you the testbank directly to your email