Governmental Accounting Exam 1-
Chapters 1-4 questions with actual
answers.
The governmental term for 'Profits' ANS -Residual Receipts
Anytime a government receives more than $__________ of federal funds, they must have an
independent audit and receive a CFDA number. ANS -$750,000
Each CFDA number has specific financial reporting standards and its own set of __________________
______________________. ANS -compliance requirements
What are the five environmental differences between governments and for-profit enterprises? ANS -
Organizational Purpose, Sources of Revenues, Potential for Longevity, Relationship with Stakeholders
and Role of the Budget
What is the Organizational Purpose of a government? ANS -Enhance or maintain the well being of
citizens by providing public services in accordance with public policy goals.
What is the Source of Revenue for a government? ANS -Taxation is the primary source.
What is the Potential for Longevity for a government? ANS -Governments are not typically concerned
with longevity. They emphasize the allocation of resources to government programs, determine service
costs and the long-term view of operations.
What is the Relationship with Stakeholders for a government? ANS -Governments have an obligation to
demonstrate accountability to tax paying citizens.
What is the Role of the Budget for a government? ANS -Government budgets are legally constraining
and become law once adopted.
, Who sets the standards for governmental and not-for-profit organizations accounting? ANS -GASB-
Governmental Accounting Standards Board
What is the measurement focus? ANS -refers to WHAT items are being reported in the financial
statements.
What is the basis of accounting? ANS -determines WHEN transactions and events are recognized in the
accounting records
A Fund is (1)_______________, (2)_______________ and (3)____________________. ANS -(1) Self
Balancing, (2) separately reports resources and activities and (3) is segregated because of the existence
of restrictions or limitations on the use of certain resources.
Two conditions that must be met for a Fund to exist: ANS -(1) There must be a fiscal entity- assets set
aside for a specific purpose and (2) there must be a double entry accounting entity created to account
for the fiscal entity.
What are the 5 types of Governmental Funds? ANS -General, Capital Projects, Debt Services, Special
Revenue and Permanent
What does the General Fund account for? ANS -Basic Services provided by the government
What does the Capital Projects Fund account for and report? ANS -Long-Term Capital Projects that may
be restricted, committed, or assigned to expenditure for capital outlays
What does the Debt Services Fund account for and report? ANS -Restricted, committed or assigned to
expenditure for principal and interest
What does the Special Revenue Fund account for and report? ANS -Proceeds of SPECIFIC revenue
sources that are restricted or committed to expenditure for a specific purpose
What does the Permanent Fund account for and report? ANS -Earnings from principal that may be used
for government programs. Typically for TRUSTS
Chapters 1-4 questions with actual
answers.
The governmental term for 'Profits' ANS -Residual Receipts
Anytime a government receives more than $__________ of federal funds, they must have an
independent audit and receive a CFDA number. ANS -$750,000
Each CFDA number has specific financial reporting standards and its own set of __________________
______________________. ANS -compliance requirements
What are the five environmental differences between governments and for-profit enterprises? ANS -
Organizational Purpose, Sources of Revenues, Potential for Longevity, Relationship with Stakeholders
and Role of the Budget
What is the Organizational Purpose of a government? ANS -Enhance or maintain the well being of
citizens by providing public services in accordance with public policy goals.
What is the Source of Revenue for a government? ANS -Taxation is the primary source.
What is the Potential for Longevity for a government? ANS -Governments are not typically concerned
with longevity. They emphasize the allocation of resources to government programs, determine service
costs and the long-term view of operations.
What is the Relationship with Stakeholders for a government? ANS -Governments have an obligation to
demonstrate accountability to tax paying citizens.
What is the Role of the Budget for a government? ANS -Government budgets are legally constraining
and become law once adopted.
, Who sets the standards for governmental and not-for-profit organizations accounting? ANS -GASB-
Governmental Accounting Standards Board
What is the measurement focus? ANS -refers to WHAT items are being reported in the financial
statements.
What is the basis of accounting? ANS -determines WHEN transactions and events are recognized in the
accounting records
A Fund is (1)_______________, (2)_______________ and (3)____________________. ANS -(1) Self
Balancing, (2) separately reports resources and activities and (3) is segregated because of the existence
of restrictions or limitations on the use of certain resources.
Two conditions that must be met for a Fund to exist: ANS -(1) There must be a fiscal entity- assets set
aside for a specific purpose and (2) there must be a double entry accounting entity created to account
for the fiscal entity.
What are the 5 types of Governmental Funds? ANS -General, Capital Projects, Debt Services, Special
Revenue and Permanent
What does the General Fund account for? ANS -Basic Services provided by the government
What does the Capital Projects Fund account for and report? ANS -Long-Term Capital Projects that may
be restricted, committed, or assigned to expenditure for capital outlays
What does the Debt Services Fund account for and report? ANS -Restricted, committed or assigned to
expenditure for principal and interest
What does the Special Revenue Fund account for and report? ANS -Proceeds of SPECIFIC revenue
sources that are restricted or committed to expenditure for a specific purpose
What does the Permanent Fund account for and report? ANS -Earnings from principal that may be used
for government programs. Typically for TRUSTS
