Governmental Accounting Midterm
Study Guide questions with actual
answers.
Which of the following bodies has been established to recommend accounting and financial reporting
standards for the federal government? ANS - Federal Accounting Standards Advisory Board (FASAB)
Governments and not-for-profit organizations can exist in many of the same forms. Which of the
following would most likely not be found in both a government and a not-for-profit form? ANS - a
professional association
Which of the following best identified the purpose of the government wide financial statements? ANS -
To provide an overview of the total government's financial information
Recognizing revenues when measurable and available for paying current obligation and expenditures
when incurred describes which basis of accounting? ANS - Modified accrual
Which of the following groups is considered a primary user of a state or local government's general-
purpose external financial statements ANS - Citizen
Which of the following is identified by the GASB as the "cornerstone" of all financial reporting in
government? ANS - accountability
You are trying to decide if an entity you are reviewing is a government or a non profit . Which of the
following would indicate it is a government rather than a non profit entity? ANS - a primary source of
revenue is taxes
which of the following statements is prepared by all not for profits ANS - statement of financial position
Governments and not for profits have several characteristics that distinguish them from business
organizations. Which of the following is one of those characteristics? ANS - All of the below:
Ownership interest
, Sources of revenue
Operating purpose
A comprehensive annual report (CAFR) prepared in conformity with the GASB recommendations should
include which of the following sections? ANS - Introductory, financial, and statistical
The Governmental Accounting Standards Board is assigned responsibility for setting accounting and
financial reporting standards for which of the following? ANS - State and local government entities and
governmentally-related units and agencies, such as utilities, authorities, hospitals, and colleges and
universities.
According to the GASB definition, which of the following represents an inflow of resources? ANS -
Revenues
Expenditures and expenses are classified as which of the following elements under GASB concepts
statements ANS - Outflows of resources
Under the modified accrual basis of accounting, revenues should be recognized when ANS - measurable
and available
Which of the following activities is considered a core government activity ANS - culture and recreation
Which of the following would be reported as a nonspendable fund balance? ANS - Inventory
Which of the following funds is a governmental fund - type? ANS - Permanent fund
Which of the following governmental funds must be reported as a major fund? ANS - The General Fund
A major governmental fund is one that has one or more elements (e.g., assets, liabilities, revenues, or
expenditures) that is at least: ANS - ten percent of the corresponding elements of the total
governmental funds and five percent of the corresponding elements of total governmental and
enterprise funds combined.
Study Guide questions with actual
answers.
Which of the following bodies has been established to recommend accounting and financial reporting
standards for the federal government? ANS - Federal Accounting Standards Advisory Board (FASAB)
Governments and not-for-profit organizations can exist in many of the same forms. Which of the
following would most likely not be found in both a government and a not-for-profit form? ANS - a
professional association
Which of the following best identified the purpose of the government wide financial statements? ANS -
To provide an overview of the total government's financial information
Recognizing revenues when measurable and available for paying current obligation and expenditures
when incurred describes which basis of accounting? ANS - Modified accrual
Which of the following groups is considered a primary user of a state or local government's general-
purpose external financial statements ANS - Citizen
Which of the following is identified by the GASB as the "cornerstone" of all financial reporting in
government? ANS - accountability
You are trying to decide if an entity you are reviewing is a government or a non profit . Which of the
following would indicate it is a government rather than a non profit entity? ANS - a primary source of
revenue is taxes
which of the following statements is prepared by all not for profits ANS - statement of financial position
Governments and not for profits have several characteristics that distinguish them from business
organizations. Which of the following is one of those characteristics? ANS - All of the below:
Ownership interest
, Sources of revenue
Operating purpose
A comprehensive annual report (CAFR) prepared in conformity with the GASB recommendations should
include which of the following sections? ANS - Introductory, financial, and statistical
The Governmental Accounting Standards Board is assigned responsibility for setting accounting and
financial reporting standards for which of the following? ANS - State and local government entities and
governmentally-related units and agencies, such as utilities, authorities, hospitals, and colleges and
universities.
According to the GASB definition, which of the following represents an inflow of resources? ANS -
Revenues
Expenditures and expenses are classified as which of the following elements under GASB concepts
statements ANS - Outflows of resources
Under the modified accrual basis of accounting, revenues should be recognized when ANS - measurable
and available
Which of the following activities is considered a core government activity ANS - culture and recreation
Which of the following would be reported as a nonspendable fund balance? ANS - Inventory
Which of the following funds is a governmental fund - type? ANS - Permanent fund
Which of the following governmental funds must be reported as a major fund? ANS - The General Fund
A major governmental fund is one that has one or more elements (e.g., assets, liabilities, revenues, or
expenditures) that is at least: ANS - ten percent of the corresponding elements of the total
governmental funds and five percent of the corresponding elements of total governmental and
enterprise funds combined.
