ACCT 4421 Ch 1 & 2 UPDATED ACTUAL
Exam Questions and CORRECT Answers
Governments that provide a wide range of services to their residents are ______ purpose
governments. - CORRECT ANSWER - general
Characteristics that distinguish governmental and not-for-profit business entities from business
organizations include which of the following? - CORRECT ANSWER - - receipts of
significant amounts of resources from resource providers who do not expect repayment or other
economic benefits
- absence of defined ownership interests that can be sold, transferred, or redeemed
Standards for state and local governmental organizations and governmental not-for-profit
organizations are set by which of the following? - CORRECT ANSWER - GASB
The cornerstone of all financial reporting in government is ______. - CORRECT
ANSWER - accountability
Ensuring the government "lives within its means" is the concept GASB refers to as ______. -
CORRECT ANSWER - interperiod equity
States, counties, municipalities, and townships are examples of ______ purpose governments. -
CORRECT ANSWER - general
Financial reporting for not-for-profit organizations should provide information useful in making
resource allocation decisions and assessing management stewardship and _____. - CORRECT
ANSWER - performance
True or false: According to FASB, governmental and business organizations share the purpose of
providing goods and services at a profit or profit equivalent. - CORRECT ANSWER -
False
,[Reason: Only business organizations have this purpose.]
Authority to establish accounting and reporting standards for not-for-profit organizations is split
between which of the following? - CORRECT ANSWER - FASB and GASB
The ______ is required supplementary information designed to be able to communicate in an
easy-to-read format the purpose of the basic financial statements. - CORRECT ANSWER -
MD&A
(management's discussion and analysis)
______ requires governments to justify the raising and use of public resources. - CORRECT
ANSWER - Accountability
Under GASB, the term ______ is substantially the same as the FASB term net assets. -
CORRECT ANSWER - net position
The concept of ______ helps users to assess whether current-year revenues are sufficient to pay
for services provided that year. - CORRECT ANSWER - interperiod equity
GASB concluded that reporting on operational accountability is best achieved by using
essentially the same basis of accounting and measurement focus used by ______ organizations. -
CORRECT ANSWER - business
Financial reporting for the federal government is intended to assist report users in which of the
following? - CORRECT ANSWER - - budgetary integrity
- operating performance
- stewardship
- adequacy of systems and controls
, Detailed financial information about the government is found in which of the following? -
CORRECT ANSWER - fund financial statements
True or false: Under the government financial reporting model specified by GASB, the MD&A is
required supplementary information (RSI). - CORRECT ANSWER - True
Which of the following are true of the modified accrual basis of accounting? - CORRECT
ANSWER - - Revenues are recognized in the period they are measurable and available for
spending.
- Expenditures are recognized when they create an obligation to be paid from current financial
resources.
Government-wide financial statements are intended to provide an aggregated overview of which
of the following? - CORRECT ANSWER - a government's net position and changes in net
position
Proprietary and fiduciary funds follow account and reporting principles similar to those of
______ organizations. - CORRECT ANSWER - business
Government-wide financial statements assist in assessing ______, which is whether the
government has used its resources efficiently and effectively in meeting objectives. - CORRECT
ANSWER - operational accountability
Which of the following is true of a CAFR?
A. It is required for both state and local governments.
B. It is not required.
C. It is only required for state governments. - CORRECT ANSWER - B. It is not required.
Match the type of entity with the financial reporting objectives. - CORRECT ANSWER -
State and local govts -->
Exam Questions and CORRECT Answers
Governments that provide a wide range of services to their residents are ______ purpose
governments. - CORRECT ANSWER - general
Characteristics that distinguish governmental and not-for-profit business entities from business
organizations include which of the following? - CORRECT ANSWER - - receipts of
significant amounts of resources from resource providers who do not expect repayment or other
economic benefits
- absence of defined ownership interests that can be sold, transferred, or redeemed
Standards for state and local governmental organizations and governmental not-for-profit
organizations are set by which of the following? - CORRECT ANSWER - GASB
The cornerstone of all financial reporting in government is ______. - CORRECT
ANSWER - accountability
Ensuring the government "lives within its means" is the concept GASB refers to as ______. -
CORRECT ANSWER - interperiod equity
States, counties, municipalities, and townships are examples of ______ purpose governments. -
CORRECT ANSWER - general
Financial reporting for not-for-profit organizations should provide information useful in making
resource allocation decisions and assessing management stewardship and _____. - CORRECT
ANSWER - performance
True or false: According to FASB, governmental and business organizations share the purpose of
providing goods and services at a profit or profit equivalent. - CORRECT ANSWER -
False
,[Reason: Only business organizations have this purpose.]
Authority to establish accounting and reporting standards for not-for-profit organizations is split
between which of the following? - CORRECT ANSWER - FASB and GASB
The ______ is required supplementary information designed to be able to communicate in an
easy-to-read format the purpose of the basic financial statements. - CORRECT ANSWER -
MD&A
(management's discussion and analysis)
______ requires governments to justify the raising and use of public resources. - CORRECT
ANSWER - Accountability
Under GASB, the term ______ is substantially the same as the FASB term net assets. -
CORRECT ANSWER - net position
The concept of ______ helps users to assess whether current-year revenues are sufficient to pay
for services provided that year. - CORRECT ANSWER - interperiod equity
GASB concluded that reporting on operational accountability is best achieved by using
essentially the same basis of accounting and measurement focus used by ______ organizations. -
CORRECT ANSWER - business
Financial reporting for the federal government is intended to assist report users in which of the
following? - CORRECT ANSWER - - budgetary integrity
- operating performance
- stewardship
- adequacy of systems and controls
, Detailed financial information about the government is found in which of the following? -
CORRECT ANSWER - fund financial statements
True or false: Under the government financial reporting model specified by GASB, the MD&A is
required supplementary information (RSI). - CORRECT ANSWER - True
Which of the following are true of the modified accrual basis of accounting? - CORRECT
ANSWER - - Revenues are recognized in the period they are measurable and available for
spending.
- Expenditures are recognized when they create an obligation to be paid from current financial
resources.
Government-wide financial statements are intended to provide an aggregated overview of which
of the following? - CORRECT ANSWER - a government's net position and changes in net
position
Proprietary and fiduciary funds follow account and reporting principles similar to those of
______ organizations. - CORRECT ANSWER - business
Government-wide financial statements assist in assessing ______, which is whether the
government has used its resources efficiently and effectively in meeting objectives. - CORRECT
ANSWER - operational accountability
Which of the following is true of a CAFR?
A. It is required for both state and local governments.
B. It is not required.
C. It is only required for state governments. - CORRECT ANSWER - B. It is not required.
Match the type of entity with the financial reporting objectives. - CORRECT ANSWER -
State and local govts -->
