ACCT 4421- CH 1 UPDATED ACTUAL
Exam Questions and CORRECT Answers
The traditional business model of accounting is inadequate for governments and not-for-profit
organizations primarily because businesses differ from governments and not-for-profit
organizations in that - CORRECT ANSWER - They have different missions
If businesses are "governed by the marketplace" governments are governed by - CORRECT
ANSWER - Budgets
The primary objective of a not-for-profit organization or a government is to - CORRECT
ANSWER - Provide services to constituents
In governments in contrast to businesses - CORRECT ANSWER - There may not be a
direct relationship between revenues raised and the demand for the entity's services
The organization responsible for setting accounting standards for state and local governments is
the - CORRECT ANSWER - GASB (Government Accounting Standards Board)
The number of governmental units in the US is approximately - CORRECT ANSWER -
89,500
Governments differ from businesses in that they - CORRECT ANSWER - Do not issue
common stock
Interperiod equity refers to a condition whereby - CORRECT ANSWER - Current-year
revenues are equal to or exceed budgeted expenses
Which of the following is not one of GASB's financial reporting objectives - CORRECT
ANSWER - Ensuring that budgeted revenues are equal to or exceed budgeted expenses
Exam Questions and CORRECT Answers
The traditional business model of accounting is inadequate for governments and not-for-profit
organizations primarily because businesses differ from governments and not-for-profit
organizations in that - CORRECT ANSWER - They have different missions
If businesses are "governed by the marketplace" governments are governed by - CORRECT
ANSWER - Budgets
The primary objective of a not-for-profit organization or a government is to - CORRECT
ANSWER - Provide services to constituents
In governments in contrast to businesses - CORRECT ANSWER - There may not be a
direct relationship between revenues raised and the demand for the entity's services
The organization responsible for setting accounting standards for state and local governments is
the - CORRECT ANSWER - GASB (Government Accounting Standards Board)
The number of governmental units in the US is approximately - CORRECT ANSWER -
89,500
Governments differ from businesses in that they - CORRECT ANSWER - Do not issue
common stock
Interperiod equity refers to a condition whereby - CORRECT ANSWER - Current-year
revenues are equal to or exceed budgeted expenses
Which of the following is not one of GASB's financial reporting objectives - CORRECT
ANSWER - Ensuring that budgeted revenues are equal to or exceed budgeted expenses
