Essentials of Accounting for Governmental & Nonprofit Organizations | Test Bank | 15th Edition | Paul A. Copley | 9781265618902

TEST BANK

ESSENTIALS OF ACCOUNTING FOR GOVERNMENTAL &
NONPROFIT ORGANIZATIONS

15TH EDITION

CHAPTER 1: INTRODUCTION TO ACCOUNTING AND FINANCIAL
REPORTING FOR GOVERNMENTAL AND NOT-FOR-PROFIT
ORGANIZATIONS

1) The Governmental Accounting Standards Board sets financial reporting
standards for all units of government: federal, state, and local.
⊚ true
⊚ false

ANS: false
2) Fund accounting exists primarily to provide assurance that resources are
used according to legal or donor restrictions.
⊚ true
⊚ false

ANS: true
3) The Financial Accounting Standards Board sets financial reporting
standards for profit-seeking businesses and nongovernmental, not-for-profit
organizations.
⊚ true
⊚ false

ANS: true
4) FASAB, GASB, and FASB standards are set forth primarily in documents
called statements.
⊚ true
⊚ false

ANS: true

,5) FASAB, GASB, and FASB reporting standards are set forth primarily in
documents called concept statements.
⊚ true
⊚ false

ANS: false
6) The FASAB was established to recommend accounting and financial
reporting standards for the federal government.
⊚ true
⊚ false

ANS: true
7) The GASB does not require supplementary information to be reported with
its financial statements even if it is essential to establish appropriate
context for the financial statements and notes.
⊚ true
⊚ false

ANS: false
8) The Financial Accounting Standards Board sets financial reporting
standards for private not-for-profits and investor-owned businesses.
⊚ true
⊚ false

ANS: true
9) An organization is presumed to be governmental if it has the ability to issue
directly debt that is exempt from federal taxes.
⊚ true
⊚ false

ANS: true
10) The Financial Accounting Standards Board and the Governmental
Accounting Standards Board are parallel bodies under the oversight of the
Financial Accounting Foundation.
⊚ true
⊚ false

ANS: true

,11) The Federal Accounting Standards Advisory Board requires less extensive
reports than does the FASB or GASB.
⊚ true
⊚ false

ANS: false
12) The FASAB requires more financial statements than are typically required of
state and local governments.
⊚ true
⊚ false

ANS: true
13) Governments must have as many funds as necessary to fulfill legal
requirements and sound financial administration but must have at a
minimum a General Fund.
⊚ true
⊚ false

ANS: true
14) A Management's Discussion and Analysis is required for state and local
governmental units, and the federal government.
⊚ true
⊚ false

ANS: true
15) Although certain supplementary information may not be required, if
presented, it must follow GASB guidance regarding its format and content.
⊚ true
⊚ false

ANS: true
16) The format and content of supplementary information which is not required
by GASB is up to the discretion of the reporting entity.
⊚ true
⊚ false

ANS: false

, 17) GASB and FASB Concept Statements establish accounting standards that
must be complied with to receive an unqualified audit opinion.
⊚ true
⊚ false

ANS: false
18) FASAB, GASB, and FASB standards are set forth primarily in documents
called interpretations.
⊚ true
⊚ false

ANS: false
19) Fund-basis statements are presented for three categories of government
activities: governmental, proprietary, and fiduciary.
⊚ true
⊚ false

ANS: true
20) State and local governments may use as many as twelve different fund
types.
⊚ true
⊚ false

ANS: false

21) The economic resource measurement focus and accrual basis is an
important feature of government-wide financial statements.
⊚ true
⊚ false

ANS: true
22) Businesslike activity fund-basis statements must be changed to the accrual
basis from the modified accrual basis when preparing government-wide
financial statements.
⊚ true
⊚ false

ANS: false