Government & Non-profit Accounting Exam 1 (chapters 1-4) questions with answers

Government & Non-profit Accounting Exam 1 |\ |\ |\ |\ |\




(chapters 1-4) questions with answers
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Government & NFP orgs are vast in - CORRECT ANSWERS |\ |\ |\ |\ |\ |\ |\ |\ |\ |\


✔✔number and range of services provided |\ |\ |\ |\ |\




Governments exist at the - CORRECT ANSWERS ✔✔Federal, |\ |\ |\ |\ |\ |\ |\ |\


State, and Local Levels
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Two types of government - CORRECT ANSWERS ✔✔General
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Purpose and Special Purpose
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General Purpose Government - CORRECT ANSWERS
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✔✔governments that provide a wide range of services to to their |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\


residents (such as PD and FD, sanitation, construction, and
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maintenance of streets, and culture and recreation |\ |\ |\ |\ |\ |\




Special Purpose Government - CORRECT ANSWERS
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✔✔Governments that only provide a single function (or a limited |\ |\ |\ |\ |\ |\ |\ |\ |\ |\


number) (such as, public schools, colleges & universities, flood
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control, irrigation, water conservation)
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**have the power to levy and collect taxes to raise revenues from
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other sources provided by the state laws to finance the services
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they provide.
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,Distinguishing characteristic of government and NFPs - CORRECT |\ |\ |\ |\ |\ |\ |\ |\


ANSWERS ✔✔1. Different purpose in society than business
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organizations (exist to meet needs) |\ |\ |\ |\




2. Lack of profit motive
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3. Financed by resource providers (e.g. tax payers/donors) who
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do not expect benefits proportional to the resources they provide
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4. Absence of defined ownership interest
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How do government bodies differ from NFPs - CORRECT
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ANSWERS ✔✔Government entities in the US differ from both NFPs
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and business entities by stressing governments exist in an
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environment in which the power ultimately rests in the hands of |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\


the people. |\




Authoritative bodies - CORRECT ANSWERS ✔✔1. Financial |\ |\ |\ |\ |\ |\ |\


Accounting Foundation --> FASB --> Business (for profit) orgs &
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non-governmental, NFP orgs. |\ |\




2. Financial Accounting Foundation --> GASB --> State & local
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government orgs. & Governmental NFP orgs. |\ |\ |\ |\ |\




3. Comptroller General, Director of Office & Mgmt, Secretary of
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Treasury --> Federal Accounting Standards Advisory Board
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(FASAB)--> Federal government & its agencies & departments.
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Objectives of Financial Reporting for Government and NFPs -
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CORRECT ANSWERS ✔✔1. Accountability - Cornerstone to
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financial reporting |\




2. Stewardship - citizens right-to-know how public resources are
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raised & used to provide services
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, 3. Other - 1. Conformity w/ GAAP. 2. Determine/demonstrate
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compliance w/ finance-related legal & contractual provisions
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(useful reporting for making economic, social, & political
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decisions & assessing accountability.
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Government-Wide Financial Statements - CORRECT ANSWERS |\ |\ |\ |\ |\ |\


✔✔1. Statement of Net Position (assets, similar to Balance
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Sheet).
2. Statement of activities (similar to Income Statement)
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Three different types of funds - CORRECT ANSWERS ✔✔1.
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Government Fund |\




2. Proprietary Fund
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3. Fiduciary Fund
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Government Fund - 5 types - CORRECT ANSWERS ✔✔1. General
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2. Special Revenue
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3. Debt Services
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4. Capital Project
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5. Permanent
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* Statement of New Position (B/S), reconciliation
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* Statement of revenue, expenditure, change in fund balance
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Proprietary Fund - 2 types - CORRECT ANSWERS ✔✔1. Internal
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Services
2. Enterprise
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