Accounting for Governmental and Non-Profit Entities Wilson 15th Edition Test Bank

Accounting for Governmental and Non-Profit Entities Wilson 15th Edition Test BankStudent: ___________________________________________________________________________ 1. General purpose governments generally provide a wider range of services to their residents than do special purpose governments. True False 2. Examples of special purpose governments include cities, towns, and public schools that receive tax revenue to finance the services they provide. True False 3. The Governmental Accounting Standards Board (GASB) is the body authorized to establish accounting principles for all state and local governments, both general purpose and special purpose. True False 4. A characteristic common to governmental and not-for-profit organizations is operating purposes that are other than to provide goods or services at a profit or profit equivalent. True False 5. The needs of users of governmental financial reports are the same as those of users of business financial reports. True False 6. The Federal Accounting Standards Advisory Board (FASAB) recommends accounting principles and standards for the federal government and its agencies and departments. True False 7. The FASB, GASB, and FASAB all focus their standards on both internal and external financial reporting. True False 8. Interperiod equity refers to the concept that current-year revenues are sufficient to pay for services provided that year, so that future taxpayers will not be required to assume the burden for services previously provided. True False 9. The minimum requirements for general purpose external financial reporting are (1) management’s discussion and analysis (MD&A), (2) the basic financial statements, including the notes to the financial statements, and (3) combining and individual fund financial statements. True False 10. The statement of net assets and the statement of activities are the two government-wide financial statements required by GASBS 34. True False 11. The governmental fund financial statements are intended to report on fiscal accountability. True False 12. The basis of accounting under which revenues are recognized when measurable and available for spending and expenses when resources are consumed is the modified accrual basis of accounting. True False 13. The Governmental Accounting Standards Board is assigned responsibility for setting accounting and financial reporting standards for A. Governments; such as federal agencies, states, cities, counties, villages, and townships. B. State and local government entities and governmentally-related units and agencies, such as utilities, authorities, hospitals, and colleges and universities. C. Not-for-profit organizations. D. State and local government and all not-for-profit organizations. 14. The body that has been established to recommend accounting and financial reporting standards for the federal government is the A. Financial Accounting Standards Board (FASB). B. Governmental Accounting Standards Board (GASB). C. Cost Accounting Standards Board (CASB). D. Federal Accounting Standards Advisory Board (FASAB). 15. The Financial Accounting Standards Board has the responsibility for setting accounting and financial reporting standards for A. All not-for-profit organizations that are nongovernmental and business entities. B. All special purpose governments. C. All not-for-profit organizations. D. All federal government agencies. 16. Which of the following distinguishes governments from nongovernmental not-for-profit organizations? A. Absence of profit motive. B. The power to enact and enforce a tax levy. C. Resource providers do not expect benefits proportional to the resources provided. D. Absence of a defined ownership interest that can be sold, transferred, or redeemed. 17. Which of the following is identified by the GASB as the “cornerstone” of all financial reporting in government? A. Understandability. B. Representational faithfulness. C. Accountability. D. Interperiod equity. 18. Which of the following organizations issue standards that are intended for both internal and external users of financial information? A. Federal Accounting Standards Advisory Board. B. Governmental Accounting Standards Board. C. Financial Accounting Standards Board. D. American Institute of CPAs. 19. All of the following characteristics may indicate that an organization is governmental in nature except: A. The organization is a public corporation or body corporate and politic. B. Popular election of officers or appointment of a controlling majority of the organization’s governing board by officials of a state or local government. C. The organization is legally separate and its governing body has discretion to manage the organization’s affairs without approval by a government. D. The power to enact and enforce a tax levy. 20. Which of the following is not an objective of financial reporting by state and local governments? A. To assist users in assessing the adequacy of systems and controls. B. To assist users in assessing financial condition and results of operations. C. To assist financial report users in comparing actual financial results with the legally adopted budget. D. To assist in determining compliance with finance-related laws, rules, and regulations. 21. Which of the following groups is considered a primary user of a state or local government’s general-purpose external financial statements? A. Citizens. B. Managers and administrators. C. Employees. D. Special interest groups. 22. One of the minimum requirements for general purpose external financial reporting is (are): A. Management’s discussion and analysis (MD&A). B. Consolidated financial statements. C. Other supplementary information, such as combining and individual fund statements. D. Statistical information. 23. A comprehensive annual financial report (CAFR) prepared in conformity with GASB recommendations should include which of the following sections? A. Letter of transmittal, MD&A, and financial. B. Introductory, financial, and statistical. C. Introductory, MD&A, and financial. D. Letter of transmittal, financial, and supplementary. 24. Which of the following would be included in a properly prepared comprehensive annual financial report (CAFR), but not in the minimum requirements for general purpose financial reporting specified by GASBS 34? A. Management discussion and analysis (MD&A). B. Government-wide financial statements. C. Notes to the financial statements. D. Combining and individual fund financial statements. 25. A statistical section should be included in A. A comprehensive annual financial report (CAFR). B. The basic financial statements.