D250 - Module 1 – Quiz With Verified
Q&A…A+GRADED…
Which characteristics distinguishes a government or nonprofit entity from a
business?
A. There is always a direct link between revenues generated &
expenditures/expenses incurred
B. Capital assets are used to produce revenues & save costs
C. Revenues are always indicative of demand for goods & services
D. The mission of the entity may include goals other than maximizing profit -
CORRECT ANSWER --D.
What is common to both governments & nonprofit entities but distinguishes these
entities from for-profit entities?
A. The budget is a legal, financial documents
B. Revenues are usually indicative of demand for goods or services
C. There is direct matching of revenues & expenses
D. There are no defined ownership interests - CORRECT ANSWER --D
What is a purpose of external financial reporting by governments?
A. To asses financial condition
B. To provide information to stockholders
C. To assess the ability of elected officials to effectively mange people
D. To track cash flow - CORRECT ANSWER --A
Why should users of government financial statements be interested in information
about compliance with laws & regulations?
A. To determine whether the government has complied with bond covenants
B. To determine whether the government has complied with taxing limitations
C. To determine whether the government has complied with donor restrictions on the
use of funds
D. To determine all of the above - CORRECT ANSWER --D
For which entity is the Governmental Accounting Standards Board the primary
standard-setting body?
A. All governments
B. All state & local governments
C. All governments & all nonprofit entities
D. All state & local governments & all nonprofit entities - CORRECT ANSWER --B
What is one objective of financial reporting by nongovernmental nonprofit entities as
established by FASB?
A. To asses the types of services provided & the need for those services
B. To asses the services provided & the entity's ability to earn a profit
C. To make rational decisions about the allocation of resources to those
organizations
D. To determine how managers have managed personnel - CORRECT ANSWER --
C
Q&A…A+GRADED…
Which characteristics distinguishes a government or nonprofit entity from a
business?
A. There is always a direct link between revenues generated &
expenditures/expenses incurred
B. Capital assets are used to produce revenues & save costs
C. Revenues are always indicative of demand for goods & services
D. The mission of the entity may include goals other than maximizing profit -
CORRECT ANSWER --D.
What is common to both governments & nonprofit entities but distinguishes these
entities from for-profit entities?
A. The budget is a legal, financial documents
B. Revenues are usually indicative of demand for goods or services
C. There is direct matching of revenues & expenses
D. There are no defined ownership interests - CORRECT ANSWER --D
What is a purpose of external financial reporting by governments?
A. To asses financial condition
B. To provide information to stockholders
C. To assess the ability of elected officials to effectively mange people
D. To track cash flow - CORRECT ANSWER --A
Why should users of government financial statements be interested in information
about compliance with laws & regulations?
A. To determine whether the government has complied with bond covenants
B. To determine whether the government has complied with taxing limitations
C. To determine whether the government has complied with donor restrictions on the
use of funds
D. To determine all of the above - CORRECT ANSWER --D
For which entity is the Governmental Accounting Standards Board the primary
standard-setting body?
A. All governments
B. All state & local governments
C. All governments & all nonprofit entities
D. All state & local governments & all nonprofit entities - CORRECT ANSWER --B
What is one objective of financial reporting by nongovernmental nonprofit entities as
established by FASB?
A. To asses the types of services provided & the need for those services
B. To asses the services provided & the entity's ability to earn a profit
C. To make rational decisions about the allocation of resources to those
organizations
D. To determine how managers have managed personnel - CORRECT ANSWER --
C
