Governmental Accounting Exam 1
questions reviewed & answered
correctly.
Who has the authority to establish accounting and financial reporting standards for state and local
governments? ANS -The GASB (Governmental Accounting Standards Board)
Who has the authority to establish accounting and financial reporting standards for not-for-profit
organizations? ANS -If it's a nongovernmental not-for-profit --> FASB (Financial Accounting Standards
Board)
If it's a Government not-for-profit --> GASB (Governmental Accounting Standards Board)
Who has the authority to establish accounting and financial reporting standards for the Federal
government and its agencies and departments? ANS -The Federal Accounting Standards Advisory Board
(FASAB)
What is the cornerstone of all financial reporting in government? ANS -Accountability
Interperiod Equity ANS -Ensuring that the government "lives within its means"
An important part of government accountability
The current period's resources are sufficient to support the current period's services
What is different about the reporting objectives for not-for-profit organizations from those of
governments? ANS -The reporting objectives for NFPs emphasize decision usefulness over financial
accountability needs
, What are the two categories of basic financial statements for state and local governments? ANS -1.
Government-wide financial statements
2. Fund financial statements
Government-wide financial statements ANS -Intended to provide an aggregated overview of a
government's net position and changes in net position
Report on the government as a whole and assist in assessing operational accountability
Operational Accountability ANS -Whether the government has used its resources efficiently and
effectively in meeting operating objectives
What basis of accounting is used for the government-wide financial statements of a state or local
government? ANS -The accrual basis and flow of economic resources measurement focus
Fund financial statements ANS -Provide more detailed financial information about the government
What basis of accounting is used for the financial reporting of governmental funds? ANS -Modified-
accrual basis
What is different about the modified-accrual basis of accounting from the accrual basis? ANS -Under
modified accrual, revenues are recognized in the period they are measurable and available for spending,
and expenditures are recognized when they create an obligation to be paid from current financial
resources
Which entity's financial statements provide operational accountability? ANS -Government-wide
financial statements (governmental and business-type activities)
Proprietary funds financial statements
Fiduciary funds financial statements
questions reviewed & answered
correctly.
Who has the authority to establish accounting and financial reporting standards for state and local
governments? ANS -The GASB (Governmental Accounting Standards Board)
Who has the authority to establish accounting and financial reporting standards for not-for-profit
organizations? ANS -If it's a nongovernmental not-for-profit --> FASB (Financial Accounting Standards
Board)
If it's a Government not-for-profit --> GASB (Governmental Accounting Standards Board)
Who has the authority to establish accounting and financial reporting standards for the Federal
government and its agencies and departments? ANS -The Federal Accounting Standards Advisory Board
(FASAB)
What is the cornerstone of all financial reporting in government? ANS -Accountability
Interperiod Equity ANS -Ensuring that the government "lives within its means"
An important part of government accountability
The current period's resources are sufficient to support the current period's services
What is different about the reporting objectives for not-for-profit organizations from those of
governments? ANS -The reporting objectives for NFPs emphasize decision usefulness over financial
accountability needs
, What are the two categories of basic financial statements for state and local governments? ANS -1.
Government-wide financial statements
2. Fund financial statements
Government-wide financial statements ANS -Intended to provide an aggregated overview of a
government's net position and changes in net position
Report on the government as a whole and assist in assessing operational accountability
Operational Accountability ANS -Whether the government has used its resources efficiently and
effectively in meeting operating objectives
What basis of accounting is used for the government-wide financial statements of a state or local
government? ANS -The accrual basis and flow of economic resources measurement focus
Fund financial statements ANS -Provide more detailed financial information about the government
What basis of accounting is used for the financial reporting of governmental funds? ANS -Modified-
accrual basis
What is different about the modified-accrual basis of accounting from the accrual basis? ANS -Under
modified accrual, revenues are recognized in the period they are measurable and available for spending,
and expenditures are recognized when they create an obligation to be paid from current financial
resources
Which entity's financial statements provide operational accountability? ANS -Government-wide
financial statements (governmental and business-type activities)
Proprietary funds financial statements
Fiduciary funds financial statements
