SOLUTION MANUAL For Government and Not-for-Profit Accounting: Concepts and Practices 9th Edition by Granof; Khumawala; Calabrese, Verified Chapters 1 - 17, Complete Newest Version

Created By: A Solution
pp pp pp




Solution Manual for Government And Not For Profit Accounting
pp pp pp pp pp pp pp pp




pp Concepts And Practices 9th Edition Michael H. Granof|Latest
pp pp pp pp pp pp pp




pp Updated Version 2024. A+
pp pp pp




https://www.stuvia.com/user/asolution

,Created By: A Solution pp pp pp




Chapter 1 pp




The Government and Not-For-Profit Environment
pp pp pp pp




Questions for Review and Discussion pp pp pp pp




1. The critical distinction between for-profit businesses and not-for-profits including
pp pp pp pp pp pp pp pp




pp governments is that businesses have profit as their main motive whereas the others have
pp pp pp pp pp pp pp pp pp pp pp pp pp




pp service. A primary purpose of financial reporting is to report on an entity‘s accomplishments —
pp pp pp pp pp pp pp pp pp pp pp pp pp pp




pp how well it achieved its objectives. Accordingly, the financial statements of businesses
pp pp pp pp pp pp pp pp pp pp pp




pp measure profitability, their key objective. Financial reports of governments and other not-for-
pp pp pp pp pp pp pp pp pp pp pp




profits should not focus on profitability, since it is not a relevant objective. Ideally, therefore,
pp pp pp pp pp pp pp pp pp pp pp pp pp pp




pp they should focus on other performance objectives, such as how well the organizations met
pp pp pp pp pp pp pp pp pp pp pp pp pp




pp their service goals. In reality, however, the goal of reporting on how well they have achieved
pp pp pp pp pp pp pp pp pp pp pp pp pp pp pp




pp such goals has proven difficult to attain and the financial reports have focused mainly on
pp pp pp pp pp pp pp pp pp pp pp pp pp pp




pp financially- related data. pp pp




2. Governments and not-for-profits are ―governed‖ by the budget, whereas businesses are
pp pp pp pp pp pp pp pp pp pp




pp governed by the marketplace. The budget is the key political and fiscal document of
pp pp pp pp pp pp pp pp pp pp pp pp pp




p p governments and not-for-profits. It determines how an entity obtains its resources and how it
pp pp pp pp pp pp pp pp pp pp pp pp pp




pp allocates them. It encapsulates most key decisions of consequence made by the organization. In
pp pp pp pp pp pp pp pp pp pp pp pp pp




pp a government the budget is not merely a managerial document; it is the law.
pp pp pp pp pp pp pp pp pp pp pp pp pp




3. Owing to the significance of the budget, constituents want assurance that the
pp pp pp pp pp pp pp pp pp pp pp




entity achieves its revenue estimates and complies with its spending mandates. They
pp pp pp pp pp pp pp pp pp pp pp pp




pp expect the financial statements to report on how the budget was administered.
pp pp pp pp pp pp pp pp pp pp pp




4. Interperiod equity is the concept that taxpayers of today pay for the services that
pp pp pp pp pp pp pp pp pp pp pp pp pp




pp they receive and not shift the payment burden to taxpayers of the future. Financial reporting
pp pp pp pp pp pp pp pp pp pp pp pp pp pp




pp must indicate the extent to which interperiod equity has been achieved. Therefore, it must
pp pp pp pp pp pp pp pp pp pp pp pp pp




pp determine


https://www.stuvia.com/user/asolution

,Created By: A Solution pp pp pp




and report upon the economic costs of the services performed (not merely the cash costs) and of
pp pp pp pp pp pp pp pp pp pp pp pp pp pp pp pp




pp the taxpayers‘ contribution toward covering those costs.
pp pp pp pp pp pp




5. The matching concept may be less relevant for governments and not-for-profits than
pp pp pp pp pp pp pp pp pp pp pp




pp for businesses because there may be no connection between revenues generated and the
pp pp pp pp pp pp pp pp pp pp pp pp




pp quantity, quality or cost of services performed. An increase in the demand for, or cost of,
pp pp pp pp pp pp pp pp pp pp pp pp pp pp pp




pp services provided by a homeless shelter would not necessarily result in an increase in the
pp pp pp pp pp pp pp pp pp pp pp pp pp pp




pp amount of donations that it receives. Of course, governments and not- for-profits are
pp pp pp pp pp pp pp pp pp pp pp pp




pp concerned with measuring interperiod equity and for that purpose the matching concept may
pp pp pp pp pp pp pp pp pp pp pp pp




pp be very relevant.
pp pp




6. Governments must maintain an accounting system that assures that restricted pp pp pp pp pp pp pp pp pp




pp resources are not inadvertently expended for inappropriate purposes. Moreover, statement
pp pp pp pp pp pp pp pp pp




pp users may need separate information on the restricted resources by category of restriction and
pp pp pp pp pp pp pp pp pp pp pp pp pp




pp the unrestricted
pp




resources. In practice, these requirements have led governments to adopt a system of ―fund‖
pp pp pp pp pp pp pp pp pp pp pp pp pp




pp accounting and reporting. pp pp




7. Even governments within the same category may engage in different types of
pp pp pp pp pp pp pp pp pp pp pp




pp activities. For example, some cities operate a school system whereas others do not. Those
pp pp pp pp pp pp pp pp pp pp pp pp pp




pp that are not within the same category may have relatively little in common. For example, a
pp pp pp pp pp pp pp pp pp pp pp pp pp pp pp




pp state government shares few characteristics with a city.
pp pp pp pp pp pp pp




8. If a government has the power to tax, then it has command over, and access to,
pp pp pp pp pp pp pp pp pp pp pp pp pp pp pp




pp resources. Therefore, its fiscal well-being cannot be assessed merely by measuring the
pp pp pp pp pp pp pp pp pp pp pp




p p assets p p that p p it
―owns.‖ For p p p p example, p p the fiscal condition of a city should incorporate the
p p p p p p p p p p p p pp pp




pp wealth of the residents and businesses within the city, their earning capacity, and the city‘s
pp pp pp pp pp pp pp pp pp pp pp pp pp pp




pp willingness to exploit its tax base. pp pp pp pp pp




9. Many governments budget on a cash or near-cash basis. However, the cash basis of
pp pp pp pp pp pp pp pp pp pp pp pp pp




pp accounting does not provide adequate information with which to assess interperiod equity.
pp pp pp pp pp pp pp pp pp pp pp




https://www.stuvia.com/user/asolution

, Created By: A Solution
pp pp pp




pp Financial statements that satisfy the objective of reporting on interperiod equity may not
pp pp pp pp pp pp pp pp pp pp pp pp




pp satisfy that of reporting on budgetary compliance. Moreover, statements that report on either
pp pp pp pp pp pp pp pp pp pp pp pp




interperiod
pp




https://www.stuvia.com/user/asolution