Solutions Manual for
Accounting for
Governmental & Nonprofit
Entities 19th Edition By Reck,
Lowensohn, Neely, Wilson
(All Chapters 1-17, 100%
Original Verified, A+ Grade)
All Chapters Arranged
Reverse 17-1
Supplement Files Download
link At the end of PDF File.
,Chapter 17 - Accounting and Reporting for the Federal Government
CHAPTER 17: ACCOUNTING AND REPORTING FOR THE FEDERAL
GOVERNMENT
OUTLINE
Number Topic Type/Task Status
(re: 18/e)
Questions:
17-1 Roles of GAO, Treasury, and OMB in federal Explain Same
financial reporting
17-2 Federal GAAP hierarchy Compare Same
17-3 Objectives of federal financial reporting List, explain Same
17-4 Accounts used in federal accounting Compare Same
17-5 Net position and net assets Compare Same
17-6 Reporting entity Compare Same
17-7 Federal funds Identify, compare Same
17-8 Stewardship assets Define, compare Same
17-9 Dual-track accounting Explain, relate Same
17-10 Performance accountability report Explain, identify Same
17-11 Intended Audience for the U.S. Financial Report Explain, identify New
Cases:
17-12 Agency PAR and audit report Calculate, explain Revised
17-13 Research case—FASAB Explain, discuss Revised
17-14 Audit of U.S. Government-wide annual report Explain, discuss Revised
17-15 Analysis of the U.S. Government MD&A Analyze, evaluate Revised
Exercises/Problems:
17-16 Various Multiple Choice 17-15. Items
9 and 10
revised; items
12 and 13
new.
17-17 Identifying account types and normal balances Identify 17-16
17-18 Fund balance with U.S. Treasury Compute 17-17 revised
17-19 Agency financial statements, continuation of 17-18 JE, apply 17-18 revised
17-20 Prepare statement of net cost Apply 17-19
17-21 Prepare statement of budgetary resources Apply 17-20 revised
17-22 Transactions and statement of financing Apply 17-21
17-23 Financial statement analysis Analysis 17-22 revised
17-1
Copyright ©2022 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
,Chapter 17 - Accounting and Reporting for the Federal Government
CHAPTER 17: ACCOUNTING AND REPORTING FOR THE FEDERAL
GOVERNMENT
Answers to Questions
17-1. Each of these three agencies plays a significant role in the financial accounting and
reporting of federal agencies. The GAO serves as the independent audit agency for the
federal government. It is responsible for the audit of the federal government as a whole.
Its reports help ensure that the federal agencies are complying with legal requirements
and GAAP reporting requirements. As established by law, the GAO also has
responsibility for prescribing accounting standards; this responsibility has been delegated
to the FASAB.
The Department of Treasury is the primary revenue collecting and cash disbursement
department of the federal government. As such, it is charged with maintaining the system
of central accounts used by federal agencies. The Department of Treasury maintains the
standard general ledger, subject to OMB approval, for both budgetary and proprietary
accounts of the federal government.
The OMB provides the financial plan for the federal government. Directly related to
accounting and financial reporting are several circulars issued by OMB that provide
guidance to agencies on how to record and report transactions. Two of the circulars are
mentioned in the chapter—Circular A-134, “Financial Accounting Principles and
Standards,” and Circular A-136, “Financial Reporting Requirements.” Additionally, the
OMB provides approvals on the standard general ledger and provides several cost
circulars that help the federal agencies in ensuring that funds disbursed are being used
appropriately by subrecipients.
General Problem Information: Roles of GAO, Treasury, and OMB in federal reporting
Learning Objective: 17-1
Topic: Federal Government Financial Management Structure; GAAP for the Federal
Government
Bloom’s Taxonomy: Understand
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: BB: Industry
Level of Difficulty: Medium
17.2. The GAAP hierarchies for the federal government and state and local governments are
similar but have a few notable differences. One major difference is that federal
authoritative guidance comes from the FASAB, while state and local government
authoritative guidance is issued by the GASB. There are also some differences in the type
of outside guidance accepted as authoritative by the two standard-setting bodies. Both
hierarchies have been codified by the respective standard-setting bodies, the FASAB and
the GASB.
17-2
Copyright ©2022 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
, Chapter 17 - Accounting and Reporting for the Federal Government
Ch. 17, Answers, Question 17- 2 (Cont’d)
For federal government GAAP, there are four categories of principles, while the GASB
only has two levels in its hierarchy. The highest level (category a) being the statements
and interpretations issued by the respective standard-setting bodies.
The category b principles include the Technical Bulletins issued by the respective
standard-setting bodies. AICPA Industry and Accounting Guides are also considered
category b principles if made applicable to federal entities by the FASAB or state and
local governments if cleared by the GASB. The GASB can also make AICPA Statements
of Position applicable. In addition, the GASB considers the following sources category b:
GASB implementation guides and any other literature of the AICPA cleared by the
GASB.
In addition to categories a and b, the FASAB has categories c and d. Category c
principles consist of Technical Releases of the Accounting and Auditing Policy
Committee of the FASAB, while category d guidance consists of implementation guides
issued by the FASAB, as well as widely accepted practices. All other sources not
previously mentioned are non-authoritative.
General Problem Information: Federal GAAP hierarchy
Learning Objective: 17-1
Topic: Federal Government Financial Management Structure; GAAP for the Federal
Government
Bloom’s Taxonomy: Understand
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: BB: Industry
Level of Difficulty: Medium
17.3. The four objectives for federal financial reporting as outlined in SFFAC No. 1 are: (1)
budgetary integrity, (2) operating performance, (3) stewardship, and (4) adequacy of
systems and controls. Budgetary integrity is ensuring that taxes and other monies raised
by the federal government are raised in accordance with law and regulation, and that
expenditures are made in accordance with law and regulation. Operating performance
refers to how efficient, effective, and economical the federal agencies have been in using
resources to provide services. Service efforts and accomplishments information is useful
in helping to assess operating performance. Stewardship refers to accountability for the
general welfare of the country. To assess stewardship, information is needed on how the
federal government’s operations and investments for the period have impacted the
country, and as a result, how the government’s and country’s financial condition has
changed or could change in the future. Ensuring the adequacy of systems and controls is
necessary for (1) transactions to be executed in accordance with budget, law, and other
requirements; (2) deterrence of fraud, waste, and abuse; and (3) performance
measurement information to be adequately supported.
In many ways, the objectives are similar, in that both the FASAB and the GASB focus on
accountability. However, the focus of the FASAB objectives needs to differ somewhat
17-3
Copyright ©2022 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Accounting for
Governmental & Nonprofit
Entities 19th Edition By Reck,
Lowensohn, Neely, Wilson
(All Chapters 1-17, 100%
Original Verified, A+ Grade)
All Chapters Arranged
Reverse 17-1
Supplement Files Download
link At the end of PDF File.
,Chapter 17 - Accounting and Reporting for the Federal Government
CHAPTER 17: ACCOUNTING AND REPORTING FOR THE FEDERAL
GOVERNMENT
OUTLINE
Number Topic Type/Task Status
(re: 18/e)
Questions:
17-1 Roles of GAO, Treasury, and OMB in federal Explain Same
financial reporting
17-2 Federal GAAP hierarchy Compare Same
17-3 Objectives of federal financial reporting List, explain Same
17-4 Accounts used in federal accounting Compare Same
17-5 Net position and net assets Compare Same
17-6 Reporting entity Compare Same
17-7 Federal funds Identify, compare Same
17-8 Stewardship assets Define, compare Same
17-9 Dual-track accounting Explain, relate Same
17-10 Performance accountability report Explain, identify Same
17-11 Intended Audience for the U.S. Financial Report Explain, identify New
Cases:
17-12 Agency PAR and audit report Calculate, explain Revised
17-13 Research case—FASAB Explain, discuss Revised
17-14 Audit of U.S. Government-wide annual report Explain, discuss Revised
17-15 Analysis of the U.S. Government MD&A Analyze, evaluate Revised
Exercises/Problems:
17-16 Various Multiple Choice 17-15. Items
9 and 10
revised; items
12 and 13
new.
17-17 Identifying account types and normal balances Identify 17-16
17-18 Fund balance with U.S. Treasury Compute 17-17 revised
17-19 Agency financial statements, continuation of 17-18 JE, apply 17-18 revised
17-20 Prepare statement of net cost Apply 17-19
17-21 Prepare statement of budgetary resources Apply 17-20 revised
17-22 Transactions and statement of financing Apply 17-21
17-23 Financial statement analysis Analysis 17-22 revised
17-1
Copyright ©2022 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
,Chapter 17 - Accounting and Reporting for the Federal Government
CHAPTER 17: ACCOUNTING AND REPORTING FOR THE FEDERAL
GOVERNMENT
Answers to Questions
17-1. Each of these three agencies plays a significant role in the financial accounting and
reporting of federal agencies. The GAO serves as the independent audit agency for the
federal government. It is responsible for the audit of the federal government as a whole.
Its reports help ensure that the federal agencies are complying with legal requirements
and GAAP reporting requirements. As established by law, the GAO also has
responsibility for prescribing accounting standards; this responsibility has been delegated
to the FASAB.
The Department of Treasury is the primary revenue collecting and cash disbursement
department of the federal government. As such, it is charged with maintaining the system
of central accounts used by federal agencies. The Department of Treasury maintains the
standard general ledger, subject to OMB approval, for both budgetary and proprietary
accounts of the federal government.
The OMB provides the financial plan for the federal government. Directly related to
accounting and financial reporting are several circulars issued by OMB that provide
guidance to agencies on how to record and report transactions. Two of the circulars are
mentioned in the chapter—Circular A-134, “Financial Accounting Principles and
Standards,” and Circular A-136, “Financial Reporting Requirements.” Additionally, the
OMB provides approvals on the standard general ledger and provides several cost
circulars that help the federal agencies in ensuring that funds disbursed are being used
appropriately by subrecipients.
General Problem Information: Roles of GAO, Treasury, and OMB in federal reporting
Learning Objective: 17-1
Topic: Federal Government Financial Management Structure; GAAP for the Federal
Government
Bloom’s Taxonomy: Understand
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: BB: Industry
Level of Difficulty: Medium
17.2. The GAAP hierarchies for the federal government and state and local governments are
similar but have a few notable differences. One major difference is that federal
authoritative guidance comes from the FASAB, while state and local government
authoritative guidance is issued by the GASB. There are also some differences in the type
of outside guidance accepted as authoritative by the two standard-setting bodies. Both
hierarchies have been codified by the respective standard-setting bodies, the FASAB and
the GASB.
17-2
Copyright ©2022 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
, Chapter 17 - Accounting and Reporting for the Federal Government
Ch. 17, Answers, Question 17- 2 (Cont’d)
For federal government GAAP, there are four categories of principles, while the GASB
only has two levels in its hierarchy. The highest level (category a) being the statements
and interpretations issued by the respective standard-setting bodies.
The category b principles include the Technical Bulletins issued by the respective
standard-setting bodies. AICPA Industry and Accounting Guides are also considered
category b principles if made applicable to federal entities by the FASAB or state and
local governments if cleared by the GASB. The GASB can also make AICPA Statements
of Position applicable. In addition, the GASB considers the following sources category b:
GASB implementation guides and any other literature of the AICPA cleared by the
GASB.
In addition to categories a and b, the FASAB has categories c and d. Category c
principles consist of Technical Releases of the Accounting and Auditing Policy
Committee of the FASAB, while category d guidance consists of implementation guides
issued by the FASAB, as well as widely accepted practices. All other sources not
previously mentioned are non-authoritative.
General Problem Information: Federal GAAP hierarchy
Learning Objective: 17-1
Topic: Federal Government Financial Management Structure; GAAP for the Federal
Government
Bloom’s Taxonomy: Understand
Accreditation Skills tag: AACSB: Knowledge Application, AICPA: BB: Industry
Level of Difficulty: Medium
17.3. The four objectives for federal financial reporting as outlined in SFFAC No. 1 are: (1)
budgetary integrity, (2) operating performance, (3) stewardship, and (4) adequacy of
systems and controls. Budgetary integrity is ensuring that taxes and other monies raised
by the federal government are raised in accordance with law and regulation, and that
expenditures are made in accordance with law and regulation. Operating performance
refers to how efficient, effective, and economical the federal agencies have been in using
resources to provide services. Service efforts and accomplishments information is useful
in helping to assess operating performance. Stewardship refers to accountability for the
general welfare of the country. To assess stewardship, information is needed on how the
federal government’s operations and investments for the period have impacted the
country, and as a result, how the government’s and country’s financial condition has
changed or could change in the future. Ensuring the adequacy of systems and controls is
necessary for (1) transactions to be executed in accordance with budget, law, and other
requirements; (2) deterrence of fraud, waste, and abuse; and (3) performance
measurement information to be adequately supported.
In many ways, the objectives are similar, in that both the FASAB and the GASB focus on
accountability. However, the focus of the FASAB objectives needs to differ somewhat
17-3
Copyright ©2022 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
