ACC330 Ch. 1-3 Multiple Choice Exam With
Complete Solutions
Which of the following is a special purpose government?
(a) The State of Arkansas
(b) Greene Township
(c) City of Seattle
(d) Minneapolis Public Schools - ANSWER (d) Minneapolis Public Schools
What is true for both government organizations and for-profit organizations? - ANSWER
Revenues may be earned through exchange transactions
Which of the following statements regarding primary sources of accounting and
financial reporting standards is false?
(a) The GASB sets standards for all state and local governments
(b) The FASB sets standards for all business and governmental not-for-profit entities
(c) The FASB and GASB are administered by the Financial Accounting Foundation
(d) The FASAB sets standards for the federal government and its agencies and
departments - ANSWER (b) The FASB sets standards for all business and governmental
not-for-profit entities
A tax watchdog group is interested in ensuring that the city does not spend more than
the amount of resources it receives in the current fiscal year. The watchdog group is
primarily interested in - ANSWER Fiscal accountability
The concept of interperiod equity refers to whether - ANSWER Current-year revenues
were sufficient to pay for current-year services
What are the components that are included in the minimum requirements for general
purpose external financial reporting? - ANSWER MD&A, government-wide financial
statements, fund financial statements, notes to the financial statements, and RSI
Which of the following financial statements is not a basic financial statement under
FASAB standards?
(a) Balance Sheet
(b) Statement of changes in net position
, (c) Statement of cash flows
(d) Statement of social insurance - ANSWER (c) Statement of cash flows
Which of the following is not a required section of a federal agency or department's
performance and accountability report (PAR)?
(a) A performance section, which includes an annual performance report (APRIL)
(b) An MD&A
(c) A basic financial statements section
(d) A statement of nonparticipation in political matters - ANSWER (d) A statement of
nonparticipation in political matters
The basic financial statements of a not-for-profit include all of the following except
(a) Statement of financial position
(b) Statement of activities
(c) Statement of changes in functional expenses
(d) Statement of cash flows - ANSWER (c) Statement of changes in functional expenses
The primary reason that not-for-profit (NFP) organizations should report expenses
incurred for program purposes separately from those for supporting services such as
management and general fund- raising is that - ANSWER Donors, potential donors,
oversight bodies, and others need to know what percentage of total expenses are being
incurred for carrying out the NFP's programs
What type of entities does GASB govern? - ANSWER Governmental departments (ex.
Illinois State University, New York City, McClean County, Chicago Transit Authority,
etc.)
What type of entities does FASB govern? - ANSWER Not-for-profit, professional
organization, non-governmental (ex. American Institute of Certified Public Accountants,
American Diabetes Associations, Mayo Clinic, Metropolitan Museum of Art, etc.)
What type of entities does FASAB govern? - ANSWER National & federal departments
(ex. Homeland Security, The Department of the Interior, etc.)
Government financial reports should be useful in assessing a government's
accountability. Three objectives of government financial reporting identify how financial
report can be useful in assessing a government's accountability. What are the three
objectives? - ANSWER - Providing information on operating results for the current
period
- Providing information related to the provision of services in accordance with legal
Complete Solutions
Which of the following is a special purpose government?
(a) The State of Arkansas
(b) Greene Township
(c) City of Seattle
(d) Minneapolis Public Schools - ANSWER (d) Minneapolis Public Schools
What is true for both government organizations and for-profit organizations? - ANSWER
Revenues may be earned through exchange transactions
Which of the following statements regarding primary sources of accounting and
financial reporting standards is false?
(a) The GASB sets standards for all state and local governments
(b) The FASB sets standards for all business and governmental not-for-profit entities
(c) The FASB and GASB are administered by the Financial Accounting Foundation
(d) The FASAB sets standards for the federal government and its agencies and
departments - ANSWER (b) The FASB sets standards for all business and governmental
not-for-profit entities
A tax watchdog group is interested in ensuring that the city does not spend more than
the amount of resources it receives in the current fiscal year. The watchdog group is
primarily interested in - ANSWER Fiscal accountability
The concept of interperiod equity refers to whether - ANSWER Current-year revenues
were sufficient to pay for current-year services
What are the components that are included in the minimum requirements for general
purpose external financial reporting? - ANSWER MD&A, government-wide financial
statements, fund financial statements, notes to the financial statements, and RSI
Which of the following financial statements is not a basic financial statement under
FASAB standards?
(a) Balance Sheet
(b) Statement of changes in net position
, (c) Statement of cash flows
(d) Statement of social insurance - ANSWER (c) Statement of cash flows
Which of the following is not a required section of a federal agency or department's
performance and accountability report (PAR)?
(a) A performance section, which includes an annual performance report (APRIL)
(b) An MD&A
(c) A basic financial statements section
(d) A statement of nonparticipation in political matters - ANSWER (d) A statement of
nonparticipation in political matters
The basic financial statements of a not-for-profit include all of the following except
(a) Statement of financial position
(b) Statement of activities
(c) Statement of changes in functional expenses
(d) Statement of cash flows - ANSWER (c) Statement of changes in functional expenses
The primary reason that not-for-profit (NFP) organizations should report expenses
incurred for program purposes separately from those for supporting services such as
management and general fund- raising is that - ANSWER Donors, potential donors,
oversight bodies, and others need to know what percentage of total expenses are being
incurred for carrying out the NFP's programs
What type of entities does GASB govern? - ANSWER Governmental departments (ex.
Illinois State University, New York City, McClean County, Chicago Transit Authority,
etc.)
What type of entities does FASB govern? - ANSWER Not-for-profit, professional
organization, non-governmental (ex. American Institute of Certified Public Accountants,
American Diabetes Associations, Mayo Clinic, Metropolitan Museum of Art, etc.)
What type of entities does FASAB govern? - ANSWER National & federal departments
(ex. Homeland Security, The Department of the Interior, etc.)
Government financial reports should be useful in assessing a government's
accountability. Three objectives of government financial reporting identify how financial
report can be useful in assessing a government's accountability. What are the three
objectives? - ANSWER - Providing information on operating results for the current
period
- Providing information related to the provision of services in accordance with legal
