ACC330 Questions and Answers 2025

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 - Correct Ans-(d) Minneapolis Public Schools What is true for both government organizations and for-profit organizations? - Correct Ans-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 - Correct Ans-(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 - Correct Ans-Fiscal accountability The concept of interperiod equity refers to whether - Correct Ans-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? - Correct Ans-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 - Correct Ans-(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 - Correct Ans-(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 - Correct Ans-(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 - Correct Ans-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? - Correct Ans-Governmental departments (ex. Illinois State University, New York City, McClean County, Chicago Transit Authority, etc.) What type of entities does FASB govern? - Correct Ans-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? - Correct Ans-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? - Correct Ans-- Providing information on operating results for the current period - Providing information related to the provision of services in accordance with legal adopted budgets - Providing information on the ability of the government to meet obligations as they come due Which of the following statements is true regarding the basic financial statement of a state or local government? (a) Separate columns should be provided in the government wide financial statement for governmental activities and business type activities (b) Governmental fund and proprietary fund financial statements should provide a separate column for each major fund (c) Aggregate information about all nonmajor governmental funds should be reported in a single column of the governmental fund financial statements and all nonmajor enterprise funds should be reported in a single column of proprietary fund financial statements (d) All of the above - Correct Ans-(d) All of the above A member of the city council does not understand why governments need to use funds. He believes it makes reporting too complex and that funds should be eliminated. What explanation would you use to help explain why funds are needed? - Correct Ans-Funds are necessary to help increase transparency by showing that legal constraints on spending certain revenues for the specific purpose for which the revenues were intended are being met The measurement focus and basis of accounting that should be used for the government-wide financia