ACCT 4421 Exam 1 Questions and Answers
100% Solved
General funds are established to account for resources legally restricted for specified purposes
True or False False
Fiduciary activities only benefit parties other than the government itself
True or False True
The Financial Accounting Standards Board requires all nongovernmental not-for-profit entities to
use fund accounting
True or False False
In addition to preparing fund financial statements, governments should also prepare consolidated
financial statements to provide information on the financial position and operating results of the
government as a single economic entity
,True or False True
Fiduciary activities should be reported in fund statements, but should be excluded from the
government-wide statements
True or False True
At first glance, the government-wide statement of activities bears little resemblance to the
income statement of a business
True or False True
In accounting for costs incurred on a major construction project in a capital projects fund, the
construction outlays are reported as expenditures, not capital assets
True or False True
In governments, in contrast to businesses,
, A. Expenditures are driven mainly by the ability of the entity to raise revenues
B. The amount of revenues collected is a signal of the demand for services
C. There may not be a direct relationship between revenues raised and the demand for the entity's
services
D. The amount of expenditures is independent of the amount of revenues collected C.
There may not be a direct relationship between revenues raised and the demand for the entity's
services
The organization responsible for setting accounting standards for state and local governments is
the
A. FASB
B. GASB
C. FASAB
D. AICPA B. GASB
Governments differ from businesses in that they
A. Do not raise capital in the financial markets
100% Solved
General funds are established to account for resources legally restricted for specified purposes
True or False False
Fiduciary activities only benefit parties other than the government itself
True or False True
The Financial Accounting Standards Board requires all nongovernmental not-for-profit entities to
use fund accounting
True or False False
In addition to preparing fund financial statements, governments should also prepare consolidated
financial statements to provide information on the financial position and operating results of the
government as a single economic entity
,True or False True
Fiduciary activities should be reported in fund statements, but should be excluded from the
government-wide statements
True or False True
At first glance, the government-wide statement of activities bears little resemblance to the
income statement of a business
True or False True
In accounting for costs incurred on a major construction project in a capital projects fund, the
construction outlays are reported as expenditures, not capital assets
True or False True
In governments, in contrast to businesses,
, A. Expenditures are driven mainly by the ability of the entity to raise revenues
B. The amount of revenues collected is a signal of the demand for services
C. There may not be a direct relationship between revenues raised and the demand for the entity's
services
D. The amount of expenditures is independent of the amount of revenues collected C.
There may not be a direct relationship between revenues raised and the demand for the entity's
services
The organization responsible for setting accounting standards for state and local governments is
the
A. FASB
B. GASB
C. FASAB
D. AICPA B. GASB
Governments differ from businesses in that they
A. Do not raise capital in the financial markets
