ACCT 4421 Exam 1: ch 3 Questions and
Answers 100% Solved
drawbacks of Object Classification Budget Correct Answ_discourage planning, promotes
more bottom-up budgeting than top-down budgeting; overwhelms top-level decision makers w
details; limits post-budget evaluation
fund, source Correct Answ_Revenues; GASB suggests-> 1st classify by __________, 2nd
classify by __________
1. preparation
2. legislative adoption and executive approval
3. execution
4. reporting and auditing Correct Answ_key phases of budget cycle? (4)
no budgeting rules, GASB recommends using modified accrual, but most normally use cash
basis or modified cash basis Correct Answ_On what basis of Accounting are budgets
prepared?
, budgetary basis Correct Answ_type of budget selected by government referred to as the ?
modified cash basis budgeting Correct Answ_assign revenues and expenditures to the period
during which the cash is expected to be received or disbursed; treat encumbrances (commitments
to purchase goods or services) equivalent to actual purchases; recognize taxes and other revenues
in the year in which they are due and not in the year in which they are expected to be collected
complicates financial reporting Correct Answ_disadvantage of cash/modified cash budgeting
actual-to-budget Correct Answ_GAAP requires govt's to include in their annual reports a
comparison of ____________________ for each govt fund for which an annual budget has been
adopted
budgetary basis Correct Answ_govt's present their budget-to-actual comparison on a
_________________ and include a schedule that reconciles the budgetary to GAAP amounts
1. basis of accounting
2. timing
3. perspective
Answers 100% Solved
drawbacks of Object Classification Budget Correct Answ_discourage planning, promotes
more bottom-up budgeting than top-down budgeting; overwhelms top-level decision makers w
details; limits post-budget evaluation
fund, source Correct Answ_Revenues; GASB suggests-> 1st classify by __________, 2nd
classify by __________
1. preparation
2. legislative adoption and executive approval
3. execution
4. reporting and auditing Correct Answ_key phases of budget cycle? (4)
no budgeting rules, GASB recommends using modified accrual, but most normally use cash
basis or modified cash basis Correct Answ_On what basis of Accounting are budgets
prepared?
, budgetary basis Correct Answ_type of budget selected by government referred to as the ?
modified cash basis budgeting Correct Answ_assign revenues and expenditures to the period
during which the cash is expected to be received or disbursed; treat encumbrances (commitments
to purchase goods or services) equivalent to actual purchases; recognize taxes and other revenues
in the year in which they are due and not in the year in which they are expected to be collected
complicates financial reporting Correct Answ_disadvantage of cash/modified cash budgeting
actual-to-budget Correct Answ_GAAP requires govt's to include in their annual reports a
comparison of ____________________ for each govt fund for which an annual budget has been
adopted
budgetary basis Correct Answ_govt's present their budget-to-actual comparison on a
_________________ and include a schedule that reconciles the budgetary to GAAP amounts
1. basis of accounting
2. timing
3. perspective
