ACCT 4421 Exam 1 Questions and Answers
Graded A+
Which of the following is not a use of financial statements?
A) Assess financial condition
B) Compare actual results with the budget
C) Determine compliance with appropriate laws, regulations, and restrictions on the use of the
funds
D) Estimate financial health of the organization going out 5‐10 years
E) Evaluate efficiency and effectiveness Correct Answ_D) Estimate financial health of the
organization going out 5‐10 years
The only real users of the financial statements of governments and not‐for‐profits are taxpayers
and donors. Correct Answ_False
General‐purpose financial statements are targeted mainly at parties external to the organization.
Correct Answ_True
, Investor requirements for the bonds of governments and not‐for‐profits are very different than
their requirements for corporate securities. Correct Answ_False
Which of the following is not a main users of the financial statements of governments and not‐
for‐profits?
A) Internal Revenue Service
B) Governing boards
C) Donors and grantors
D) Regulatory and oversight agencies
E) Employees Correct Answ_A) Internal Revenue Service
Financial reporting should provide information about just the sources and uses of financial
resources directly related to the mission of the organization. Correct Answ_False
The conflict between the two objectives of interperiod equity and budgetary compliance
characterizes many of the issues that government accountants. Correct Answ_True
Taking into account the unique characteristics of governments and their environment, the
Governmental Accounting Standards Board has established accountability as the cornerstone of
Graded A+
Which of the following is not a use of financial statements?
A) Assess financial condition
B) Compare actual results with the budget
C) Determine compliance with appropriate laws, regulations, and restrictions on the use of the
funds
D) Estimate financial health of the organization going out 5‐10 years
E) Evaluate efficiency and effectiveness Correct Answ_D) Estimate financial health of the
organization going out 5‐10 years
The only real users of the financial statements of governments and not‐for‐profits are taxpayers
and donors. Correct Answ_False
General‐purpose financial statements are targeted mainly at parties external to the organization.
Correct Answ_True
, Investor requirements for the bonds of governments and not‐for‐profits are very different than
their requirements for corporate securities. Correct Answ_False
Which of the following is not a main users of the financial statements of governments and not‐
for‐profits?
A) Internal Revenue Service
B) Governing boards
C) Donors and grantors
D) Regulatory and oversight agencies
E) Employees Correct Answ_A) Internal Revenue Service
Financial reporting should provide information about just the sources and uses of financial
resources directly related to the mission of the organization. Correct Answ_False
The conflict between the two objectives of interperiod equity and budgetary compliance
characterizes many of the issues that government accountants. Correct Answ_True
Taking into account the unique characteristics of governments and their environment, the
Governmental Accounting Standards Board has established accountability as the cornerstone of
