NFP Exam 1 Questions with Complete
Solutions
GASB sets standards for state and local government accounting and financial reporting
GNP user charges at modest levels to assure that most or all people needing the goods can
obtain them; may be at break even level or at low profit rate to expand or improve services
Purpose of GASB's GAAP hierarchy provides guidelines of authoritativeness to
understand what constitutes as GAAP
GASB Statements and Interpretations are the most authoritative
The body with the primary accounting standards setting-authority for state and local
governments is:
A. AICPA
B. FASB
C. Government Finance Officers Association
D. GASB D. GASB
,The body with the primary accounting standards setting authority for colleges and universities is
the:
A. National Association of College and University Business Officers
B. FASB
C. GASB
D. GASB for governmental colleges and universities and the FASB for all other colleges and
universities D. GASB for governmental colleges and universities and the FASB for all
other colleges and universities
A governmental (expendable) fund accounting entity:
A. is often useful in accounting for general government activities but is optional (expendable)
B. includes only financial assets and related liabilities and depreciable (expendable) capital
assets. Nondepreciable capital assets are not reported in governmental funds
C. Includes financial assets and related liabilities
D. has its operating activities measured and reported in terms of revenues and expenses, but the
timing of expense recognition differs from that in similar business organizations C.
Includes financial assets and related liabilities
In which of the following situations would the amounts of expense and expenditure for the
period differ?
, A. An entity uses and is billed for utilities but has paid only half of the amount billed at year end
B. An entity purchases equipment for cash. The purchase occurred on the last day of the fiscal
year
C. Salaries and wages incurred and paid during the period were $100,000. Additional salaries
and wages accrued at year end were $4,000.
D. The amount of expense and expenditure to be recognized differs in more than one of these
situations B. An entity purchases equipment for cash. The purchase occurred on the last
day of the fiscal year
Legally adopted budgets of governmental funds are:
A. fixed dollar budgets, which establish expenditure limits that are not to be exceeded
B. fixed budgets that cannot be modified during the year
C. flexible budgets in which the expenditure limits are automatically modified to reflect larger
than budgeted levels of various services
D. Always adopted using the same basis of accounting required by GAAP A. fixed dollar
budgets, which establish expenditure limits that are not to be exceeded
Which of the following statements is false? A fund:
A. is an entity for which financial statements can be prepared
Solutions
GASB sets standards for state and local government accounting and financial reporting
GNP user charges at modest levels to assure that most or all people needing the goods can
obtain them; may be at break even level or at low profit rate to expand or improve services
Purpose of GASB's GAAP hierarchy provides guidelines of authoritativeness to
understand what constitutes as GAAP
GASB Statements and Interpretations are the most authoritative
The body with the primary accounting standards setting-authority for state and local
governments is:
A. AICPA
B. FASB
C. Government Finance Officers Association
D. GASB D. GASB
,The body with the primary accounting standards setting authority for colleges and universities is
the:
A. National Association of College and University Business Officers
B. FASB
C. GASB
D. GASB for governmental colleges and universities and the FASB for all other colleges and
universities D. GASB for governmental colleges and universities and the FASB for all
other colleges and universities
A governmental (expendable) fund accounting entity:
A. is often useful in accounting for general government activities but is optional (expendable)
B. includes only financial assets and related liabilities and depreciable (expendable) capital
assets. Nondepreciable capital assets are not reported in governmental funds
C. Includes financial assets and related liabilities
D. has its operating activities measured and reported in terms of revenues and expenses, but the
timing of expense recognition differs from that in similar business organizations C.
Includes financial assets and related liabilities
In which of the following situations would the amounts of expense and expenditure for the
period differ?
, A. An entity uses and is billed for utilities but has paid only half of the amount billed at year end
B. An entity purchases equipment for cash. The purchase occurred on the last day of the fiscal
year
C. Salaries and wages incurred and paid during the period were $100,000. Additional salaries
and wages accrued at year end were $4,000.
D. The amount of expense and expenditure to be recognized differs in more than one of these
situations B. An entity purchases equipment for cash. The purchase occurred on the last
day of the fiscal year
Legally adopted budgets of governmental funds are:
A. fixed dollar budgets, which establish expenditure limits that are not to be exceeded
B. fixed budgets that cannot be modified during the year
C. flexible budgets in which the expenditure limits are automatically modified to reflect larger
than budgeted levels of various services
D. Always adopted using the same basis of accounting required by GAAP A. fixed dollar
budgets, which establish expenditure limits that are not to be exceeded
Which of the following statements is false? A fund:
A. is an entity for which financial statements can be prepared
