Government and Not-for-Profit Accounting: Concepts and Practices (9th Edition) by Michael H. Granof – Test Bank | Exam-Ready Questions with Complete Coverage (Chapters 1–17)

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,Test Bank for Government and Not-for-Profit Accounting: Concepts and
Practices, 9th Edition by Michael H. Granof

Chapter 1
The Government and Not-For-Profit Environment



TRUE/FALSE (CHAPTER 1)

1. The objectives of a typical government or not-for-profit entity include abstract
goals that are more difficult to quantify than profit.

2. A government’s budget may be backed by the force of law.

3. Governments have no need for an accounting system.

4. A government’s constituents rely on general purpose financial statements for
a considerable amount of information about their government.

5. Governments and not-for-profit entities may never engage in business-type
activities.

6. Lenders use the financial statements of governments and not-for-profit
entities just as they would those of businesses, that is, to help assess the
borrower’s credit-worthiness.

7. Financial statements, no matter how prepared, do not directly affect the
economic worth of an entity.

8. The Federal Accounting Standards Advisory Board’s standards do not apply
to the federal Department of the Treasury.

9. Sarbanes-Oxley was passed in 2002 with the sole purpose of enhancing the
independence of the GASB.

10. The Governmental Accounting Standards Board establishes generally
accepted accounting principles for all state and local governments and all
not-for-profit entities.




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, ANSWERS TO TRUE/FALSE QUESTIONS (CHAPTER 1)

1. True
2. True
3. False
4. True
5. False
6. True
7. True
8. False
9. False
10. False




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