GovAcctExam1 2026 Questions and
Answers Graded A+
The Governmental Accounting Standards Board is assigned responsibility for
setting accounting and financial reporting standards for which of the following?
A)
Governments such as federal agencies, states, cities, counties, villages, and
townships.
B)
State and local government entities and governmentally-related units and agencies,
such as utilities, authorities, hospitals, and colleges and universities.
C)
Not-for-profit organizations.
D)
,State and local governments and all not-for-profit organizations. - Correct answer-
B)
State and local government entities and governmentally-related units and agencies,
such as utilities, authorities, hospitals, and colleges and universities.
You are trying to decide if an entity you are reviewing is a government or a not-for-
profit. Which of the following would indicate it is a government rather than a not-
for-profit entity?
A)
Absence of profit motive.
B)
A primary source of revenues is taxes.
C)
Resource providers do not expect benefits proportional to the resources provided.
D)
Absence of a defined ownership interest that can be sold, transferred, or redeemed.
- Correct answer-B)
,A primary source of revenues is taxes.
Which of the following is identified by the GASB as the "cornerstone" of all
financial reporting in government?
A)
Decision usefulness.
B)
Stewardship.
C)
Accountability.
D)
Interperiod equity. - Correct answer-C)
Accountability.
Which of the following is not an objective of financial reporting by state and local
governments?
A)
, To assist users in assessing the adequacy of systems and controls.
B)
To assist users in assessing financial condition and results of operations.
C)
To assist financial report users in comparing actual financial results with the legally
adopted budget.
D)
To assist in determining compliance with finance-related laws, rules, and
regulations. - Correct answer-A)
To assist users in assessing the adequacy of systems and controls.
One of the minimum requirements for general purpose external financial reporting
by governments is
A)
Management's discussion and analysis (MD&A).
B)
Transmittal letter.
Answers Graded A+
The Governmental Accounting Standards Board is assigned responsibility for
setting accounting and financial reporting standards for which of the following?
A)
Governments such as federal agencies, states, cities, counties, villages, and
townships.
B)
State and local government entities and governmentally-related units and agencies,
such as utilities, authorities, hospitals, and colleges and universities.
C)
Not-for-profit organizations.
D)
,State and local governments and all not-for-profit organizations. - Correct answer-
B)
State and local government entities and governmentally-related units and agencies,
such as utilities, authorities, hospitals, and colleges and universities.
You are trying to decide if an entity you are reviewing is a government or a not-for-
profit. Which of the following would indicate it is a government rather than a not-
for-profit entity?
A)
Absence of profit motive.
B)
A primary source of revenues is taxes.
C)
Resource providers do not expect benefits proportional to the resources provided.
D)
Absence of a defined ownership interest that can be sold, transferred, or redeemed.
- Correct answer-B)
,A primary source of revenues is taxes.
Which of the following is identified by the GASB as the "cornerstone" of all
financial reporting in government?
A)
Decision usefulness.
B)
Stewardship.
C)
Accountability.
D)
Interperiod equity. - Correct answer-C)
Accountability.
Which of the following is not an objective of financial reporting by state and local
governments?
A)
, To assist users in assessing the adequacy of systems and controls.
B)
To assist users in assessing financial condition and results of operations.
C)
To assist financial report users in comparing actual financial results with the legally
adopted budget.
D)
To assist in determining compliance with finance-related laws, rules, and
regulations. - Correct answer-A)
To assist users in assessing the adequacy of systems and controls.
One of the minimum requirements for general purpose external financial reporting
by governments is
A)
Management's discussion and analysis (MD&A).
B)
Transmittal letter.
