TEST BANK FOR ACCOUNTING FOR GOVERNMENTAL AND N
ONPROFIT ENTITIES 19TH JACQUELINE L RECK DANIEL NEE
LY SUZANNE LOWENSOHN
1) Explain |the |essential |differences |between |general |purpose |and |special |purpose
|governments |and |give |several |examples |of |each.
2) Identify |and |explain |the |characteristics |that |distinguish |governments |and |not-for-profit
|entities |from |business |entities.
3) GASB |and |FASB |standards |are |concerned |only |with |external |financial |reporting; |whereas,
|FASAB |standards |are |concerned |with |both |internal |and |external |financial |reporting. |Do | you |agree
|with |this |statement? |Why |or |why |not?
4) Why |should |persons |interested |in |reading |financial |reports |of |governments |and |not-for-
|profit |entities |be |familiar |with |standards |set |by |the |GASB |and |the |FASB?
Version |1 1
,5) Explain |in |your |own |words |why |accountability |is |the |cornerstone |of |all |financial
|reporting |in |government.
6) In |your |own |words |state |the |primary |needs |the |GASB |believes |external |users |have |for
|financial |reports |of |state |and |local |governments. |For |contrast, |state |the |uses |the |FASB |believes
|external |users |have |for |the |financial |reports |of |not-for-profit |organizations.
7) Describe |the |difference |between |a |comprehensive |annual |financial |report |(CAFR) |and
|GASB |general |purpose |external |financial |reporting |for |state |and |local |governments.
8) Identify |and |briefly |explain |the |four |sections |of |the |performance |and |accountability |report
|(PAR) |that |the |Office |of |Management |and |Budget |requires |major |federal |departments |and
|agencies |to |prepare.
Version |1 2
,9) Explain |the |concepts |of |fiscal |and |operational |accountability |and |the |basis |of |accounting
|used |to |capture |each |concept.
10) Describe |the |comprehensive |annual |financial |report |(CAFR). |What |are |the |sections |of |the
|report |and |which |components |of |the |organization |should |it |include? |Is |a |CAFR |required?
11) 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.
Version |1 3
, 12) Which |of |the |following |bodies |has |been |established |to |recommend |accounting |and
|financial |reporting |standards |for |the |federal |government?
A) Financial |Accounting |Standards |Board |(FASB).
B) Governmental |Accounting |Standards |Board |(GASB).
C) Federal |Accounting |Foundation |(FAF).
D) Federal |Accounting |Standards |Advisory |Board |(FASAB).
13) The |Financial |Accounting |Standards |Board |has |the |responsibility |for |setting |accounting
|and |financial |reporting |standards |for |which |of |the |following?
A) All |not-for-profit |organizations |that |are |nongovernmental |and |business |entities.
B) All |not-for-profit |organizations |and |business |entities.
C) All |not-for-profit |organizations.
D) Special |purpose |governments |with |a |business |purpose.
14) 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.
15) 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.
Version |1 4
ONPROFIT ENTITIES 19TH JACQUELINE L RECK DANIEL NEE
LY SUZANNE LOWENSOHN
1) Explain |the |essential |differences |between |general |purpose |and |special |purpose
|governments |and |give |several |examples |of |each.
2) Identify |and |explain |the |characteristics |that |distinguish |governments |and |not-for-profit
|entities |from |business |entities.
3) GASB |and |FASB |standards |are |concerned |only |with |external |financial |reporting; |whereas,
|FASAB |standards |are |concerned |with |both |internal |and |external |financial |reporting. |Do | you |agree
|with |this |statement? |Why |or |why |not?
4) Why |should |persons |interested |in |reading |financial |reports |of |governments |and |not-for-
|profit |entities |be |familiar |with |standards |set |by |the |GASB |and |the |FASB?
Version |1 1
,5) Explain |in |your |own |words |why |accountability |is |the |cornerstone |of |all |financial
|reporting |in |government.
6) In |your |own |words |state |the |primary |needs |the |GASB |believes |external |users |have |for
|financial |reports |of |state |and |local |governments. |For |contrast, |state |the |uses |the |FASB |believes
|external |users |have |for |the |financial |reports |of |not-for-profit |organizations.
7) Describe |the |difference |between |a |comprehensive |annual |financial |report |(CAFR) |and
|GASB |general |purpose |external |financial |reporting |for |state |and |local |governments.
8) Identify |and |briefly |explain |the |four |sections |of |the |performance |and |accountability |report
|(PAR) |that |the |Office |of |Management |and |Budget |requires |major |federal |departments |and
|agencies |to |prepare.
Version |1 2
,9) Explain |the |concepts |of |fiscal |and |operational |accountability |and |the |basis |of |accounting
|used |to |capture |each |concept.
10) Describe |the |comprehensive |annual |financial |report |(CAFR). |What |are |the |sections |of |the
|report |and |which |components |of |the |organization |should |it |include? |Is |a |CAFR |required?
11) 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.
Version |1 3
, 12) Which |of |the |following |bodies |has |been |established |to |recommend |accounting |and
|financial |reporting |standards |for |the |federal |government?
A) Financial |Accounting |Standards |Board |(FASB).
B) Governmental |Accounting |Standards |Board |(GASB).
C) Federal |Accounting |Foundation |(FAF).
D) Federal |Accounting |Standards |Advisory |Board |(FASAB).
13) The |Financial |Accounting |Standards |Board |has |the |responsibility |for |setting |accounting
|and |financial |reporting |standards |for |which |of |the |following?
A) All |not-for-profit |organizations |that |are |nongovernmental |and |business |entities.
B) All |not-for-profit |organizations |and |business |entities.
C) All |not-for-profit |organizations.
D) Special |purpose |governments |with |a |business |purpose.
14) 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.
15) 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.
Version |1 4
