79 test bank for essentials of accounting for governmental and not for profit organizations 10th

D Financial reporting should demonstrate accountability regarding raising and expending money according to budgetary process and laws and regulations Which of the following organizations

79 Test Bank for Essentials of Accounting for

Governmental and Not for Profit Organizations 10th Edition by Copley

Multiple Choice Questions

GASB standards contain all of the following in its three-part

budgetary principle except:

1. A) An annual budget should be adopted by every governmental unit

2. B) The accounting system should provide the basis for appropriate

budgetary control

3. C) Budgetary comparisons should be included in the appropriate financial statement and schedules for governmental funds for which an annual budgethas been adopted

4. D) None of the above; all would be included

A government may have multiple funds for each of the following fund types except:

1. A) The power to enact and enforce a tax levy

2. B) The potential for unilateral dissolution by a government with the net assets reverting to a government

3. C) The receipt of grant money from a state or local government for the purpose of providing services to the public

4. D) Both A and B

Which of the following is not one of the objectives of Federal

Financial Reporting, as outlined in SAFAC 1, which was issued by the FASAB?

1. A) Financial reporting should enable evaluation of the service efforts, costs and accomplishments of the reporting entity

2. B) Financial reporting should enable evaluation of the success rate of programs

3. C) Financial reporting should reveal whether financial systems and controlsare adequate

4. D) Financial reporting should demonstrate accountability regarding raising and expending money according to budgetary process and laws and

regulations

Which of the following organizations has authority to establish accounting and financial reporting standards for the federal

government?

1. A) Federal Accounting Standards Advisory Board

2. B) Office of Management and Budget

3. C) Governmental Accounting Standards Board

4. D) None of the above; no one has been granted authority to set standards for the federal government

The term “proprietary funds” applies to:

1. A) enterprise and internal service funds

2. B) pension, investment trust and enterprise funds

3. C) enterprise, internal service, and private-purpose trust funds

4. D) none of the above answers are correct

Which of the following is most correct with regard to

Management's Discussion and Analysis (MD&A)?

1. A) State and local governments are required to provide an MD&A

2. B) Federal agency financial reports are required to provide an MD&A.

3. C) Both state and local governments and federal agencies are encouraged,but not required to provide an MD&A

4. D) Both state and local governments and federal agencies are required to provide an MD&A

The FASB has the authority to establish accounting and financial reporting standards for:

1. A) Federal government

2. B) Private not-for-profits

3. C) Public not-for-profits

4. D) State and local governments

The Governmental Accounting Standards Board has been given authority to establish accounting and financial reporting standards for:

1. A) all governmental units and agencies

2. B) federal, state, and local governments

3. C) all governmental units and all not-for-profit organizations

4. D) state and local governmental entities, and governmentally-owned

utilities, authorities, hospitals, and colleges and universities

In order for a fund to exist, there must be:

1. A) A fiscal entity; assets set aside for a specific purpose

2. B) A double-entry accounting entity

3. C) Both A & B are required

4. D) A & B are optional and not required

The term “proprietary funds” applies to:

1. A) enterprise funds only

2. B) all funds that use accrual accounting.

3. C) enterprise, internal service, and private-purpose trust funds

4. D) none of the above answers are correct

Governmental funds do not include:

1. A) Special revenue funds

2. B) Internal service funds

3. C) Debt service funds

4. D) The General fund

GASB Concepts Statement No 3, Communication Methods in General Purpose External Financial Reports that Contain Basic Financial Statements, states that

1. A) notes to the financial statements may include management’s objective explanations

2. B) required supplementary information must be objective and may not include predictions or subjective assessments

3. C) disclosure in the notes is not an adequate substitute for recognition in the financial statements

4. D) All of the above are correct

The “Hierarchy of GAAP” is established by the:

1. A) Financial Accounting Standards Board

2. B) Federal Accounting Standards Advisory Board

3. C) Governmental Accounting Standards Board

4. D) All of the above have established a hierarchy

Which fund category must change from modified accrual to accrual basis when preparing government-wide financial

statements?

1. A) Governmental

1. A) One; the General Fund

2. B) Two; the General Fund and one permanent fund

3. C) As many as necessary to fulfill legal requirements and sound financial administration

4. D) A & C

Fiduciary funds are to use the:

1. A) economic resources measurement focus and accrual basis of

4. D) none of the above, the fiduciary funds have no revenues

Long-term debt of a governmental unit would be reported in the:

1. A) government-wide financial statements and proprietary fund financial statements

2. B) government-wide financial statements only.

3. C) debt service funds of governmental fund financial statements and

government-wide financial statements

4. D) notes to the financial statements only

The FASAB has the authority to establish accounting and

financial reporting standards for:

1. A) Federal government

2. B) Investor owned business

3. C) State and local governments

1. A) Fiduciary fund statements

2. B) Governmental fund statements

3. C) Proprietary fund statements

4. D) Enterprise fund statements

The GASB has the authority to establish accounting and financial reporting standards for:

1. A) Federal government

2. B) Private not-for-profits

3. C) State and local governments

4. D) None of the above

Which of the following is not true regarding GASB Concepts

Statement No 2, Service Efforts and Accomplishments

Reporting:

1. A) It encourages governments to experiment with reporting more complete information about an entity's performance than can be displayed in the traditional financial statements

2. B) It outlines categories of information that might be reported

3. C) It prescribes detailed standards governing the reporting of service effortsand accomplishments reporting

4. D) None of the above, all are true

Level “A” GAAP for The University of Virginia, a public institution, would be established by the:

1. A) Financial Accounting Standards Board

2. B) Governmental Accounting Standards Board

3. C) American Institute of Certified Public Accountants

4. D) National Association of College and University Business Officers

The GASB sets accounting standards for all of the following

except:

1. A) State and local governments

2. B) Libraries owned or controlled by governments

3. C) Governmentally related not-for-profit universities

4. D) Nongovernmental not-for-profit hospital

Governmental funds are to use the:

1. A) economic resources measurement focus and accrual basis of

accounting

2. B) current financial resources measurement focus and accrual basis of accounting.

3. C) economic resources measurement focus and modified accrual basis of accounting

4. D) current financial resources measurement focus and modified accrual basis of accounting

A city government collects local option sales taxes legally

restricted to pay for the hiring of teachers for hearing impaired school children Which fund should account for the receipt of the sales taxes?

1. A) Special revenue fund

2. B) Capital projects fund

3. C) Private-purpose trust fund

4. D) General fund

Which of the following would not be included in FASB Statement

of Financial Accounting Concepts #4, which identifies the

information needs of the users of non-business financial

statements?

1. A) Format and content of financial statements

2. B) Assessing services provided by a non-business organization and its ability to continue to provide those services

3. C) Assessing managements’ stewardship and performance

4. D) Evaluation of an organization’s resources, obligations and effects of changes in net resources

Which of the following is a governmental fund?

1. A) Special revenue

2. B) Enterprise

4. D) Internal service

Proprietary funds use the:

1. A) economic resources measurement focus and modified accrual basis of accounting

2. B) current financial resources measurement focus and modified accrual basis of accounting

3. C) economic resources measurement focus and accrual basis of

1. A) Debt service fund

2. B) Capital projects fund

3. C) Enterprise fund

4. D) Internal service fund

Governmental funds include:

1. A) Special revenue funds

2. B) Internal service funds

3. C) Debt service funds

4. D) A and C

Government-wide statements use the:

1. A) current financial resources measurement focus and accrual basis of accounting

2. B) economic resources measurement focus and accrual basis of

accounting

3. C) economic resources measurement focus and modified accrual basis of accounting.

4. D) none of the above, the fiduciary funds have no revenues

A city government collects local option sales taxes legally

restricted to pay for the construction of a new courthouse Which fund should account for the receipt of the sales taxes?

1. A) Special revenue fund

2. B) Capital projects fund

3. C) Private-purpose trust fund

4. D) General fund

Under the modified accrual basis of accounting, revenues should

be recognized when they are:

1. A) authorized by the budget ordinance

2. B) earned and measurable

3. C) measurable and available to finance expenditures of the current period

4. D) realized through collection

In order for a fund to exist, there must be

1. A) assets set aside for specific purposes

2. B) a separate revenue stream

3. C) a double-entry accounting entity

4. D) A and C are correct

Under GASB Statement 34, capital assets:

1. A) must be reported in government-wide statements but are not reported in any of the fund financial statements

2. B) must be reported in government-wide statements and in proprietary fundfinancial statements

3. C) are not to be reported in either government-wide or fund financial

1. A) The power to enact and enforce a tax levy

2. B) The potential for unilateral dissolution by a government with the net assets reverting to a government

3. C) The receipt of grant money from a state or local government for the purpose of providing services to the public

4. D) All of the above

79 Free Test Bank for Essentials of Accounting for Governmental and Not for Profit Organizations 10th Edition by Copley Multiple Choice Questions - Page 2

A permanent fund classified under governmental funds…

1. A) Accounts for most of the basic services provided by the governmental unit

2. B) Accounts for financial resources intended for major capital projects

3. C) Accounts for services provided by one department of a government to another

4. D) Accounts for resources that are legally restricted so only earnings, not principal, may be expended, and for purposes to benefit the government andits citizenry

A government may have General Fund(s)

4. D) None of the above.

Which of the following fund types uses modified accrual accounting?

1. A) the proprietary fund Statement of Net Assets

2. B) the government-wide Statement of Net Assets

3. C) both A and B

4. D) neither A nor B

The _ is the government’s official annual report prepared and published as a matter of public record

1. A) comprehensive annual financial report

2. B) governmental annual financial report

3. C) independent auditor’s report

4. D) complete audited financial report

Under GASB Statement 34, modified accrual accounting would

be found in the:

1. A) government-wide financial statements only

2. B) governmental fund financial statements only

3. C) governmental and fiduciary fund financial statements only

4. D) governmental, proprietary, and fiduciary fund financial statements but not in the government-wide financial statements

The Fund accounts for and reports the proceeds of

specific revenue sources that are restricted or committed to

expenditure for specified purpose other than debt service or

What are Enterprise funds used for?

1. A) To account for pension and employee benefit funds for which the

governmental unit is the trustee

2. B) To report resources that are legally restricted so only earnings, not principal, may be expended, and for purposes to benefit the government andits citizenry

3. C) To account for most of the basic services provided by the governmental units.

4. D) To account for resources provided primarily through the use of sales andservice charges to parties external to the government

What type of fund is used when resources are provided mainly through business like transactions to parties external to the

government?

1. A) Internal Service Funds

2. B) Capital Projects Funds

4. D) Enterprise Funds

A city government sells police cars no longer in use No

restrictions have been placed on the proceeds Which fund

should account for the receipt?

1. A) Debt service fund

2. B) Capital projects fund

3. C) Enterprise fund

4. D) General fund

The _ sets the accounting and financial reporting

standards for both state and local governments and public profits

3. C) GASB

Why did governmental accounting practices develop with a focus

on the sources and uses of expendable funds rather than on net income?

1. A) The government wants to keep the earnings discrete

2. B) Net income is solely for private organizations

3. C) Tax and other non exchange revenues are not equivalent to sales

4. D) Net income is solely for public organizations

Capitalized fixed assets are reported in which financial

statement?

1. A) Agency fund

2. B) Proprietary fund

3. C) Governmental fund

4. D) All of the above

Which of the following funds is not a Fiduciary Fund?

1. A) Private Purpose Trust Fund

2. B) Special Revenue Fund

4. D) Investment Trust Fund

What basis of accounting would the Enterprise Fund use?

1. A) Governmental funds include the General, special revenue, debt service, capital projects, and permanent.

2. B) Proprietary funds include enterprise, internal service, and

private-purpose

3. C) Both of the above

4. D) None of the above

Under GASB Statement 34, accrual accounting is used for:

1. A) government-wide financial statements only

2. B) government-wide financial statements and proprietary fund financial statements only

3. C) government-wide, proprietary fund, and fiduciary fund financial

statements only

4. D) government-wide and all fund financial statements

Which of the following is an objective of federal financial

reporting?

1. A) Budgetary Integrity

2. B) Operating Performance

3. C) Stewardship

4. D) All of the above

The GASB is under the oversight of: