Test bank for essentials of accounting for governmental and not for profit organizations 11th edition

Cdebt service funds of governmental fund financial statements and government-wide financial statements.. Dgovernmental, proprietary, and fiduciary fund financial statements but not in th

Test Bank for Essentials of Accounting for Governmental and Not for Profit Organizations 11th Edition

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

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 efforts and accomplishments reporting

4 D)None of the above, all are true

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 includepredictions 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

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 fund financial statements

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

statements

4 D)are to be reported but not depreciated in government-wide and fund financial statements.

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

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

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

A city government makes its semiannual payment of interest on revenue bonds issued to pay for the construction of additional public transit stations Which fund would account for the payment?

1 A)Debt service fund

2 B)Capital projects fund

3 C)Enterprise fund

4 D)Internal service fund

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

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

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

Which of the following is not a fiduciary fund type?

1 A)Governmental Accounting Standards Board

2 B)Financial Accounting Standards Board

3 C)Hospital Financial Management Association

4 D)American Institute of Certified Public Accountants

Which of the following is true regarding fund classifications?

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

Notre Dame University, a private institution, has level “A” GAAP established

by the:

1 A)American Institute of Certified Public Accountants

2 B)Governmental Accounting Standards Board

3 C)Financial Accounting Standards Board

4 D)National Association of College and University Business Officers

Long-term debt paid from proprietary funds is reported as a liability in

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

Which of the following are the governmental funds?

1 A)General, special revenue, debt service, capital projects, permanent

2 B)General, special revenue, debt service, capital projects, private purpose

3 C)General, special revenue, debt service, capital projects, internal service

4 D)None of the above

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

Which of the following funds is considered a Fiduciary Fund?

1 A) Debt Service Fund

2 B) Enterprise Fund

3 C) Internal Service Fund

4 D) Pension Trust Fund

Which of the following statement(s) are not included in the proprietary funds:

1 A) Statement of Revenues, Expenses, and Changes in Net Assets

2 B) Statement of Cash Flows

3 C) Statement of Net Assets

4 D) All of the above are included

Capitalized fixed assets are reported in which of the following fund-basis statements?

1 A) Agency fund

2 B) Proprietary fund

3 C) Governmental fund

4 D) All of the above

Which of the following fund types uses modified accrual accounting?

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 and its citizenry

Which of the following funds is not a Fiduciary Fund?

1 A) Private Purpose Trust Fund

2 B) Permanent Fund

3 C) Pension Fund

4 D) Investment Trust Fund

The _ sets the accounting and financial reporting standards for both state and local governments and public not-for-profits

1 A) comprehensive annual financial report

2 B) governmental annual financial report

3 C) independent auditor’s report

4 D) complete audited financial report

State and local governmental funds are organized into three categories including:

1 A) governmental, proprietary, and restricted

2 B) proprietary, fiduciary, and restricted

3 C) governmental, fiduciary, and restricted

4 D) governmental, proprietary, and fiduciary

The Fund accounts for all resources other than those required to be accounted for in other funds

The Funds are used to account for situations in which the government is acting as a collecting/disbursing agent

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 and its 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 and service charges to parties external to the government

Which of the following is an environmental difference between governments and for-profit business enterprises?

1 A) Relationship with stakeholders

2 B) Donor restricted assets

3 C) The number will vary depending on the needs of the government

4 D) None of the above

The Financial Accounting Standards Board (FASB) is the standard setting organization for which of the following reporting organizations?

1 A) Private not-for-profits

2 B) Public not-for-profits

3 C) Investor owned businesses

4 D) A and C are both correct

The fund basis statements for governmental funds are presented using the

1 A) Economic Resources Measurement focus and the Accrual Basis of

Accounting

2 B) Current Financial Resources Measurement focus and the Accrual Basis of Accounting

3 C) Current Financial Resources Measurement focus and the Modified Accrual Basis of accounting

4 D) Economic Resources Measurement focus and the Modified Accrual Basis of Accounting

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

3 C) Agency Funds

4 D) Enterprise Funds

Financial reports for state and local governments are well suited for all the following EXCEPT?

1 A) Assessing financial condition and results of operations

2 B) Measuring the effectiveness of government services such as police and fireprotection

3 C) Comparing actual results with the legally adopted budget

4 D) Assisting in determining compliance with finance-related laws and

regulations

Which of the following funds is used to account for the payment of principal and interest of general long term debt of a government?

1 A) Capital Projects Fund

2 B) Internal Service Fund

3 C) Agency Fund

4 D) None of the above

The GASB is under the oversight of:

1 A) GAO

2 B) FASAB

3 C) FAF

4 D) FASB

The Governmental Accounting Standards Board sets financial reporting

standards for all units of government: federal, state, and local

1 True

2 False

FASAB, GASB and FASB standards are set forth primarily in documents called statements

The GASB requires supplementary information to be reported with its

financial statements if it is essential to establish appropriate context for the financial statements and notes

The Financial Accounting Standards Board and the Governmental Accounting Standards Board are parallel bodies under the oversight of the Financial Accounting Foundation

Governments must have as many funds as necessary to fulfill legal

requirements and sound financial administration but must have at a minimum

a General Fund

1 True

2 False

The Governmental Accounting Standards Board considers the financial

reporting entity to include the primary government and its component

units

1 True

2 False

A Management's Discussion and Analysis is required for state and local

governmental units, but not the federal government

1 True

2 False

The GASB Concept Statement on Service Efforts and Accomplishments

Reporting encourages state and local governments to include inputs of

nonmonetary resources in their financial reporting

1 True

2 False

The GASB Concept Statement on Service Efforts and Accomplishments

Reporting requires state and local governments to include inputs of

nonmonetary resources in their financial reporting

1 True

2 False

Although certain supplementary information may not be required, if

presented, it must follow GASB guidance regarding its format and

content

1 True

2 False

The format and content of supplementary information which is not required

by GASB is up to the discretion of the reporting entity

1 True

2 False

GASB and FASB Concept Statements establish accounting standards that must

be complied with to receive an unqualified audit opinion

2 False

State and local governments may use eleven different fund types

1 True

2 False

The economic resource measurement focus and accrual basis of measurement

is an important feature of government-wide financial statements

1 True

2 False

Business activities fund statements must be changed to the accrual basis from the modified accrual basis when preparing government-wide financial statements

The government-wide statements and the fund statements for proprietary funds and fiduciary funds use the economic resources measurement focus and the accrual basis of accounting

1 True

2 False

Under the accrual basis of accounting, revenues are recognized when

measurable and available to finance expenditures of the current period

The Financial Accounting Standards Board has authority to establish

accounting and financial reporting standards for both private and state universities

1 True

2 False

FASB sets the reporting standards for private and public not-for-for

profits

1 True

2 False

Internal Service funds are treated as governmental activities in the

government-wide statements if the principal customers are other

departments within the General Fund

1 True

2 False

The Governmental Accounting Standards Board sets financial reporting

standards for all units of government: federal, state, and local

1 True

2 False

FASAB, GASB and FASB standards are set forth primarily in documents called statements

The GASB requires supplementary information to be reported with its

financial statements if it is essential to establish appropriate context for the financial statements and notes

The Financial Accounting Standards Board and the Governmental Accounting Standards Board are parallel bodies under the oversight of the Financial Accounting Foundation

Governments must have as many funds as necessary to fulfill legal

requirements and sound financial administration but must have at a minimum

a General Fund

1 True

2 False

The Governmental Accounting Standards Board considers the financial

reporting entity to include the primary government and its component

units

1 True

2 False

A Management's Discussion and Analysis is required for state and local

governmental units, but not the federal government

1 True

2 False

The GASB Concept Statement on Service Efforts and Accomplishments

Reporting encourages state and local governments to include inputs of

nonmonetary resources in their financial reporting

1 True

2 False

The GASB Concept Statement on Service Efforts and Accomplishments

Reporting requires state and local governments to include inputs of

nonmonetary resources in their financial reporting

1 True

2 False

Although certain supplementary information may not be required, if

presented, it must follow GASB guidance regarding its format and

content

1 True

2 False

The format and content of supplementary information which is not required

by GASB is up to the discretion of the reporting entity

1 True

2 False

GASB and FASB Concept Statements establish accounting standards that must

be complied with to receive an unqualified audit opinion