(Test Bank) Essentials of Accounting for Governmental and Not-for-Profit Organizations

Copley, 14

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14th Edition

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Test Bank for Essentials of Accounting for Governmental and Not-for-Profit Organizations, The downloadable file consists of 697 pages, and the total size of the file is 3.17 MB. Purchase now only for highly discounted price.

Author(s): Copley

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Version 1 1 Chapter 1_ Introduction to Accounting and Financial Reporting for Governmental TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) The Governmental Accounting Standards Board sets financial reporting standards for all units of government: federal, state, and local. ⊚ true ⊚ false 2) Fund accounting exists primarily to provide assurance that resources are used accordin g to legal or donor restrictions. ⊚ true ⊚ false 3) The Financial Accounting Standards Board sets financial reporting standards for profit - seeking businesses and nongovernmental, not -for-profit organizations. ⊚ true ⊚ false 4) FASAB, GASB and FASB standards are set forth primarily in documents called statements. ⊚ true ⊚ false 5) FASAB, GASB and FASB standards are set forth primarily in documents called concept statements. ⊚ true ⊚ false 6) The FASAB was established to recommend accounting and financial reporting standards for the federal government. ⊚ true ⊚ false Version 1 2 7) The GASB does not require supplementary information to be reported with its financ ial statements even if it is essential to establish appropriate context for the financial statements and notes. ⊚ true ⊚ false 8) The Financial Accounting Standards Board sets financial reporting standards for private not-for-profits a nd investor -owned businesses. ⊚ true ⊚ false 9) An organization is presumed to be governmental if it has the ability to issue directly debt that is exempt from federal taxes. ⊚ true ⊚ false 10) The Financial Accounting Standards Board and the Governmental Accounting Standards Board are parallel bodies under the oversight of the Financial Accounting Foundation. ⊚ true ⊚ false 11) The Federal Accounting Standards Advisory Board req uires less extensive reports than does the FASB or GASB. ⊚ true ⊚ false 12) The FASAB requires more financial statements than are typically required of state and local governments.Version 1 3 ⊚ true ⊚ false 13) The only objec tive of the Governmental Accounting Standards Board is to help users determine compliance with finance -related laws, rules, and regulations. ⊚ true ⊚ false 14) Governments must have as many funds as necessary to fulfill legal requireme nts and sound financial administration but must have at a minimum a General Fund. ⊚ true ⊚ false 15) A Management's Discussion and Analysis is required for state and local governmental units, and the federal government. ⊚ true ⊚ false 16) 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. ⊚ true ⊚ false 17) Although certain supplementary information may not be required, if presented, it must follow GASB guidance regarding its format and content. ⊚ true ⊚ false Version 1 4 18) The GASB Concept Statement on Service Efforts and Accomplishments Repor ting requires state and local governments to include inputs of nonmonetary resources in their financial reporting. ⊚ true ⊚ false 19) The format and content of supplementary information which is not required by GASB is up to the discre tion of the reporting entity. ⊚ true ⊚ false 20) GASB and FASB Concept Statements establish accounting standards that must be complied with to receive an unqualified audit opinion. ⊚ true ⊚ false 21) FASAB, GASB and FASB standards are set forth primarily in documents called interpretations. ⊚ true ⊚ false 22) Fund -basis statements are presented for three categories of government activities: governmental, proprietary, and fiduciary. ⊚ true ⊚ false 23) State and local governments may use as many as twelve different fund types. ⊚ true ⊚ false Version 1 5 24) The economic resource measurement focus and accrual basis is an important feature of government -wide financial statements. ⊚ true ⊚ false 25) Businesslike activity fund -basis statements must be changed to the accrual basis from the modified accrual basis when preparing government -wide financial statements. ⊚ true ⊚ false 26) Governmental -type activity fund -basis statements must use accrual basis when preparing government -wide financial statements. ⊚ true ⊚ false 27) Fiduciary funds of a governmental unit use the current financia l resources measurement focus and modified accrual basis of accounting. ⊚ true ⊚ false 28) Under the accrual basis of accounting, revenues are recognized when measurable and available to finance expenditures of the current period. ⊚ true ⊚ false 29) 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. ⊚ true ⊚ false Version 1 6 30) General fixed assets of the government are reported both in the government -wide financial statements and the governmental fund financial statements. ⊚ true ⊚ false 31) Comparison of the legally approved budget with actual results of the General Fund is not part of required supplementary information in the CAFR. ⊚ true ⊚ false 32) Comparison of the legally approved budget with actual results of the General Fund is included as part of required supplementary information in the CAFR. ⊚ true ⊚ false 33) Long -term debt associated with governmental activities (i.e. that is to be paid with tax revenues) is reported in the government -wide statements but not in the governmental fund statements ⊚ true ⊚ false 34) Measurement focus refers to those items, such as current and long -term assets, that are being reported on the financial statements. ⊚ true ⊚ false 35) Infrastructure is capitalized in the fund -basis statements of state and local governmental units.Version 1 7 ⊚ true ⊚ false 36) Fiduciary funds include custodial, pension trust, investment trust, and permanent funds. ⊚ true ⊚ false 37) The Financial Accounting Standards Board has authority to establish accounting and financial reporting standards for both private and state universities. ⊚ true ⊚ false 38) FASB sets the reporting standards for private not -for-for profits. ⊚ true ⊚ false 39) Internal Service funds are treated as governmental activities in the government -wide statements if the principal customers are other departments within the General Fund. ⊚ true ⊚ false 40) Perma nent funds can be either a governmental fund or a fiduciary fund where only income on donated assets may be spent. ⊚ true ⊚ false 41) Depreciation on capital assets is included as an expense in the Statement of Activities in the govern mental fund -basis statements. ⊚ true ⊚ false Version 1 8 42) Depreciation on capital assets is included as an expense in the Statement of Revenues, Expenses, and Changes in Fund Net Position in the proprietary fund financial statements. ⊚ true ⊚ false 43) Depreciation on capital assets is not included as an expense in the Statement of Revenues, Expenses, and Changes in Fund Net Position in the proprietary fund financial statements. ⊚ true ⊚ false 44) According to GASB standards relating to Budgetary Accounting, an annual budget should be adopted by every governmental unit. ⊚ true ⊚ false 45) According to GASB standards relating to Budgetary Accounting, budgetary comparisons should be included in the appropriate financial statements or schedules for governmental funds for which an annual budget has been adopted. ⊚ true ⊚ false 46) According to GASB standards relating to Budgetary Accounting, budgetary comparisons are required for all funds, even those for which an annual budget has not been adopted. ⊚ true ⊚ false 47) According to FASB standards relating to Budgetary Accounting, the accounting system should provide the basis for appropriate bu dgetary control.Version 1 9 ⊚ true ⊚ false 48) For most state and local governments, the budget, when adopted according to procedures specified by state laws, is not binding upon the administrators of a governmental unit. ⊚ true ⊚ false 49) A fund represents part of the activities of an organization which is separated from other activities in the accounting records to more easily demonstrate compliance with legal restrictions or limitations. ⊚ true ⊚ false 50) A government may have two or more General Funds. ⊚ true ⊚ false 51) The GASB published a white paper which identifies five environmental differences between governments and for -profit enterprises. ⊚ true ⊚ false 52) The FASB sets accounting and financial reporting standards for governmentally related not-for-profit organizations, such as colleges and universities, health care entities, museums, libraries, and performing arts organizations that are owned or controlled by governments. ⊚ true ⊚ false Version 1 10 53) Accounting and financial reporting standards for profit -seeking businesses and for nongovernmental not -for-profit organizations are set by the Financial Accounting Standards Board. ⊚ true ⊚ false 54) The Financial Accounting Foundation (FAF) has oversight over the GASB but not the FASB. ⊚ true ⊚ false 55) The information needs of government creditors are vastly different from their counterparts in the corporate world which necessitates different accounting rules. ⊚ true ⊚ false 56) GASB utilizes two additional elements that do not appear in the balance sheets of nongovernmental organizations: deferred inflows and deferred outflows of resources. ⊚ true ⊚ false 57) The GASB and the FASB are parallel bodies under the oversight of the Financial Accounting Foundation (FAF). ⊚ true ⊚ false MULTIPLE CHOICE - Choose the one altern ative that best completes the statement or answers the question. 58) Governmental funds include:Version 1 11 A) Special revenue funds. B) Internal service funds. C) Enterprise funds. D) Custodial funds. 59) Which of the following has established a "Hierarchy of GAAP": A) Financial Accounting Standards Board. B) Federal Accounting Standards Advisory Board. C) Governmental Accounting Standards Board. D) All of the choices have established a hierarchy. 60) The term "proprietary funds" applies to: A) all funds that use accrual accounting. B) enterprise and internal service funds only. C) enterprise, internal service, and private -purpose trust funds. D) none of the choices are correct. 61) The term "fiduciary funds" applies to: A) enterprise and internal service funds. B) private -purpose trust, investment trust, pension trust and custodial funds. C) pension, investment trust and enterprise funds. D) enterprise, internal service, and private -purpose trust funds. 62) The GASB sets accounting standards for all of the following except:Version 1 12 A) State and local governments. B) Component units owned or contro lled by governments. C) Governmentally related not -for-profit universities. D) Nongovernmental not -for-profit hospital. 63) Which of the following fund types is present in every general -purpose government? A) Permanent B) Special revenue C) General D) Capital projects 64) Which of the following is a proprietary fund? A) Internal service B) Investment trust C) Permanent D) Special revenue 65) Which of the follow ing is not a fiduciary fund? A) Private -purpose trust B) Custodial C) Pension trust D) Permanent 66) Which of the following is a governmental fund?Version 1 13 A) Internal service B) Custodial C) Enterprise D) Special revenue 67) Which of the following is not one of the objectives of Federal Financial Reporting, as outlined in SFFAC 1, which was issued by the FASAB? A) Financial reporting should enable evaluation of the success rate of programs. B) Financial reporting should enable evaluation of the service efforts, costs and accomplishments of the reporting entity. C) Financial reporting should reveal whether financial systems and controls are adequate. D) Financial reporting should demonstrate accountability with regard to raising and expending money. 68) The FASAB has the authority to establish accounting and financial reporting standards for: A) State and local governments. B) Investor owned business. C) Federal government agencies. D) Public not -for-profits. 69) The FASB has the authority to establish accounting and financial reporting standards for: A) Federal government. B) Private not -for-profits. C) Public not -for-profits. D) State and local governments. Version 1 14 70) The GASB has the authority to establish accounting and financial reporting standards for: A) State governments. B) Private not-for-profits. C) Federal government. D) None of the choices are correct. 71) In order for a fund to exist, there must be: A) A fiscal entity; assets set aside for a specific purpose. B) A double -entry accounting entity. C) Both are optional and not required D) Both options are required 72) Which fund category must change from modified accrual to accrual basis when preparing government -wide financial statements? A) Govern mental B) Proprietary C) Fiduciary D) Governmental & Proprietary only 73) Which of the following use the current financial resources measurement focus? A) Fiduciary fund statements B) Governmental fund statements C) Proprietary fund statements D) Internal Service fund statements 74) Which of the following best describes how many funds a government should use?Version 1 15 A) One for each revenue source B) Two at a minimum; the General Fund and one enterprise fund C) As many as necessary to fulfill legal requirements and sound financial administration D) None of the choices are correct 75) Which of the following would not be included in FASB Statement of Financial Accoun ting Concepts #4, which identifies the information needs of the users of non -business financial statements? A) Assessing services provided by a non -business organization and its ability to continue to provide those services B) Format and co ntent of financial statements C) Assessing managements ’ stewardship and performance D) Evaluation of an organization ’s economic resources, obligations, and effects of changes in those net resources 76) The Governmental Accounting Stan dards Board has been given authority to establish accounting and financial reporting standards for: A) all governmental units and agencies. B) federal, state, and local governments and governmentally related utilities, authorities, hospital s, and colleges and universities. C) state and local governmental entities, and governmentally related utilities, authorities, hospitals, and colleges and universities. D) all governmental units and all not -for-profit organizations. 77) Which of the following characteristics would not define an organization as governmental?