Question 1

The Governmental Accounting Standards Board sets financial reporting standards for all units of government:
 federal,state,and local.

Accepted Answer

The GASB sets standards for state and local governments but not the federal government. GASB also sets standards for governmentally related not-for-profit organizations, health care entities, museums, libraries, and performing arts organization owned or controlled by governments.

Question 2

One objective of the Governmental Accounting Standards Board is to help users determine compliance with finance-related laws,rules,and regulations.

Accepted Answer

One of the objectives of the Governmental Accounting Standards Board is to provide guidance for financial reporting that helps users determine compliance with finance-related laws, rules, and regulations. This is stated in their mission statement on their website.

Question 3

The format and content of supplementary information which is not required by GASB is up to the discretion of the reporting entity

Accepted Answer

GASB Concepts Statement #3 defines methods of presenting information in financial reports including supplementary information that is not required by GASB.

Question 4

The FASAB was established to recommend accounting and financial reporting standards for governmental and nonprofit enterprises.

Accepted Answer

The FASAB (Federal Accounting Standards Advisory Board) was established to recommend accounting and financial reporting standards specifically for the United States federal government, not for governmental and nonprofit enterprises in general.

Question 5

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.

Accepted Answer

This statement is correct per GASB Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments.

Question 6

The Financial Accounting Standards Board sets financial reporting standards for private sector organizations,except nongovernmental,not-for-profit organizations.

Accepted Answer

The Financial Accounting Standards Board (FASB) sets financial reporting standards for both private sector organizations and nongovernmental, not-for-profit organizations.

Question 7

The Financial Accounting Standards Board sets financial reporting standards for private not-for-profits and investor-owned businesses.

Accepted Answer

Accounting and financial reporting standards for profit-seeking businesses and for nongovernmental not-for-profit organizations are set by the FASB.

Question 8

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.

Accepted Answer

The General Fund is a basic and essential fund for government operations, and while governments may have other funds for specific purposes, having a General Fund is crucial for meeting legal requirements and maintaining good financial management.

Question 9

The Federal Accounting Standards Advisory Board requires less extensive reports than does the FASB or GASB.

Accepted Answer

FASAB requires more financial statements than are typically required of state and local governments, public and private not-for-profits and investor-owned businesses.

Question 10

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.

Accepted Answer

Occasionally the GASB determines that additional information is necessary to provide context and understanding of information in the statements or notes. In such cases, the GASB requires the presentation of required supplementary information RSI

Question 11

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

Accepted Answer

Statements are the primary documents used by FASAB, GASB, and FASB to set forth their accounting standards.

Question 12

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

Accepted Answer

Standards are set forth in documents called "Statements", not concept statements.

Question 13

Although certain supplementary information may not be required,if presented,it must follow GASB guidance regarding its format and content.

Accepted Answer

The statement is true. If supplementary information is presented, it must follow GASB guidance regarding its format and content, even if it is not required. This ensures consistency and comparability in financial reporting.

Question 14

An organization is presumed to be governmental if it has the ability to issue directly debt that is exempt from federal taxes.

Accepted Answer

According to the Internal Revenue Service (IRS), an organization is considered governmental if it has the authority to issue directly tax-exempt bonds.

Question 15

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

Accepted Answer

This statement is correct. The Financial Accounting Standards Board and the Governmental Accounting Standards Board are both standard-setting bodies for accounting, and they both fall under the umbrella of the Financial Accounting Foundation.

Question 16

The FASAB requires more financial statements than are typically required of state and local governments.

Accepted Answer

The Federal Accounting Standards Advisory Board (FASAB) has established accounting standards for the U.S. federal government that require more financial statements than those typically required of state and local governments.

Question 17

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.

Accepted Answer

The statement encourages state and local governments to expand their financial reporting to include inputs of nonmonetary resources.

Question 18

Fund accounting exists primarily to provide assurance that resources are used according to legal or donor restrictions.

Accepted Answer

Fund accounting is designed to track and report on funds that have legal or donor restrictions, ensuring that the resources are used appropriately and in compliance with those restrictions. Fund accounting provides transparency and accountability in financial reporting for nonprofit organizations, government agencies, and other entities with dedicated funds that need to be separately accounted for.

Question 19

A Management's Discussion and Analysis is required for state and local governmental units,but not the federal government.

Accepted Answer

A Management's Discussion and Analysis (MD&A) is also required for the federal government, as mandated by the Chief Financial Officers Act of 1990.

Question 20

The Governmental Accounting Standards Board considers the financial reporting entity to include the primary government and its component units.

Accepted Answer

The Governmental Accounting Standards Board does indeed consider the financial reporting entity to include the primary government and its component units.

Quiz 1: Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

The Governmental Accounting Standards Board sets financial reporting standards for all units of government: federal,state,and local.