Question 1

Under GASB Statement 34,capital assets:
A) must be reported in government-wide statements but are not reported in any of the fund financial statements.
B) must be reported in government-wide statements and in proprietary fund financial statements.
C) are not to be reported in either government-wide or fund financial statements.
D) are to be reported but not depreciated in government-wide and fund financial statements.

Accepted Answer

Under GASB Statement 34, capital assets must be reported in the government-wide statements and in proprietary fund financial statements. This includes reporting the assets at historical cost and depreciating them over their useful lives. Capital assets are not reported in any of the fund financial statements because those statements are focused on current financial resources and liabilities.

Question 2

Long-term debt of a governmental unit would be reported in the:
A) government-wide financial statements and proprietary fund financial statements.
B) government-wide financial statements only.
C) debt service funds of governmental fund financial statements and government-wide financial statements.
D) notes to the financial statements only.

Accepted Answer

Long-term debt of a governmental unit would be reported in the government-wide financial statements and proprietary fund financial statements as they provide information on the entity as a whole, including all long-term debt regardless of the type of fund in which it was issued.

Question 3

In order for a fund to exist,there must be
A) assets set aside for specific purposes.
B) a separate revenue stream.
C) a double-entry accounting entity.
D) A and C are correct.

Accepted Answer

A fund is a separate accounting entity with a double-entry accounting system. It must have assets set aside for specific purposes, and it may have a separate revenue stream.

Question 4

Which of the following is not a fiduciary fund type?
A) Agency.
B) Expendable trust.
C) Private-purpose trust.
D) Investment trust.

Accepted Answer

Fiduciary funds include private purpose trust, investment trust, pension trust and agency funds.

Question 5

Level "A" GAAP for Cook County Hospital,a public hospital,would be established by the:
A) Governmental Accounting Standards Board.
B) Financial Accounting Standards Board.
C) Hospital Financial Management Association.
D) American Institute of Certified Public Accountants.

Accepted Answer

Level "A" GAAP applies to state and local governmental entities, including public hospitals, and is established by the Governmental Accounting Standards Board (GASB). The Financial Accounting Standards Board (FASB) is responsible for establishing GAAP for private-sector entities. The Hospital Financial Management Association (HFMA) and the American Institute of Certified Public Accountants (AICPA) provide guidance and support for healthcare financial management and accounting, but they do not establish GAAP.

Question 6

Which of the following is most correct with regard to Management's Discussion and Analysis (MD&A)?
A) State and local governments are required to provide an MD&A.
B) Federal agency financial reports are required to provide an MD&A.
C) Both state and local governments and federal agencies are encouraged, but not required to provide an MD&A.
D) Both state and local governments and federal agencies are required to provide an MD&A.

Accepted Answer

Both state and local governments and federal agencies are required to provide an MD&A. The MD&A is a required component of the financial reporting of state and local governments and federal agencies, according to Generally Accepted Accounting Principles (GAAP) set by the Governmental Accounting Standards Board (GASB) and the Federal Accounting Standards Advisory Board (FASAB), respectively.

Question 7

Under GASB Statement 34,accrual accounting is used for:
A) government-wide financial statements only.
B) government-wide financial statements and proprietary fund financial statements only.
C) government-wide, proprietary fund, and fiduciary fund financial statements only.
D) government-wide and all fund financial statements.

Accepted Answer

The answer of Under GASB Statement 34,accrual accounting is used...

Question 8

Notre Dame University,a private institution,has level "A" GAAP established by the:
A) American Institute of Certified Public Accountants.
B) Governmental Accounting Standards Board.
C) Financial Accounting Standards Board.
D) National Association of College and University Business Officers.

Accepted Answer

The answer of Notre Dame University,a private institution,has level "A"...

Question 9

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?
A) Special revenue fund
B) Capital projects fund
C) Private-purpose trust fund
D) General fund

Accepted Answer

The receipt of the sales taxes should be accounted for in a Capital Projects Fund, as the funds are legally restricted for the construction of a new courthouse. A Special Revenue Fund would be used for revenue that is restricted for a specific purpose but not for capital projects. A Private-Purpose Trust Fund would be used for funds held in trust for a specific beneficiary or purpose. The General Fund is the primary operating fund for the government entity, but it would not be appropriate to account for the sales taxes in this fund as they are legally restricted for a specific purpose.

Question 10

The term "proprietary funds" applies to:
A) enterprise and internal service funds.
B) pension, investment trust and enterprise funds.
C) enterprise, internal service, and private-purpose trust funds.
D) none of the above answers are correct.

Accepted Answer

Proprietary funds refer to funds that are used by governments to conduct business-like activities. Enterprise funds and internal service funds fall under this category, as they are used for activities that charge a fee for goods or services. Private-purpose trust funds and pension funds are not considered proprietary funds as they are used for specific dedicated purposes.

Question 11

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?
A) Debt service fund
B) Capital projects fund
C) Enterprise fund
D) General fund

Accepted Answer

The general fund is the fund that accounts for the day-to-day operations and expenditures of a city government. The receipt from the sale of police cars would be considered a general revenue source and would be accounted for in the general fund.

Question 12

GASB Concepts Statement No.3,Communication Methods in General Purpose External Financial Reports that Contain Basic Financial Statements,states that
A) notes to the financial statements may include management's objective explanations.
B) required supplementary information must be objective and may not include predictions or subjective assessments.
C) disclosure in the notes is not an adequate substitute for recognition in the financial statements.
D) All of the above are correct.

Accepted Answer

All of the statements are correct according to GASB Concepts Statement No. 3. Notes to financial statements can provide management's objective explanations, required supplementary information should be objective without subjective assessments or predictions, and disclosures in the notes cannot substitute for recognition in the financial statements.

Question 13

Which of the following is an objective of federal financial reporting?
A) Budgetary Integrity
B) Operating Performance
C) Stewardship
D) All of the above

Accepted Answer

All of the above are objectives of federal financial reporting. Budgetary integrity ensures compliance with legal and budgetary requirements, Operating performance measures how well the government carries out its mission, and Stewardship ensures accountability for the use of public funds.

Question 14

A city government makes its semiannual payment of interest on revenue bonds issued to pay for the construction of additional subway stations.Which fund would account for the payment?
A) Debt service fund
B) Capital projects fund
C) Enterprise fund
D) Internal service fund

Accepted Answer

The answer of A city government makes its semiannual payment...

Question 15

Which of the following is true regarding fund classifications?
A) Governmental funds include the General, special revenue, debt service, capital projects, and permanent.
B) Proprietary funds include enterprise, internal service, and private-purpose.
C) Both of the above.
D) None of the above.

Accepted Answer

The answer of Which of the following is true regarding...

Question 16

Under GASB Statement 34,modified accrual accounting would be found in the:
A) government-wide financial statements only.
B) governmental fund financial statements only.
C) governmental and fiduciary fund financial statements only.
D) governmental, proprietary, and fiduciary fund financial statements but not in the government-wide financial statements.

Accepted Answer

Modified accrual accounting is used in governmental fund financial statements, which includes the general fund, special revenue funds, debt service funds, capital projects funds, and permanent funds. The government-wide financial statements use full accrual accounting. The fiduciary fund financial statements use a different basis of accounting called full accrual with modifications. The proprietary fund financial statements use full accrual accounting.

Question 17

Which of the following is not true regarding GASB Concepts Statement No.2,Service Efforts and Accomplishments Reporting:
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.
B) It outlines categories of information that might be reported.
C) It prescribes detailed standards governing the reporting of service efforts and accomplishments reporting.
D) None of the above, all are true.

Accepted Answer

GASB Concepts Statement No.2, Service Efforts and Accomplishments Reporting outlines categories of information that might be reported, but it does not prescribe detailed standards governing the reporting of service efforts and accomplishments reporting.

Question 18

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?
A) Special revenue fund
B) Capital projects fund
C) Private-purpose trust fund
D) General fund

Accepted Answer

Special revenue funds are used to account for the proceeds of specific revenue sources that are legally restricted or committed to spending for specific purposes. In this case, the local option sales taxes are legally restricted to hiring teachers for hearing impaired school children, so a special revenue fund should be used to account for the receipt of the sales taxes. The other fund options do not fit the specific purpose of the restricted revenue source.

Question 19

Which of the following are the governmental funds?
A) General, special revenue, debt service, capital projects, permanent.
B) General, special revenue, debt service, capital projects, private purpose.
C) General, special revenue, debt service, capital projects, internal service.
D) None of the above.

Accepted Answer

General, special revenue, debt service, capital projects, and permanent funds are all governmental funds recognized by the Governmental Accounting Standards Board (GASB). Private purpose and internal service funds are not considered governmental funds.

Question 20

Which of the following organizations has authority to establish accounting and financial reporting standards for the federal government?
A) Federal Accounting Standards Advisory Board.
B) Office of Management and Budget.
C) Governmental Accounting Standards Board.
D) None of the above; no one has been granted authority to set standards for the federal government

Accepted Answer

The Federal Accounting Standards Advisory Board (FASAB) has been granted authority to establish accounting and financial reporting standards for the federal government.

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

Under GASB Statement 34,capital assets:

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

In order for a fund to exist,there must be

Which of the following is not a fiduciary fund type?

Level "A" GAAP for Cook County Hospital,a public hospital,would be established by the:

Which of the following is most correct with regard to Management's Discussion and Analysis (MD&A) ?

Under GASB Statement 34,accrual accounting is used for:

Notre Dame University,a private institution,has level "A" GAAP established by the:

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?

The term "proprietary funds" applies to:

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?

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

Which of the following is an objective of federal financial reporting?

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

Which of the following is true regarding fund classifications?

Under GASB Statement 34,modified accrual accounting would be found in the:

Which of the following is not true regarding GASB Concepts Statement No.2,Service Efforts and Accomplishments Reporting:

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?

Which of the following are the governmental funds?

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