Question 1

Fiduciary funds include agency, pension trust, investment trust, and permanent funds.

Accepted Answer

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

Question 2

Fiduciary funds of a governmental unit use the current financial resources measurement focus and modified accrual basis of accounting

Accepted Answer

Fiduciary funds use the economic resources measurement focus and the accrual basis of accounting.

Question 3

Comparison of the legally approved budget with actual results of the General Fund is included as part of required supplementary information in the CAFR.

Accepted Answer

The budget comparison schedule or statement is part of the RSI in the CAFR

Question 4

FASB sets the reporting standards for private not-for-for profits.

Accepted Answer

The FASB sets standards for private not-for-profits and investor-owned businesses.

Question 5

Governmental-type activities fund statements must use accrual basis when preparing government-wide financial statements.

Accepted Answer

Governmental funds use the modified accrual basis of accounting and must be adjusted through worksheet entries to reflect an economic resource measurement focus and the accrual basis of accounting before being presented in the government-wide financial statements.

Question 6

Infrastructure is capitalized by state and local governmental units.

Accepted Answer

Infrastructure, purchased through governmental type funds would not be recorded under the current financial resource measurement focus

Question 7

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.

Accepted Answer

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

Question 8

Fund-basis statements are presented for three categories of government activities: governmental, proprietary, and fiduciary.

Accepted Answer

The 11 government funds used by state and local governments are split into three categories; fiduciary, proprietary and governmental.

Question 9

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

Accepted Answer

Proprietary funds are used to account for a government's activities that are businesslike in nature. Proprietary funds use the accrual basis of accounting.

Question 10

Under the accrual basis of accounting, revenues are recognized when measurable and available to finance expenditures of the current period.

Accepted Answer

The accrual basis of accounting recognizes revenues when they are earned and are expected to be realized, and recognizes expenses when the related goods or services are used up. The modified accrual basis of accounting measures revenues when measurable and available to finance the expenditures of the current period.

Question 11

Permanent funds can be either a governmental fund or a fiduciary fund where only income on donated assets may be spent.

Accepted Answer

A Permanent fund is a governmental fund. Fiduciary funds are private-purpose trust, investment trust, pension trust or agency funds.

Question 12

The economic resource measurement focus and accrual basis of measurement is an important feature of government-wide financial statements.

Accepted Answer

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

Question 13

State and local governments may use twelve different fund types.

Accepted Answer

There are eleven fund types.

Question 14

Comparison of the legally approved budget with actual results of the General Fund is not part of required supplementary information in the CAFR.

Accepted Answer

The budget comparison schedule or statement) is part of the RSI in the CAFR

Question 15

General fixed assets of the government are reported both in the government-wide financial statements and the governmental fund financial statements.

Accepted Answer

Governmental funds are reported using the modified accrual basis of accounting. Governmental-type activities are reported in the government-wide statements using the accrual basis of accounting, including fixed assets and long-term debt.

Question 16

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

Accepted Answer

Governmental activities balances are changed through combining worksheets and journal entries to reflect an economic resource measurement focus and the accrual basis of accounting before being presented in the government-wide statements.

Question 17

Measurement focus refers to those items, such as current and long-term assets, that are being reported on the financial statements.

Accepted Answer

Measurement focus refers to what items are being reported in the financial statements. An economic resource measurement focus measures both current and long-term assets and liabilities and is the measurement focus used by commercial businesses. Current financial resources measurement focus measures the extent to which financial resources obtained during a period are sufficient to cover claims incurred during that period against financial resources and the net financial resources available for future periods.

Question 18

The Financial Accounting Standards Board has authority to establish accounting and financial reporting standards for both private and state universities.

Accepted Answer

Accounting and financial reporting standards for profit-seeking businesses and for nongovernmental not-for-profit organizations are set by the FASB which includes private universities. The GASB sets standards for governmentally related not-for-profits organizations such as colleges and universities.

Question 19

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

Accepted Answer

The GASB issued interpretations in the past to provide guidance on previously issued statements but no longer does so.

Question 20

Internal Service funds are treated as governmental activities in the government-wide statements if the principal customers are other departments within the General Fund.

Accepted Answer

Per Illustration 1-3, most internal service funds are included as governmental activities

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