Question 1

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

Accepted Answer

Proprietary funds are used to account for a government's activities that are businesslike in nature. The financial statements are prepared using the economic resources measurement focus and accrual accounting.

Question 2

The GASB and the FASB are parallel bodies under the oversight of the Financial Accounting Foundation FAF

Accepted Answer

The GASB and the FASB are parallel bodies under the oversight of the FAF. The FAF appoints the members of the two boards and provides financial support.

Question 3

The term "proprietary funds" applies to:

Accepted Answer

Proprietary funds include internal service and enterprise funds.

Question 4

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.

Accepted Answer

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

Question 5

According to FASB standards relating to Budgetary Accounting, the accounting system should provide the basis for appropriate budgetary control.

Accepted Answer

GASB standards contain a 3 part budgetary principle which requires the accounting system to provide appropriate budgetary control.

Question 6

According to GASB standards relating to Budgetary Accounting, an annual budget should be adopted by every governmental unit.

Accepted Answer

GASB standards contain a 3 part budgetary principle which requires annual budgets and budget to actual reporting

Question 7

A government may have two or more General Funds.

Accepted Answer

Every government will have a single General Fund but may have multiple funds in each of the other categories.

Question 8

The GASB recently published a white paper which identifies five environmental differences between governments and for-profit enterprises.

Accepted Answer

The white paper identifies five environmental differences between governments and for-profit businesses enterprises and describes how those differences manifest in differences in the objectives and practice of financial reporting.

Question 9

Which of the following has established a "Hierarchy of GAAP":

Accepted Answer

The FASB, FASAB and GASB all have hierarchies of GAAP for entities falling within their jurisdictions.

Question 10

GASB utilizes two additional elements that do not appear in the balance sheets of nongovernmental organizations: deferred inflows and deferred outflows of resources.

Accepted Answer

GASB utilizes two additional elements that do not appear in the balance sheets of nongovernmental organizations: deferred inflows and deferred outflows of resources. The most common deferred inflows are taxes that have been deferred to a future period when they are expected to be available for operations.

Question 11

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.

Accepted Answer

Government budgets are expressions of public policy and often carry the authority of law, preventing public officials from spending outside their budgetary authority.

Question 12

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

Accepted Answer

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

Question 13

The information needs of government creditors are vastly different from their counterparts in the corporate world which necessitates different accounting rules.

Accepted Answer

Like businesses, governments have creditors who are interested in assessing the credit worthiness of the government.

Question 14

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.

Accepted Answer

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

Question 15

Governmental funds include:

Accepted Answer

Government funds include permanent, debt service, capital project, special revenue and general.

Question 16

Depreciation on capital assets is included as an expense in the Statement of Activities in the governmental fund statements.

Accepted Answer

Governmental funds use the current financial resources measurement focus and modified accrual accounting. Under modified accrual accounting, revenues are recognized when measurable and available to finance the expenditures of the current period. Expenditures, not expenses, are recognized in the period in which the fund liability is incurred. Long-term assets are not generally recognized.

Question 17

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.

Accepted Answer

The GASB 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.

Question 18

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

Accepted Answer

Proprietary funds are used to account for a government's activities that are businesslike in nature. The financial statements are prepared using the economic resources measurement focus and accrual accounting.

Question 19

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.

Accepted Answer

A fund is a self-balancing set of accounts that separately reports the resources and activities of a part of the government and that is segregated because of the existence of restrictions or limitations on the use of resources.

Question 20

The Financial Accounting Foundation FAF) has oversight over the GASB but not the FASB.

Accepted Answer

The GASB and the FASB are parallel bodies under the oversight of the FAF. The FAF appoints the members of the two boards and provides financial support.

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

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

The GASB and the FASB are parallel bodies under the oversight of the Financial Accounting Foundation FAF

The term "proprietary funds" applies to:

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.

According to FASB standards relating to Budgetary Accounting, the accounting system should provide the basis for appropriate budgetary control.

According to GASB standards relating to Budgetary Accounting, an annual budget should be adopted by every governmental unit.

A government may have two or more General Funds.

The GASB recently published a white paper which identifies five environmental differences between governments and for-profit enterprises.

Which of the following has established a "Hierarchy of GAAP":

GASB utilizes two additional elements that do not appear in the balance sheets of nongovernmental organizations: deferred inflows and deferred outflows of resources.

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.

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

The information needs of government creditors are vastly different from their counterparts in the corporate world which necessitates different accounting rules.

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.

Governmental funds include:

Depreciation on capital assets is included as an expense in the Statement of Activities in the governmental fund statements.

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.

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

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.

The Financial Accounting Foundation FAF) has oversight over the GASB but not the FASB.