1. Which of the following is an objective of financial reporting by state and local governments as established by the GASB? Financial reporting should assist users in

a. Assessing the management skills of top management.

b. Determining if current-period revenues were sufficient to pay for current-period services.

c. Evaluating the cash management operations of the government for the year.

d. Assessing whether the government provided appropriate services to its constituents in the current year.

2. In descending order, the hierarchy of GAAP applicable to a church-owned college may be:

a. FASB Statements and Interpretations, FASB Technical Bulletins, AICPA Industry Audit Guides, FASB Implementation Guides, other accounting literature—including GASB standards.

b. FASB Statements and Interpretations, FASB Technical Bulletins, FASB Implementation Guides, AICPA Practice Bulletins (if cleared by FASB).

c. GASB Statements and Interpretations, AICPA Industry Audit Guides, GASB Implementation Guides, other accounting literature—including FASB standards.

d. GASB Statements and Interpretations, GASB Technical Bulletins, AICPA Industry Audit Guides, AICPA Practice Bulletins (if cleared by GASB), GASB Implementation Guides, other accounting literature—including FASB standards.

3. A city receives a donation from a citizen who specifies that the principal must be invested and the earnings must be used to support operations of a city-owned recreational facility. The principal of this gift should be accounted for in which of the following funds?

a. Trust fund.

b. Special revenue fund.

c. Permanent fund.

d. Internal service fund.

4. The focus of the government-wide statement of activities is on which of the following?

a. Determining the total expenses by natural classification.

b. Determining the total expenses by function.

c. Determining the total revenues by function.

d. Determining the net cost of functions.

5. Which of the following is a primary benefit of a performance budget?

a. It facilitates control by establishing rigid spending mandates.

b. It encourages accomplishment of objectives by associating expenditures with outcomes.

c. It encourages planning by requiring management to anticipate every type of expenditure.

d. It provides decision-makers with detailed information.

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1 b Determining if currentperiod ... View the full answer