Multiple Choice. Choose the best answer. 1. Special purpose governments differ from general purpose governments in that
1. Special purpose governments differ from general purpose governments in that special purpose governments:
a. Provide a single function or limited range of functions.
b. Do not have the power to levy taxes.
c. Derive their power from state governments.
d. All of the above.
2. Which of the following is a true statement about accounting standard- setting bodies?
a. The Financial Accounting Standards Board (FASB) sets accounting and reporting standards for all not-for-profit organizations, but the Governmental Accounting Standards Board (GASB) may also prescribe standards for governmental not-for-profit organizations provided they do not conflict with FASH standards.
b. The GASB sets accounting and reporting standards for all governmental organizations the FASB sets standards for all business and not-for-profit organizations.
c. Only the FASB and GASB enjoy AICPA Ethics Rule 203 coverage as recognized standard-setting authoritative bodies, not the FASAB.
d. The FASB and GASB are administratively supported by the Financial Accounting Foundation; the FASAB draws its support from the federal government.
3. A distinguishing difference between governments and not-for-profit organizations is:
a. Lack of a profit motive.
b. Absence of owners.
c. Taxation as a significant source of funding.
d. Receipt of significant amounts of funding through nonexchange transactions (i.e.. resource providers do not get proportional benefits for what they pay to the organization).
4. Which of the following organizations would most likely meet the criteria to be classified as a governmental not-for-profit organization?
a. A religion-affiliated university.
b. A privately founded museum.
c. A public school district.
d. A city-administered community service agency.
5. The concept of interperiod equity refers to whether:
a. Revenues equaled or exceeded expenditures for the year.
b. Current year revenues were sufficient to pay for current year services.
c. Total assets (current and noncurrent) were sufficient to cover total liabilities (current and noncurrent).
d. Future taxpayers can expect to receive the same or higher level of services as current taxpayers.
6. Which of the following is (are) included in the minimum requirements for general purpose external financial reporting of a government?
a. Comprehensive Annual Financial Report.
b. Management’s Discussion and Analysis (MD&A) and basic financial statements.
c. Combining fund financial statements.
d. Statistical section.
7. The basic financial statements of a state or local government include all of the following except:
a. An MD&A.
b. Government-wide financial statements.
c. Fund financial statements.
d. Notes to the financial statements.
8. The modified accrual basis of accounting is used to account for revenues and expenditures reported in the financial statements of:
a. Governmental activities at the government-wide level.
b. Business-type activities at the government-wide level.
c. Governmental funds.
d. Proprietary funds.
9. Separate columns for individual major funds should be provided in which of the following financial statements?
a. Statement of net assets—government-wide; balance sheet—governmental hinds; statement of net assets—proprietary hinds.
b. Statement of net assets—government-wide; balance sheet—governmental funds; statement of fiduciary net assets—fiduciary hinds.
c. Statement of net assets—government-wide; statement of net assets— proprietary funds: statement of fiduciary net assets—fiduciary hinds.
d. Balance sheet—governmental funds; statement of net assets—proprietary funds.
10. Under GASBS 34, financial information related to fiduciary activities is reported in which financial statements?
Financial Statements Financial Statements
a. No Yes
b. Yes No
c. Yes Yes
d. No No
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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