ACCOUNTING N11605Test-Bank-Essentials-of-Accounting-for-Governmental-and-Not-for-Profit-Organizations-12th-Edition

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Chapter 1 Introduction to Accounting and Financial Reporting for Governmental and Not-for-Profit Organizations True/False Questions 1. The Governmental Accounting Standards Board sets financial ... reporting standards for all units of government: federal, state, and local. Answer: False 2. Fund accounting exists primarily to provide assurance that resources are used according to legal or donor restrictions. Answer: True 3. The Financial Accounting Standards Board sets financial reporting standards for profit- seeking businesses and nongovernmental, not-for-profit organizations. Answer: True 4. FASAB, GASB and FASB standards are set forth primarily in documents called statements. Answer: True 5. FASAB, GASB and FASB standards are set forth primarily in documents called concept statements. Answer: False 6. The FASAB was established to recommend accounting and financial reporting standards for the federal government. Answer: True 7. The GASB does not require supplementary information to be reported with its financial statements even if it is essential to establish appropriate context for the financial statements and notes. Answer: False 8. The Financial Accounting Standards Board sets financial reporting standards for private not-for-profits and investor-owned businesses. Answer: True 9. An organization is presumed to be governmental if it has the ability to issue directly debt that is exempt from federal taxes. Answer: True 10. The Financial Accounting Standards Board and the Governmental Accounting Standards Board are parallel bodies under the oversight of the Financial Accounting Foundation. Answer: True 11. The Federal Accounting Standards Advisory Board requires less extensive reports than does the FASB or GASB. Answer: False 12. The FASAB requires more financial statements than are typically required of state and local governments. Answer: True 13. The only objective of the Governmental Accounting Standards Board is to help users determine compliance with finance-related laws, rules, and regulations. Answer: False 14. Governments must have as many funds as necessary to fulfill legal requirements and sound financial administration but must have at a minimum a General Fund. Answer: True 15. A Management's Discussion and Analysis is required for state and local governmental units, and the federal government. Answer: True 16. The GASB Concept Statement on Service Efforts and Accomplishments Reporting encourages state and local governments to include inputs of nonmonetary resources in their financial reporting. Answer: True 17. Although certain supplementary information may not be required, if presented, it must follow GASB guidance regarding its format and content. Answer: True 18. The GASB Concept Statement on Service Efforts and Accomplishments Reporting requires state and local governments to include inputs of nonmonetary resources in their financial reporting. Answer: False 19. The format and content of supplementary information which is not required by GASB is up to the discretion of the reporting entity Answer: False 20. GASB and FASB Concept Statements establish accounting standards that must be complied with to receive an unqualified audit opinion. Answer: False 21. FASAB, GASB and FASB standards are set forth primarily in documents called interpretations. Answer: False 22. Fund-basis statements are presented for three categories of government activities: governmental, proprietary, and fiduciary. Answer: True 23. State and local governments may use twelve different fund types. Answer: False 24. The economic resource measurement focus and accrual basis of measurement is an important feature of government-wide financial statements. Answer: True 25. Business activities fund statements must be changed to the accrual basis from the modified accrual basis when preparing government-wide financial statements. Answer: False 26. Governmental-type activities fund statements must use accrual basis when preparing government-wide financial statements. Answer: True 27. Fiduciary funds of a governmental unit use the current financial resources measurement focus and modified accrual basis of accounting Answer: False 28. Under the accrual basis of accounting, revenues are recognized when measurable and available to finance expenditures of the current period. Answer: False 29. 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. Answer: True 30. General fixed assets of the government are reported both in the government-wide financial statements and the governmental fund financial statements. Answer: False 31. Comparison of the legally approved budget with actual results of the General Fund is not part of required supplementary information in the CAFR. Answer: False 32. Comparison of the legally approved budget with actual results of the General Fund is included as part of required supplementary information in the CAFR. Answer: True 33. Long-term debt that is to be paid with tax revenues is not reported both in the government-wide statements and in the governmental fund statements Answer: True 34. Measurement focus refers to those items, such as current and long-term assets, that are being reported on the financial statements. Answer: True 35. Infrastructure is capitalized by state and local governmental units. Answer: True 36. Fiduciary funds include agency, pension trust, investment trust, and permanent funds. Answer: False 37. The Financial Accounting Standards Board has authority to establish accounting and financial reporting standards for both private and state universities. Answer: False [Show More]

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