Which of the following groups took the lead in setting GAAP for business enterprises?
D. Independent auditors took the lead in the public sector
Which organization appoints the members of GASB?
The FAF appoints members of FASB & GASB.
Which is the following has the LOWEST authoritative status on the GAAP hierarchy?
C. GASB Concepts Statements is not part of the GAAP hierarchy.
Which of the following statements is TRUE?
D. All of the above.
Which of the following sets GAAP for non profit organizations?
B. FASB covers both private-sector business & non profit organizations.
Which of the following organizations has designated the GASB as the authoritative standard-setting body for state & local governments?
D. AICPA
T/F The appropriated budget of a government is essentially a financial plan.
False,the appropriated budget of government is much more that just a financial plan.
In accordance with the number of funds principle, when is it appropriate to use a fund other than the general fund.
D. All of the above.
In which of the following circumstances is the use of an agency fund appropriate?
B. When assets are held for third parties other than the reporting government (OPM)
Which of the following fund types uses the economic resources measurement focus?
C. Private-purpose trust fund
General Fund & Permanent Fund use current financial resources measurement focus
Agency Fund do not have a measurement focus
Which of the following fund types uses the current financial resources measurement focus?
B. Permanent Fund
Proprietary funds use economic focus
Agency do not have measurement focus
Trust use economic focus
The operating statement of a proprietary fund should answer which of the following questions?
C. What transactions and events during the period have increased or decreased the fund's total economic resources?
Which of the following would be reflected in the operating statement of a proprietary fund?
B. Incurrence of interest (interest expense)
A, B or D neither affect net assets, which is the measure of economic resources that serves as the focus of proprietary funds.
Which of the following would always be reflected in the operating statement of a government fund?
A. Capital outlay are use of current financial resources.
Depreciation & Amortization expense affect net assets.
Revenue is recognized in a gov't fund only to the extent that it is available to liquidate expenditures or the the current period.
Which of the following is a basic financial statement of a proprietary fund?
A. Statement of revenues, expenses, & changes in net assets.
What is the appropriate measurement focus & basis of accounting for trust funds?
Economic resources measurement focus/accrual basis of accounting
Which of the following is NOT a basic government-wide financial statement?
C. Statement of cash flows
In which of the following situations would the use of an internal service fund be justified?
D. All of the above
Which of the following funds types should be used for restricted resources that are permanently invested?
C. B or C
Which of the following uses of a capital projects fund would NOT be appropriate?
B. To accumulate resources for future capital improvements.
The focus of capital projects fund is on a construction & acquisition not used as a reserve account.
T/F Fund accounting is primarily intended to enhance operational accountability?
False to demonstrate legal compliance.
T/F Operational accountability is the responsibility of governments to justify that their actions in the current period have complied with public decisions concerning the raising and spending of public moneys in the short term.
False - Operational accountability refers to governments responsibility to report the extent in which they have met their operating objectives efficiently & effectively, using all resources available for that purpose.
T/F The principal of the permanent fund may not be spent.
True
T/F The use of an enterprise fund is required when the repayment of debt is backed solely by user fees & charges.
True
T/F GAAP permit, but NEVER require, the use of an internal service fund.
True
T/F The use of an internal service fund is only appropriate in situations where the government itself is the predominant participant in the activity.
True
T/F GAAP require the use of a separate trust fund for each individual pension plan.
True
T/F The government-wide financial statements use the economic resources measurement focus and the accrual basis of accounting, whereas all funds, regardless of type, use the current financial resources measurement focus and the modified accrual basis of accounting.
False
T/F All funds that use the modified accrual basis of accounting also sue the current financial resources measurement focus.
True
T/F The basic financial statements include both the government-wide financial statements and the fund financial statements.
True also the notes to the F/S
T/F Fund accounting is naturally well suited to achieving the goals of fiscal accountability.
True - help to ensure & demonstrate legal compliance.
T/F The various funds used by state & local governments can be classified into 4 broad categories.