Test bank for Accounting for Governmental and Nonprofit Entities, 18th Edition
Accounting for Governmental and Nonprofit Entities, 18e (Reck)
Chapter 1 Introduction to Accounting and Financial Reporting for Government and Not-
for-Profit Entities
1) Special purpose governments generally provide a wider range of services to their residents
than do general purpose governments.
Answer: FALSE
Difficulty: 1 Easy
Topic: Distinguishing Government and Not-For-Profit Organizations
Learning Objective: 01-01 Identify and explain the characteristics that distinguish government
and not-for-profit entities from for-profit entities.
Bloom's: Remember
AACSB: Knowledge Application
AICPA: BB Industry
St
2) Examples of general-purpose governments include cities, towns, and public schools that
receive tax revenue to finance the services they provide.
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Answer: TRUE
Difficulty: 1 Easy
Topic: Distinguishing Government and Not-For-Profit Organizations
Learning Objective: 01-01 Identify and explain the characteristics that distinguish government
and not-for-profit entities from for-profit entities.
yN
Bloom's: Remember
AACSB: Knowledge Application
AICPA: BB Industry
3) The Governmental Accounting Standards Board (GASB) is the body authorized to establish
accounting principles for all state and local governments, both general purpose and special
es
purpose.
Answer: TRUE
Difficulty: 1 Easy
Topic: Sources of financial reporting standards
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Learning Objective: 01-02 Identify the authoritative bodies responsible for setting financial
reporting standards for (1) state and local governments, (2) the federal government, and (3) not-
for-profit organizations.
Bloom's: Remember
AACSB: Knowledge Application
AICPA: BB Industry
, Test bank for Accounting for Governmental and Nonprofit Entities, 18th Edition
4) The Governmental Accounting Standards Board (GASB) is the body authorized to establish
accounting principles for all government entities.
Answer: FALSE
Difficulty: 1 Easy
Topic: Sources of financial reporting standards
Learning Objective: 01-02 Identify the authoritative bodies responsible for setting financial
reporting standards for (1) state and local governments, (2) the federal government, and (3) not-
for-profit organizations.
Bloom's: Remember
AACSB: Knowledge Application
AICPA: BB Industry
5) The Financial Accounting Standards Board (FASB) is the body authorized to establish
accounting principles for all colleges and universities and health care entities.
St
Answer: FALSE
Difficulty: 1 Easy
Topic: Sources of financial reporting standards
ud
Learning Objective: 01-02 Identify the authoritative bodies responsible for setting financial
reporting standards for (1) state and local governments, (2) the federal government, and (3) not-
for-profit organizations.
Bloom's: Remember
AACSB: Knowledge Application
yN
AICPA: BB Industry
6) Neither governments nor not-for-profit entities have residual equity that can be distributed to
owners.
Answer: TRUE
es
Difficulty: 2 Medium
Topic: Distinguishing Government and Not-For-Profit Organizations
Learning Objective: 01-01 Identify and explain the characteristics that distinguish government
and not-for-profit entities from for-profit entities.
Bloom's: Understand
t
AACSB: Knowledge Application
AICPA: FN Reporting
, Test bank for Accounting for Governmental and Nonprofit Entities, 18th Edition
7) A characteristic common to governments and not-for-profit organizations is that they do not
exist to provide goods or services at a profit or profit equivalent.
Answer: TRUE
Difficulty: 2 Medium
Topic: Distinguishing Government and Not-For-Profit Organizations
Learning Objective: 01-01 Identify and explain the characteristics that distinguish government
and not-for-profit entities from for-profit entities.
Bloom's: Understand
AACSB: Knowledge Application
AICPA: BB Industry
8) The needs of users of government financial reports are the same as those of users of business
entity financial reports.
St
Answer: FALSE
Difficulty: 2 Medium
Topic: Distinguishing Government and Not-For-Profit Organizations
Learning Objective: 01-01 Identify and explain the characteristics that distinguish government
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and not-for-profit entities from for-profit entities.
Bloom's: Understand
AACSB: Knowledge Application
AICPA: BB Industry
yN
9) The Federal Accounting Standards Advisory Board (FASAB) recommends accounting
principles and standards for the federal government and its agencies and departments.
Answer: TRUE
Difficulty: 1 Easy
Topic: Sources of financial reporting standards
es
Learning Objective: 01-02 Identify the authoritative bodies responsible for setting financial
reporting standards for (1) state and local governments, (2) the federal government, and (3) not-
for-profit organizations.
Bloom's: Remember
AACSB: Knowledge Application
t
AICPA: BB Industry
, Test bank for Accounting for Governmental and Nonprofit Entities, 18th Edition
10) The FASB, GASB, and FASAB all focus their standards on both internal and external
financial reporting.
Answer: FALSE
Difficulty: 2 Medium
Topic: Objectives of financial reporting
Learning Objective: 01-03 Contrast and compare the objectives of financial reporting for (1)
state and local governments, (2) the federal government, and (3) not-for-profit organizations.
Bloom's: Understand
AACSB: Knowledge Application
AICPA: BB Industry
11) Interperiod equity refers to the concept that current-year revenues are sufficient to pay for
services provided that year, so that future taxpayers will not be required to assume the burden for
services previously provided.
St
Answer: TRUE
Difficulty: 2 Medium
Topic: Objectives of financial reporting
ud
Learning Objective: 01-03 Contrast and compare the objectives of financial reporting for (1)
state and local governments, (2) the federal government, and (3) not-for-profit organizations.
Bloom's: Understand
AACSB: Knowledge Application
AICPA: FN Reporting
yN
12) The minimum requirements for general purpose external financial reporting are (1)
management's discussion and analysis (MD&A), (2) the basic financial statements, including the
notes to the financial statements, and (3) combining and individual fund financial statements.
Answer: FALSE
es
Difficulty: 1 Easy
Topic: Financial Reporting of State and Local Governments
Learning Objective: 01-04 Explain the minimum requirements for general purpose external
financial reporting for state and local governments and how they relate to comprehensive annual
financial reports.
t
Bloom's: Remember
AACSB: Knowledge Application
AICPA: FN Reporting
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