TEST BANK FOR ACCOUNTING FOR GOVERNMENTAL & NONPROFIT ENTITIES 17TH EDITION JACQUELINE RECK, SUZANNE LOWENSOHN, EARL WILSON DUE NOV
Chapter 01 Introduction to Accounting and Financial Reporting for Governmental and Not-for-Profit Entities
True / False Questions
1. Special purpose governments gen...
TEST BANK FOR ACCOUNTING FOR
GOVERNMENTAL & NONPROFIT
ENTITIES 17TH EDITION
JACQUELINE RECK, SUZANNE
LOWENSOHN, EARL WILSON DUE
OCTOBER
, Chapter 01
Introduction to Accounting and Financial Reporting for
Governmental and Not-for-Profit Entities
True / False Questions
1. Special purpose governments generally provide a wider range of services to their
residents than do general purpose governments.
True False
2. Examples of general purpose governments include cities, towns, and public schools that
receive tax revenue to finance the services they provide.
True False
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 purpose.
True False
4. The Governmental Accounting Standards Board (GASB) is the body authorized to
establish accounting principles for all government entities.
True False
5. The Financial Accounting Standards Board (FASB) is the body authorized to establish
accounting principles for all colleges and universities and health care entities.
True False
6. Neither governmental nor not-for-profit entities have residual equity that can be
distributed to owners.
True False
7. A characteristic common to governmental and not-for-profit organizations is that they do
not exist to provide goods or services at a profit or profit equivalent.
True False
8. The needs of users of government financial reports are the same as those of users of
business entity financial reports.
, True False
9. The Federal Accounting Standards Advisory Board (FASAB) recommends accounting
principles and standards for the federal government and its agencies and departments.
True False
10. The FASB, GASB, and FASAB identify primarily external users as the focus of their
financial reports.
True False
11. Interperiod equity refers to the concept that current-year revenues are sufficient to pay for
services provided during the year, so that future taxpayers will not be required to assume the
burden for services previously provided.
True False
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.
True False
13. The Financial Accounting Foundation has oversight over both FASB and GASB.
True False
14. In addition to financial statements and notes, GASB requires governments to provide
information on service efforts and accomplishments (SEA) in their reports to the public.
True False
15. Providing information on accountability is the primary financial reporting objective for
both governmental and not-for-profit entities.
True False
16. A difference in the financial reporting objectives for governmental entities and not-for-
profit entities is that governmental entities report on compliance with laws, regulations, and rules
that impact financial reports.
True False
17. Since neither governmental nor not-for-profit entities have investors, the financial
reporting objectives are the same for both types of entities.
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