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Solution Manual for Government And Not For Profit Accounting
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hj Concepts And Practices 9th Edition Michael H. Granof|Latest
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hj Updated Version 2024. A+
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Chapter 1 hj
The Government and Not-For-Profit Environment
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Questions hjfor hjReview hjand hjDiscussion
1. The hjcritical hjdistinction hjbetween hjfor-profit hjbusinesses hjand hjnot-for-profits hjincluding
hj governments hjis hjthat hjbusinesses hjhave hjprofit hjas hjtheir hjmain hjmotive hjwhereas hjthe hjothers hjhave
hj service. hjA hjprimary hjpurpose hjof hjfinancial hjreporting hjis hjto hjreport hjon hjan hjentity‘s
accomplishments hj— hjhow hjwell hjit hjachieved hjits hjobjectives. hjAccordingly, hjthe hjfinancial
hj
hj statements hjof hjbusinesses hjmeasure hjprofitability, hjtheir hjkey hjobjective. hjFinancial hjreports hjof
hj governments hjand hjother hjnot-for-profits hjshould hjnot hjfocus hjon hjprofitability, hjsince hjit hjis hjnot hja
hj relevant hjobjective. hjIdeally, hjtherefore, hjthey hjshould hjfocus hjon hjother hjperformance hjobjectives,
hj such hjas hjhow hjwell hjthe hjorganizations hjmet hjtheir hjservice hjgoals. hjIn hjreality, hjhowever, hjthe hjgoal
hj of hjreporting hjon hjhow hjwell hjthey hjhave hjachieved hjsuch hjgoals hjhas hjproven hjdifficult hjto hjattain hjand
hj the hjfinancial hjreports hjhave hjfocused hjmainly hjon hjfinancially- hjrelated hjdata.
2. Governments hjand hjnot-for-profits hjare hj―governed‖ hjby hjthe hjbudget, hjwhereas hjbusinesses
hj are hjgoverned hjby hjthe hjmarketplace. hjThe hjbudget hjis hjthe hjkey hjpolitical hjand hjfiscal hjdocument hjof
h j governments hjand hjnot-for-profits. hjIt hjdetermines hjhow hjan hjentity hjobtains hjits hjresources hjand
hj how hjit hjallocates hjthem. hjIt hjencapsulates hjmost hjkey hjdecisions hjof hjconsequence hjmade hjby hjthe
organization. hjIn hja hjgovernment hjthe hjbudget hjis hjnot hjmerely hja hjmanagerial hjdocument; hjit hjis hjthe
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hj law.
3. Owing hjto hjthe hjsignificance hjof hjthe hjbudget, hjconstituents hjwant hjassurance hjthat hjthe
entity hjachieves hjits hjrevenue hjestimates hjand hjcomplies hjwith hjits hjspending hjmandates. hjThey
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hj expect hjthe hjfinancial hjstatements hjto hjreport hjon hjhow hjthe hjbudget hjwas hjadministered.
4. Interperiod hjequity hjis hjthe hjconcept hjthat hjtaxpayers hjof hjtoday hjpay hjfor hjthe hjservices hjthat
hj they hjreceive hjand hjnot hjshift hjthe hjpayment hjburden hjto hjtaxpayers hjof hjthe hjfuture. hjFinancial
hj reporting hjmust hjindicate hjthe hjextent hjto hjwhich hjinterperiod hjequity hjhas hjbeen hjachieved.
Therefore, hjit hjmust hjdetermine
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and hjreport hjupon hjthe hjeconomic hjcosts hjof hjthe hjservices hjperformed hj(not hjmerely hjthe hjcash hjcosts)
and hjof hjthe hjtaxpayers‘ hjcontribution hjtoward hjcovering hjthose hjcosts.
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5. The hjmatching hjconcept hjmay hjbe hjless hjrelevant hjfor hjgovernments hjand hjnot-for-profits
than hjfor hjbusinesses hjbecause hjthere hjmay hjbe hjno hjconnection hjbetween hjrevenues hjgenerated hjand
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hj the hjquantity, hjquality hjor hjcost hjof hjservices hjperformed. hjAn hjincrease hjin hjthe hjdemand hjfor, hjor
hj cost hjof, hjservices hjprovided hjby hja hjhomeless hjshelter hjwould hjnot hjnecessarily hjresult hjin hjan
hj increase hjin hjthe hjamount hjof hjdonations hjthat hjit hjreceives. hjOf hjcourse, hjgovernments hjand hjnot-
hj for-profits hjare hjconcerned hjwith hjmeasuring hjinterperiod hjequity hjand hjfor hjthat hjpurpose hjthe
hj matching hjconcept hjmay hjbe hjvery hjrelevant.
6. Governments hjmust hjmaintain hjan hjaccounting hjsystem hjthat hjassures hjthat hjrestricted
hj resources hjare hjnot hjinadvertently hjexpended hjfor hjinappropriate hjpurposes. hjMoreover, hjstatement
users hjmay hjneed hjseparate hjinformation hjon hjthe hjrestricted hjresources hjby hjcategory hjof hjrestriction
hj
hj and hjthe hjunrestricted
resources. hjIn hjpractice, hjthese hjrequirements hjhave hjled hjgovernments hjto hjadopt hja hjsystem hjof
―fund‖ hjaccounting hjand hjreporting.
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7. Even hjgovernments hjwithin hjthe hjsame hjcategory hjmay hjengage hjin hjdifferent hjtypes hjof
hj activities. hjFor hjexample, hjsome hjcities hjoperate hja hjschool hjsystem hjwhereas hjothers hjdo hjnot. hjThose
hj that hjare hjnot hjwithin hjthe hjsame hjcategory hjmay hjhave hjrelatively hjlittle hjin hjcommon. hjFor hjexample,
a hjstate hjgovernment hjshares hjfew hjcharacteristics hjwith hja hjcity.
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8. If hja hjgovernment hjhas hjthe hjpower hjto hjtax, hjthen hjit hjhas hjcommand hjover, hjand hjaccess hjto,
resources. hjTherefore, hjits hjfiscal hjwell-being hjcannot hjbe hjassessed hjmerely hjby hjmeasuring hjthe
hj
h j assets h j that h j it
―owns.‖ h j For h j example, h j the h j fiscal h j condition h j of h j a h j city h j should hjincorporate hjthe
wealth hjof hjthe hjresidents hjand hjbusinesses hjwithin hjthe hjcity, hjtheir hjearning hjcapacity, hjand hjthe
hj
hj city‘s hjwillingness hjto hjexploit hjits hjtax hjbase.
9. Many hjgovernments hjbudget hjon hja hjcash hjor hjnear-cash hjbasis. hjHowever, hjthe hjcash hjbasis hjof
hj accounting hjdoes hjnot hjprovide hjadequate hjinformation hjwith hjwhich hjto hjassess hjinterperiod hjequity.
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hjFinancial hjstatements hjthat hjsatisfy hjthe hjobjective hjof hjreporting hjon hjinterperiod hjequity hjmay hjnot
hj satisfy hjthat hjof hjreporting hjon hjbudgetary hjcompliance. hjMoreover, hjstatements hjthat hjreport hjon
either hjinterperiod
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