Test Bank For Accounting for Governmental & Nonprofit Entities Jacqueline Reck 18 Edition

Test Bank For Accounting for Governmental & Nonprofit Entities Jacqueline Reck 18 Edition

Test Bank For Accounting for Governmental & Nonprofit Entities, 17th edition, by Jacqueline Reck, Suzanne Lowensohn, and Earl Wilson, provides comprehensive coverage of accounting practices for government and nonprofit organizations. The book covers a range of topics related to accounting for these entities, including fund accounting, financial reporting, and auditing.

The test bank for this edition includes a variety of questions and problems designed to help students master the material. The test bank includes multiple-choice questions, true/false questions, and problems requiring written answers. Many of the questions and problems are based on real-world scenarios, making the material relevant and engaging for students.

Accounting for Governmental and Nonprofit Entities, 18e (Reck)

Chapter 2   Principles of Accounting and Financial Reporting for State and Local Governments

1) According to the guidance of GASB Concepts Statement 3, financial information can be communicated by recognition in the financial statements, disclosure in the notes to the financial statements, presentation as required supplementary information, or presentation as supplementary information.

2) According to GASB Concepts Statement 1 a primary objective of financial reports is to provide information useful in determining the accountability of the government.

3) Activities a local government can engage in are classified as governmental, business-type, or fiduciary.

4) Governmental funds are identical to governmental activities, proprietary funds are identical to business-type activities, and fiduciary funds are identical to fiduciary activities of a government.

5) Only those governmental and proprietary funds that meet the GASB size criteria for major funds are reported in separate columns of the governmental and proprietary fund financial statements.

6) Economic resources are cash or items expected to be converted into cash during the current period, or soon enough thereafter to pay current period liabilities.

7) Governmental funds account for assets but not the liabilities.

8) The types of funds that may be used in governmental accounting are classified into the three categories of governmental, proprietary, and fiduciary.

9) The governmental funds category includes the General Fund, special revenue funds, debt service funds, capital projects funds, and internal service funds.

10) Governments can, in part, demonstrate operational accountability by reporting proprietary and fiduciary fund financial information, as well as all government-wide financial information, using an economic resources measurement focus and the accrual basis of accounting.

11) All capital assets acquired by or used by a fund should be reported in the fund balance sheet or statement of net position.

12) Because budgetary accounts are used by governments, government financial statements can never be said to be in accord with generally accepted accounting principles.

13) The maximum sets of fund financial statements a government would present are three.

14) When revenues are legally restricted by external resource providers or committed by enabling legislation for particular operating purposes, a private purpose trust fund is created.

15) A debt service fund is used to account for financial resources segregated for the purpose of making principal and interest payments on general long-term debt.

16) A deferred inflow of resources is defined as “an acquisition of net assets by the government that is applicable to a future reporting period.”

17) Expenditures are never recorded in governmental funds.

18) Deferred outflow of resources is a type of asset that is unique to government.

19) Revenues is an example of what the GASB terms an inflow of resources.

20) An expenditure is an example of what the GASB terms an outflow of resources.

21) Deferred inflow of resources and deferred outflow of resources would be shown in separate sections of a government’s statement of net position.

22) In accordance with GASB standards, a deferred inflow of resources is reported on the financial statements the same as an unearned revenue.

23) The GASB concept statements indicate that an asset that is going to be converted to cash should be reported at a remeasured amount at the financial statement date.

24) Proprietary funds primarily provide services to the general public for a fee.

25) A permanent endowment is an example of a nonspendable fund balance.

26) Assigned fund balances can be either positive or negative.

27) The General Fund is the only fund that can have a positive unassigned fund balance.

28) The positive fund balance in a special revenue fund must at a minimum be reported as assigned.

29) Nonmajor funds are not reported on the fund financial statements.

30) There are four major activity categories reported by state and local governments: governmental, government-wide, proprietary, and fiduciary.

31) Governmental activities include the core services provided by a government, such as public safety.

32) Which of the following is a primary objective of financial reporting by state and local governments?

A) To provide information that can be used for capital allocation decisions made by external investors.

B) To report on the legal requirements imposed on the government by its elected officials.

C) To provide information that can be used to assess a government’s accountability.

D) To fulfill the government’s statutory duty to report on cash received and cash disbursed.

33) According to the GASB definition, which of the following represents an inflow of resources?

A) Expenditures.

B) Revenues.

C) Assets.

D) Deferred inflows.

34) According to the GASB, information that is essential and useful to placing information in the correct context should be reported as which of the following?

A) Required supplementary information.

B) Supplementary information.

C) Notes to the financial statements.

D) A line item on the financial statements.

35) Which of the following is not one of the methods recommended by the GASB Concepts Statement 3 for communicating information to external users of government financial reports?

A) Providing a popular report.

B) Recognition in the financial statements.

C) Presentation as required supplementary information.

D) Disclosure in the notes to the financial statements.

36) Which of the following activities is considered a core government activity?

A) Finance and budget.

B) Central purchasing.

C) Culture and recreation.

D) Employee pension fund.

37) Which of the following is true regarding financial reporting for internal service funds?

A) Internal service funds are reported in the governmental fund financial statements.

B) Internal service funds are aggregated and reported as a major fund in the proprietary fund financial statements.

C) Internal service funds are generally reported in the Business-type Activities column of the government-wide financial statements.

D) Internal service funds are generally reported in the Governmental Activities column of the government-wide financial statements.

38) Which of the following is not a characteristic of a fund as defined by GASB standards?

A) An accounting entity.

B) A fiscal entity.

C) A reporting entity.

D) A self-balancing set of accounts.

39) In accounting for state and local governments the modified accrual basis is required for

A) Proprietary and fiduciary funds.

B) Governmental funds.

C) Governmental and fiduciary funds.

D) Governmental and internal service funds.

40) Under the modified accrual basis of accounting, revenues should be recognized when

A) Earned.

B) Collected in cash.

C) Authorized by the budget ordinance.

D) Measurable and available.