49) The FASB requires that a statement showing the relationship of functional expenses to natural
classifications of expense be prepared by which of the following entities?
A) Colleges and universities.
B) Health care entities.
C) Voluntary health and welfare entities.
D) All not-for-profit entities.
50) Which of the following is a net asset category reported by not-for-profit entities?
A) Unrestricted net assets.
B) Net assets with donor restrictions.
C) Temporarily restricted net assets.
D) Net investment in capital assets.
51) Which of the following is not classified as a support activity reported by not-for-profit entities?
A) Fund-raising expenses.
B) Program expenses.
C) Management expenses.
D) General expenses of operating the not-for-profit entity.
52) The FASAB’s Statement of Accounting and Reporting Concepts Statement No. 1 identifies
four objectives of federal financial reporting. The requirement to be publicly accountable for laws
and regulations related to spending tax revenues relates to which of the four objectives?
A) Stewardship.
B) Operating performance.
C) Budgetary integrity.
D) Accountability.
53) Explain the essential differences between general purpose and special purpose governments
and give several examples of each.
54) Identify and explain the characteristics that distinguish governments and not-for-profit entities
from business entities.
55) GASB and FASB standards are concerned only with external financial reporting; whereas,
FASAB standards are concerned with both internal and external financial reporting. Do you agree
with this statement? Why or why not?
56) Why should persons interested in reading financial reports of governments and not-for-profit
entities be familiar with standards set by the GASB and the FASB?
57) Explain in your own words why accountability is the cornerstone of all financial reporting in
government.
58) In your own words state the primary uses the GASB believes external users have for financial
reports of state and local governments. For contrast, state the uses the FASB believes external
users have for the financial reports of not-for-profit organizations.
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59) Describe the difference between a comprehensive annual financial report (CAFR) and GASB
general purpose external financial reporting for state and local governments.
60) Identify and briefly explain the four sections of the performance and accountability report
(PAR) that the Office of Management and Budget requires major federal departments and agencies
to prepare.
61) Explain the concepts fiscal and operational accountability and the basis of accounting used to
capture each concept.
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62) Describe the comprehensive annual financial report (CAFR). What are the sections of the
report and which components of the organization should it include? Is a CAFR required?