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A) Financial Accounting Standards Board (FASB).
B) Governmental Accounting Standards Board (GASB).
C) Financial Accounting Standards Board (FASB) and the Governmental Accounting
Standards Board (GASB).
D) Financial Accounting Standards Board (FASB), Governmental Accounting
Standards Board (GASB), and the Federal Accounting Standards Advisory Board (FASAB).
41) The federal government prepares a performance and accountability report. The
purpose(s) of the performance and accountability report include which of the following?
A) Help users assess financial performance.
B) Help users assess financial performance and management performance.
C) Help users assess financial performance, management performance, and budgetary
performance.
D) Help users assess financial performance, and budgetary performance.
42) General purpose governments generally provide a wider range of services to their
residents than do special purpose governments.
⊚ true
⊚ false
43) Examples of general purpose governments include cities, towns, and independent public
school districts.
⊚ true
⊚ false
44) 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.
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⊚ true
⊚ false
45) The Governmental Accounting Standards Board (GASB) is the body authorized to
establish accounting principles for all government entities.
⊚ true
⊚ false
46) 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
47) Neither governments nor not-for-profit entities have residual equity that can be
distributed to owners.
⊚ true
⊚ false
48) 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.
⊚ true
⊚ false
49) The needs of users of government financial reports are the same as those of users of
business entity financial reports.
⊚ true
⊚ false
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50) The Federal Accounting Standards Advisory Board (FASAB) recommends accounting
principles and standards for the federal government and its agencies and departments.
⊚ true
⊚ false
51) The FASB, GASB, and FASAB all focus their standards on both internal and external
financial reporting.
⊚ true
⊚ false
52) 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.
⊚ true
⊚ false
53) 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
54) The Financial Accounting Foundation has oversight over both the FASB and the GASB.
⊚ true
⊚ false
55) In addition to financial statements and notes, the GASB requires governments to provide
information on service efforts and accomplishments (SEA) in their reports to the public.
⊚ true
⊚ false
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56) Providing information on accountability is the primary financial reporting objective for
both governments and not-for-profit entities.
⊚ true
⊚ false
57) A difference in the financial reporting objectives for government entities and not-for-
profit entities is that government entities report on compliance with laws, regulations, and rules
that impact financial reports.
⊚ true
⊚ false
58) Since neither governments nor not-for-profit entities have investors, the financial
reporting objectives are the same for both types of entities.
⊚ true
⊚ false
59) The GASB provides optional guidance for those entities providing service efforts and
accomplishments (SEA) reports to the public.
⊚ true
⊚ false
60) The Office of Management and Budget (OMB) requires major federal departments and
agencies to prepare an annual performance report.
⊚ true
⊚ false
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61) The FASB standards require not-for-profit entities to report net assets in three categories:
unrestricted, temporarily restricted, and permanently restricted.
⊚ true
⊚ false
62) The FASB standards require not-for-profit entities to separately report program expenses
and support expenses.
⊚ true
⊚ false
63) The governmental fund financial statements are intended to report on fiscal
accountability.
⊚ true
⊚ false
64) The governmental fund financial statements are useful in assessing operational
accountability.
⊚ true
⊚ false
65) Government-wide financial statements are prepared using the accrual basis of accounting.
⊚ true
⊚ false
66) A public college or university would be an example of a special purpose government.
⊚ true
⊚ false
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67) A primary objective of financial reporting for governments and not-for-profit
organizations is to provide information that can be used in assessing the ability to provide
services.
⊚ true
⊚ false
68) Operational accountability requires providing information that can be used to help assess
whether resources are being used efficiently and effectively.
⊚ true
⊚ false
69) The federal government has an open data website called Open Government that provides
access to state and local data websites.
⊚ true
⊚ false
70) Both the GASB and the FASB require entities to include a management discussion and
analysis in the financial reports.
⊚ true
⊚ false
71) Similar to for-profit entities, net income serves as a good measure of a government’s
performance.
⊚ true
⊚ false
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Answer Key
Test name: chapter 1
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