EXAM 1 GNP 2024

Question 1

Which of the following is correct with respect to proprietary funds?

A. Proprietary fund transactions are predominantly nonexchange in nature
B. Proprietary funds must be adjusted when preparing the government-wide statements
C. Proprietary funds are required to set prices for goods or services equal to the cost to provide those goods or services
D. Proprietary funds use the economic resource measurement focus and accrual basis of accounting

Answer 1

Answer is D

Question 2

Which of the following statements is correct?

A. Governmental funds must prepare a Statement of Revenue, Expenditures and Changes in Fund Balance, Statement of Fund Balance and Statement of Cash Flows. RSI is optional.
B. Government-wide statements include data from Fiduciary and Proprietary Funds
C. Fiduciary funds must prepare a Statement of Fiduciary Net Assets, Statement of Changes in Fiduciary Net Assets, Statement of Cash Flows and RSI.
D. Proprietary funds must prepare a Statement of Revenues, Expenses and Changes in Fund Net Position, Statement of Net Position and Statement of Cash Flows.

Answer 2

Answer is D

Question 3

The Federal Accounting Standards Advisory Board (FASAB) has the authority to establish accounting and financial reporting standards for:

A. Investor owned business
B. State and local governments
C. Federal government agencies
D. Private not-for-profits

Answer 3

Answer is C

Question 4

Which of the following is correct with respect to Debt Service Funds?

A. Debt service funds account for and report financial resources that are restricted, committed, or assigned to an expenditure for principal and interest for governmental debts except debt of proprietary and fiduciary funds who account for their own interest and principal payments.
B. Debt service funds report the balance of governmental debts except debt of proprietary and fiduciary funds.
C. Debt service funds must accrue interest on long-term debt at year end.
D. Debt service funds account for and report financial resources that are restricted, committed or assigned to expenditure for principal and interest for all governmental long-term debt

Answer 4

Answer is A

Question 5

Which of the following is correct with respect to Fiduciary Funds?

A. Fiduciary funds use the current financial resources measurement focus and accrual accounting.
B. Fiduciary funds must be adjusted when preparing the government-wide statements.
C. Custodial funds are fiduciary funds which are used when resources are held by a government in a trustee capacity but no trust agreement is in place.
D. Fiduciary funds include Pension trust funds, Internal service funds, Private-purpose trust funds, and investment trust funds.

Answer 5

Answer is C

Question 6

Which of the following are governmental funds?

A. General, special revenue, debt service, capital projects, private purpose
B. General, special revenue, debt service, capital projects
C. General, special revenue, debt service, capital projects, enterprise
D. General, special revenue, debt service, capital projects, permanent

Answer 6

D is the answer

Question 7

Governmental funds use the:

A. Economic resources measurement focus and accrual basis of accounting.
B. Economic resources measurement focus and modified accrual basis of accounting
C. Current financial resources measurement focus and modified accrual basis of accounting
D. Current financial resources measurement focus and accrual basis of accounting

Answer 7

C is the answer

Question 8

The GASB sets accounting standards for all of the following except:

A. Component units owned or controlled by governments
B. Governmentally related not-for-profit universities
C. State and local governments
D. Private not-for-profit hospitals

Answer 8

The answer is D

Question 9

What are Internal Service funds used for?

A. To account for pension and employee benefit funds for which the governmental unit is the trustee.
B. To account for resources provided primarily through the use of sales and service charges to other departments in the government.
C. To report resources that are legally restricted so only earnings, not principal, may be expended, and for purposes to benefit the government and its citizenry
D. To account for resources provided primarily through the use of sales and service charges to parties external to the government.

Answer 9

The answer is B

Question 10

Level “A” GAAP for a public university, would be established by the:

A. American Institute of Certified Public Accountants
B. National Association of College and University Business Officers
C. Governmental Accounting Standards Board
D. Financial Accounting Standards Board

Answer 10

Answer is C

Question 11

FASAB, GASB and FASB standards are set forth primarily in documents called statements.

Answer 11

True

Question 12

Internal service funds are treated as governmental activities in the government-wide statements if the principal customers are other departments within the General Fund.

Answer 12

True

Question 13

The GASB Concept Statement on service Efforts and Accomplishments reporting encourages state and local governments to include inputs of nonmonetary resources in their financial reporting

Answer 13

True

Question 14

The format and content of supplementary information which is not required by GASB is up to discretion of the reporting entity.

Answer 14

False

Question 15

Fiduciary funds include custodial, pension trust, investment trust, and permanent funds.

Answer 15

False

Question 16

According to GASB standards relating to Budgetary Accounting, budgetary comparisons should be included in the appropriate financial statements or schedules for governmental funds for which an annual budget has been adopted.

Answer 16

True

Question 17

The GASB published a white paper which identifies five environmental differences between governments and for-profit enterprises.

Answer 17

True

Question 18

State and local governments may use as many as twelve different fund types.

Answer 18

False

Question 19

Comparison of the legally approved budget with actual results of the General Fund is included as part of required supplementary information in the CAFR.

Answer 19

True

Question 20

Under the accrual basis of accounting, revenues are recognized when measurable and available to finance expenditures of the current period.

Answer 20

False

Question 21

The Financial Accounting Foundation (FAF) has oversight over the GASB but not the FASB.

Answer 21

False

Question 22

The FASAB requires more financial statements than are typically required of state and local governments.

Answer 22

True

Question 23

The FASAB requires more financial statements than are typically required of state and local governments.

Answer 23

True

Question 24

The Governmental Accounting Standards Board sets financial reporting standards for all units of government: federal, state, and local.

Answer 24

False

Question 25

Governments must have as many funds as necessary to fulfill legal requirements and sound financial administration but must have at a minimum a General Fund.

Answer 25

True

Question 26

For most state and local governments, the budget, when adopted according to procedures specified by state laws, is not binding upon the administrators of a governmental unit.

Answer 26

False

Question 27

Depreciation on capital assets is included as an expense in the Statement of Revenues, Expenses, and Changes in Fund Net Position in the proprietary fund financial statements.

Answer 27

True

Question 28

The GASB does not require supplementary information to be reported with its financial statements even if it is essential to establish appropriate context for the financial statements and notes.

Answer 28

False