Review for Exam 1

Question 1

Differences in the GNP Environment

Answer 1

• Organizational Purposes: .
• Sources of Revenues:
• Potential for Longevity:
• Relationship with Stakeholders:
• Role of the Budget

Question 2

Federal government and agencies

Answer 2

Financial Accounting Standards Advisory Board (FASAB)

Question 3

State and local governments

Answer 3

Governmental Accounting Standards Board (GASB)

Question 4

Private Not-for-Profits

Answer 4

Financial Accounting Standards Board (FASB)

Question 5

The ____ oversees both FASB and GASB

Answer 5

Financial Accounting Foundation

Question 6

How do GASB’s objectives differ from business objectives

Answer 6

• the budget
• legal compliance
• efficiency and effectiveness measures other than net income

Question 7

a fund

Answer 7

represents a part of the activities of some organizations
- is an accounting entity
- segregates resources for specific activities

Question 8

The primary report, Comprehensive Annual Financial Report (CAFR) has three sections

Answer 8

1. Introductory
   - table of contents
   - letter of transmittal
   - organizational chart
   - List of chief government officers
2. Financial section
   - MD&A - paragraph format summary of most important issues during the year
3. Government wide statements
   Net position is recorded in three categories
   - net investment in capital assets
   - restricted
   - unrestricted
   Statement of activities - similar to business income statement

Question 9

permanent funds

Answer 9

Report resources that are restricted to the extent that only earning, not principal, may be used for purposes that support the reporting government’s programs

Question 10

capital projects funds

Answer 10

account for and report financial resources that are restricted, committed or assigned to expenditure for capital outlays. Accounts for the purchase or construction of major capital improvements, except those purchased by a proprietary, and less commonly fiduciary, fund

Question 11

debt service funds

Answer 11

account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest

Question 12

special revenue funds

Answer 12

account for and report the proceeds of specific sources that are restricted or committed (not specifically assigned) to expenditures for specified purpose other than debt or service capital projects

Question 13

General fund

Answer 13

accounts for the most of the basic services provided by the government.

Question 14

Proprietary type funds

Answer 14

business like activities

Question 15

Enterprise fund

Answer 15

a fund established for the purpose of measuring net income for a governmental department providing goods or services primarily to outside consumers, in which it is the intent of the governmental that the department operate on a cost recovery or profitable basis

Question 16

Internal service fund

Answer 16

a fund established for the purpose of measuring net income for a governmental department providing services primarily to other departments or agencies within the government, in which it is the intent of the government that the department operate on a cost-reimbursement basis

Question 17

Fiduciary type

Answer 17

Acting as an agent or trustee of monies that generally belong to other parties

Question 18

Investment trust fund

Answer 18

accounts for the external portion of investment pools governed by a trustee agreement in which the sponsoring government acts as a trustee

Question 19

pension fund

Answer 19

used to account for assets provided to pension trusts. The earnings of theses assets are used to pay the pensions of public (government) employees

Question 20

Private-purpose trust funds

Answer 20

report all other trust arrangements under which principal and income benefit individuals, private organizations, or other governments

Question 21

custodial funds

Answer 21

account for all fiduciary activities, including activities where a trust fund is not in effect