Homework Chapter 1
Which of the following type of entities prepares both entity-wide and fund financial statements? A. State and local governments B. Business enterprises C. Nonprofit entities D. Federal Government
A. State and local governments
Which of the following type of entities prepares financial statements using both the modified accrual basis of accounting and the accrual basis of accounting? A. State and local governments B. Business enterprises C. Nonprofit entities D. Federal government
A. State and local governments
Why do governments and nonprofit entities use fund accounting? A. To help ensure restricted resources are spent for their intended purpose B. To help limit errors when posting general journal entries to the general ledger C. To allow managers more flexibility when budgeting D. To better match revenues and expenses
A. To help ensure restricted resources are spent for their intended purpose
Which of the following type of entities follows FASAB standards when preparing financial statements? A. State and local governments B. Federal government C. Nonprofit entities D. Business enterprises
B. Federal government
Successful entities prepare budgets. Which of the following entities is generally required by law to prepare a budget? A. Commercial business enterprises B. Governments C. Nonprofit Entities D. All of the above are required by law to prepare a budget
B. Governments
Governments and nonprofit entities are similar in many ways. Which of the following statements is not true? A. Neither governments nor nonprofit entities have a profit motive B. Both governments and nonprofit entities provide services C. Both governments and nonprofit entities assess taxes D. Both governments and nonprofit entities often report restricted resources
C. Both governments and nonprofit entities assess taxes
Which of the following types of entities follow FASB standards when preparing financial statements? A. State and local governments and nonprofit entities B. Business enterprises and the federal government C. Nonprofit entities and business enterprises. D. Federal government and state and local governments
C. Nonprofit entities and business enterprises
Which of the following is generally the major source of revenues for governments? A. Voluntary donations B. Revenue from exchange transactions C. Taxes D. Revenue from investments
C. Taxes
Users of governmental and nonprofit financial reports use financial statements to answer a number of questions. Which of the following can at least partially be answered by reading a government or nonprofit's financial statements? A. Does the entity have sufficient financial resources to provide a reasonable cushion against near-term revenue shortfalls caused by economic contraction B. What is the likelihood of the entity's ability to pay its short-term and long-term financial obligations C. What is the entity's ability to continue to provide a particular level of service D. Financial statements can be used to answer all of the aforementioned questions E. None of the above
D. Financial statements can be used to answer all of the aforementioned questions
Which of the following type of entities commonly uses fund accounting for internal purposes? A. State and local governments B. Business enterprises C. Nonprofit entities D. Both a and b E. Both a and c
E. Both a and c