Chapter 1 HW

Which of the following is not a required section of a federal agency or department's performance and accountability report (PAR)? -A performance section, which includes an annual performance report (APR). -An MD&A. -A basic financial statements section. -A statement of nonparticipation in political matters.

A statement of nonparticipation in political matters.

The concept of interperiod equity refers to whether -Revenues equaled or exceeded expenses for the year. -Total assets (current and noncurrent) were sufficient to cover total liabilities (current and noncurrent). -Current year revenues were sufficient to pay for current year services. -Future taxpayers can expect to receive the same or higher level of services as current taxpayers.

Current year revenues were sufficient to pay for current year services.

The primary reason that not-for-profit (NFP) organizations should report expenses incurred for program purposes separately from those for supporting services such as management and general and fund-raising is that -GASB standards require it. -Program managers need information about the cost of activities for which they are responsible. -Top managers need to know how much they are spending for nonprogrammatic management and general support. -Donors, potential donors, oversight bodies, and others need to know what percentage of total expenses are being incurred for carrying out the NFP's programs.

Donors, potential donors, oversight bodies, and others need to know what percentage of total expenses are being incurred for carrying out the NFP's programs.

For each of the following entities, identify if the entity would be governed by GASB standards by selecting a "G", FASB standards by selecting an "F", or FASAB standards by selecting an "FB". (Hint: Search the website of the entity listed if you are unsure.) Department of Defense

FASAB

Internal Revenue Service

FASAB

American Cancer Society

FASB

American Institute of Certified Public Accountants

FASB

Mayo Clinic

FASB

The Metropolitan Museum of Art, New York City

FASB

Metropolitan Washington Airports Authority (operates the Washington, DC, airports)

GASB

New York City

GASB

The county in which you live

GASB

What are the components that are included in the minimum requirements for general purpose external financial reporting? -Introductory section, financial section, and statistical section. -MD&A, government-wide financial statements, fund financial statements, notes to the financial statements, and RSI. -Letter from the chief financial officer, government financial statements, notes to the financial statements, and RSI. -MD&A, government-wide financial statements, notes to the financial statements, and RSI.

MD&A, government-wide financial statements, fund financial statements, notes to the financial statements, and RSI.

Which of the following is a special purpose government? -The State of Arkansas. -Greene County. -Minneapolis Public Schools. -City of Seattle.

Minneapolis Public Schools.

Standards set by FASB

No No Yes

Performance & accountability report

No Yes No

Standards set by FASAB

No Yes No

Stewardship is identified as a financial statement purpose

No Yes Yes

James Black is reviewing his city's financial reporting because he wants to run for the city council. He is concerned that the city is not using its resources effectively. James is primarily interested in: -Fiscal accountability. -Social accountability. -Political accountability. -Operational accountability.

Operational accountability.

Which of the following statements is true for both governmental organizations and for-profit organizations? -Lack of a profit motive. -Revenue may be earned through exchange transactions. -Absence of owners. -Resources are provided by individuals and entities that may not directly benefit from the use of the resources.

Revenue may be earned through exchange transactions.

The basic financial statements of a not-for-profit include all of the following except -Statement of financial position. -Statement of activities. -Statement of changes in functional expenses. -Statement of cash flows.

Statement of changes in functional expenses.

Which of the following statements regarding primary sources of accounting and financial reporting standards is false? -The GASB sets standards for all state and local governments. -The FASB sets standards for all business and not-for-profit entities. -The FASB and GASB are administered by the Financial Accounting Foundation. -The FASAB sets standards for the federal government and its agencies and departments.

The FASB sets standards for all business and not-for-profit entities.

Under GASB standards, financial information useful for assessing operational accountability is primarily reported in which financial statements? Government-wide Financial Statements Fund Financial Statements

Yes No

Standards set by GASB

Yes No No

Standards focused on just external users of financial information

Yes No Yes

A concern with budgetary compliance

Yes Yes No

For each characteristic, concept, or financial reporting requirement listed, indicate a Y for yes in the type of organization column if the item applies to that type of organization or N for no if it does not apply. State and Local Governments Federal Government Nongovernmental Not-for-Profit Organizations Accountability is the foundation of financial reporting

Yes Yes No

Management's discussion and analysis (MD&A)

Yes Yes No

Absence of defined ownership interests

Yes Yes Yes