Solution Manual for Government And Not For Profit Accounting Concepts And Practices 9th Edition by Michael H. Granof | All Chapters Fully Covered | Comprehensive Practice Questions & Verified Answers 2026/2027

CreatedABy:AAASolutionA




SOLUTION MANUAL FOR GOVERNMENT AND NOT FOR
PROFIT ACCOUNTING CONCEPTS AND PRACTICES 9TH
EDITION MICHAEL H. GRANOF|LATEST UPDATED
VERSION 2024.A+




https://www.stuvia.com/user/asolution

,CreatedABy:AAASolutionA


Chapter 1 A




The Government and Not-For-Profit Environment
A A A A




QuestionsAforAReviewAandADiscussion
A




1. TheAcriticalAdistinctionAbetweenAfor-profitAbusinessesAandAnot-for-
profitsAincludingAgovernmentsAisAthatAbusinessesAhaveAprofitAasAtheirAmainAmotiveAwhereasAtheAot
hersAhaveAservice.AAAprimaryApurposeAofAfinancialAreportingAisAtoAreportAonAanAentity‘sAaccompli
shmentsA—
howAwellAitAachievedAitsAobjectives.AAccordingly,AtheAfinancialAstatementsAofAbusinessesAmeasur
A



eAprofitability,AtheirAkeyAobjective.AFinancialAreportsAofAgovernmentsAandAotherAnot-for-
profitsAshouldAnotAfocusAonAprofitability,AsinceAitAisAnotAaArelevantAobjective.AIdeally,Atherefore,At
heyAshouldAfocusAonAotherAperformanceAobjectives,AsuchAasAhowAwellAtheAorganizationsAmetAtheir
serviceAgoals.AInAreality,Ahowever,AtheAgoalAofAreportingAonAhowAwellAtheyAhaveAachievedAsuchA
A



goalsAhasAprovenAdifficultAtoAattainAandAtheAfinancialAreportsAhaveAfocusedAmainlyAonAfinancially-
relatedAdata.
A




2. GovernmentsAandAnot-for-
profitsAareA―governed‖AbyAtheAbudget,AwhereasAbusinessesAareAgovernedAbyAtheAmarketplace.ATh
eAbudgetAisAtheAkeyApoliticalAandAfiscalAdocumentAofAgovernmentsAandAnot-for-
profits.AItAdeterminesAhowAanAentityAobtainsAitsAresourcesAandAhowAitAallocatesAthem.AItAencapsula
tesAmostAkeyAdecisionsAofAconsequenceAmadeAbyAtheAorganization.AInAaAgovernmentAtheAbudgetAis
notAmerelyAaAmanagerialAdocument;AitAisAtheAlaw.
A




3.
OwingAtoAtheAsignificanceAofAtheAbudget,AconstituentsAwantAassuranceAthatAtheAentityAachi
evesAitsArevenueAestimatesAandAcompliesAwithAitsAspendingAmandates.ATheyAexpectAtheAfinancialA
statementsAtoAreportAonAhowAtheAbudgetAwasAadministered.




https://www.stuvia.com/user/asolution

,CreatedABy:AAASolutionA


4.
InterperiodAequityAisAtheAconceptAthatAtaxpayersAofAtodayApayAforAtheAservicesAthatAtheyAre
ceiveAandAnotAshiftAtheApaymentAburdenAtoAtaxpayersAofAtheAfuture.AFinancialAreportingAmustAindi
cateAtheAextentAtoAwhichAinterperiodAequityAhasAbeenAachieved.ATherefore,AitAmustAdetermineAand
reportAuponAtheAeconomicAcostsAofAtheAservicesAperformedA(notAmerelyAtheAcashAcosts)AandAofAth
A



eAtaxpayers‘AcontributionAtowardAcoveringAthoseAcosts.


5. TheAmatchingAconceptAmayAbeAlessArelevantAforAgovernmentsAandAnot-for-
profitsAthanAforAbusinessesAbecauseAthereAmayAbeAnoAconnectionAbetweenArevenuesAgeneratedAan
dAtheAquantity,AqualityAorAcostAofAservicesAperformed.AAnAincreaseAinAtheAdemandAfor,AorAcostAof,A
servicesAprovidedAbyAaAhomelessAshelterAwouldAnotAnecessarilyAresultAinAanAincreaseAinAtheAamou
ntAofAdonationsAthatAitAreceives.AOfAcourse,AgovernmentsAandAnot-Afor-
profitsAareAconcernedAwithAmeasuringAinterperiodAequityAandAforAthatApurposeAtheAmatchingAconc
eptAmayAbeAveryArelevant.


6.
GovernmentsAmustAmaintainAanAaccountingAsystemAthatAassuresAthatArestrictedAresourcesA
areAnotAinadvertentlyAexpendedAforAinappropriateApurposes.AMoreover,AstatementAusersAmayAneed
separateAinformationAonAtheArestrictedAresourcesAbyAcategoryAofArestrictionAandAtheAunrestrictedAr
A



esources.AInApractice,AtheseArequirementsAhaveAledAgovernmentsAtoAadoptAaAsystemAofA―fund‖Aac
countingAandAreporting.


7.
EvenAgovernmentsAwithinAtheAsameAcategoryAmayAengageAinAdifferentAtypesAofAactivities.A
ForAexample,AsomeAcitiesAoperateAaAschoolAsystemAwhereasAothersAdoAnot.AThoseAthatAareAnotAwit
hinAtheAsameAcategoryAmayAhaveArelativelyAlittleAinAcommon.AForAexample,AaAstateAgovernmentAs
haresAfewAcharacteristicsAwithAaAcity.


8.
IfAaAgovernmentAhasAtheApowerAtoAtax,AthenAitAhasAcommandAover,AandAaccessAto,Aresource
s.ATherefore,AitsAfiscalAwell-



https://www.stuvia.com/user/asolution

, CreatedABy:AAASolutionA


beingAcannotAbeAassessedAmerelyAbyAmeasuringAtheAAAassetsAAAthatAAAitAAA―owns.‖AAForAAAexample,A
AA theAAfiscalAAconditionAAofAAaAAcityAAshouldAincorporateAtheAwealthAofAtheAresidentsAandAbusinesses
withinAtheAcity,AtheirAearningAcapacity,AandAtheAcity‘sAwillingnessAtoAexploitAitsAtaxAbase.
A




9. ManyAgovernmentsAbudgetAonAaAcashAorAnear-
cashAbasis.AHowever,AtheAcashAbasisAofAaccountingAdoesAnotAprovideAadequateAinformationAwithA
whichAtoAassessAinterperiodAequity.AFinancialAstatementsAthatAsatisfyAtheAobjectiveAofAreportingAo
nAinterperiodAequityAmayAnotAsatisfyAthatAofAreportingAonAbudgetaryAcompliance.AMoreover,Astate
mentsAthatAreportAonAeitherAinterperiodAequityAorAbudgetaryAcomplianceAareAunlikelyAtoAprovideAs
ufficientAinformationAwithAwhichAtoAassessAserviceAeffortsAandAaccomplishments.


10.
MeasuresAofAserviceAeffortsAandAaccomplishmentsAareAmoreAsignificantAinAgovernmentsAa
ndAnot-for-
profitsAbecauseAtheirAobjectivesAareAtoAprovideAservice.AByAcontrast,AtheAobjectiveAofAbusinessesAi
sAtoAearnAaAprofit.ATherefore,AbusinessesAcanAreportAonAtheirAaccomplishmentsAbyAreportingAonAth
eirAprofitability.AGovernmentsAandAnot-for-
profitsAmustAreportAonAotherAmeasuresAofAaccomplishment.


11.
TheAFASBAinfluencesAgenerallyAacceptedAaccountingAprinciplesAofAgovernmentsAinAtwoAk
eyAways.AFirst,AFASBApronouncementsAareAincludedAinAtheAGASBA―hierarchy‖AofAGAAP.AFAS
BApronouncementsAthatAtheAGASBAhasAspecificallyAmadeAapplicableAtoAgovernmentsAareAinclude
dAinAtheAhighestAcategory;AthoseAthatAtheAGASBAhasAnotAspecificallyAadoptedAareAincludedAinAtheA
lowestAcategory.ASecond,AtheAbusiness-
typeAactivitiesAofAgovernmentsAareArequiredA(withAaAfewAexceptions)AtoAfollowAtheAbusinessAacco
untingAprinciplesAasAsetAforthAbyAtheAFASB.


2-2
12.
A



ItAisAmoreAdifficultAtoAdistinguishAbetweenAinternalAandAexternalAusersAinAgovernmentsAtha



https://www.stuvia.com/user/asolution