1|P a g e
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, Chapter 1 jk
1) Explain the essential differences between general purpose and special purpose governments and give s
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everal examples of each.
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2) Identify and explain the characteristics that distinguish governments and not-for-
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profit entities from business entities.
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3) GASB and FASB standards are concerned only with external financial reporting; whereas, FASAB st
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andards are concerned with both internal and external financial reporting. Do you agree with this state
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ment? Why or why not?
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4) Why should persons interested in reading financial reports of governments and not-for-
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profit entities be familiar with standards set by the GASB and the FASB?
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5) Explain in your own words why accountability is the cornerstone of all financial reporting in g
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overnment.
2|P a g e
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,6) In your own words state the primary needs the GASB believes external users have for financial reports o
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f state and local governments. For contrast, state the uses the FASB believes external users have for the fin
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ancial reports of not-for-profit organizations.
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7) Describe the difference between a comprehensive annual financial report (CAFR) and GASB general p
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urpose external financial reporting for state and local governments.
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8) Identify and briefly explain the four sections of the performance and accountability report (PAR) that t
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he Office of Management and Budget requires major federal departments and agencies to prepare.
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9) Explain the concepts of fiscal and operational accountability and the basis of accounting used to c
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apture each concept.
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10) Describe the comprehensive annual financial report (CAFR). What are the sections of the report and w
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hich components of the organization should it include? Is a CAFR required?
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3|P a g e
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, 11) The Governmental Accounting Standards Board is assigned responsibility for setting accounting and fi
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nancial reporting standards for which of the following?
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A) Governments such as federal agencies, states, cities, counties, villages, and townships.
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B) State and local government entities and governmentally-
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related units and agencies, such as utilities, authorities, hospitals, and colleges and universities.
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C) Not-for-profit organizations. jk
D) State and local governments and all not-for-profit organizations.
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12) Which of the following bodies has been established to recommend accounting and financial reporting st
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andards for the federal government?
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A) Financial Accounting Standards Board (FASB).
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B) Governmental Accounting Standards Board (GASB). jk jk jk jk
C) Federal Accounting Foundation (FAF).
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D) Federal Accounting Standards Advisory Board (FASAB).
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13) The Financial Accounting Standards Board has the responsibility for setting accounting and financial r
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eporting standards for which of the following?
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A) All not-for-profit organizations that are nongovernmental and business entities.
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B) All not-for-profit organizations and business entities.
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C) All not-for-profit organizations.
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D) Special purpose governments with a business purpose.
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14) You are trying to decide if an entity you are reviewing is a government or a not-for-
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profit. Which of the following would indicate it is a government rather than a not-for-profit entity?
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A) Absence of profit motive. jk jk jk
B) A primary source of revenues is taxes.
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4|P a g e
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, Chapter 1 jk
1) Explain the essential differences between general purpose and special purpose governments and give s
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everal examples of each.
jk jk jk
2) Identify and explain the characteristics that distinguish governments and not-for-
jk jk jk jk jk jk jk jk jk
profit entities from business entities.
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3) GASB and FASB standards are concerned only with external financial reporting; whereas, FASAB st
jk jk jk jk jk jk jk jk jk jk jk jk jk
andards are concerned with both internal and external financial reporting. Do you agree with this state
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ment? Why or why not?
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4) Why should persons interested in reading financial reports of governments and not-for-
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profit entities be familiar with standards set by the GASB and the FASB?
jk jk jk jk jk jk jk jk jk jk jk jk jk
5) Explain in your own words why accountability is the cornerstone of all financial reporting in g
jk jk jk jk jk jk jk jk jk jk jk jk jk jk jk
overnment.
2|P a g e
jk jk jk jk jk
,6) In your own words state the primary needs the GASB believes external users have for financial reports o
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f state and local governments. For contrast, state the uses the FASB believes external users have for the fin
jk jk jk jk jk jk jk jk jk jk jk jk jk jk jk jk jk jk
ancial reports of not-for-profit organizations.
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7) Describe the difference between a comprehensive annual financial report (CAFR) and GASB general p
jk jk jk jk jk jk jk jk jk jk jk jk jk
urpose external financial reporting for state and local governments.
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8) Identify and briefly explain the four sections of the performance and accountability report (PAR) that t
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he Office of Management and Budget requires major federal departments and agencies to prepare.
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9) Explain the concepts of fiscal and operational accountability and the basis of accounting used to c
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apture each concept.
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10) Describe the comprehensive annual financial report (CAFR). What are the sections of the report and w
jk jk jk jk jk jk jk jk jk jk jk jk jk jk jk
hich components of the organization should it include? Is a CAFR required?
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3|P a g e
jk jk jk jk jk
, 11) The Governmental Accounting Standards Board is assigned responsibility for setting accounting and fi
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nancial reporting standards for which of the following?
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A) Governments such as federal agencies, states, cities, counties, villages, and townships.
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B) State and local government entities and governmentally-
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related units and agencies, such as utilities, authorities, hospitals, and colleges and universities.
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C) Not-for-profit organizations. jk
D) State and local governments and all not-for-profit organizations.
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12) Which of the following bodies has been established to recommend accounting and financial reporting st
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andards for the federal government?
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A) Financial Accounting Standards Board (FASB).
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B) Governmental Accounting Standards Board (GASB). jk jk jk jk
C) Federal Accounting Foundation (FAF).
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D) Federal Accounting Standards Advisory Board (FASAB).
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13) The Financial Accounting Standards Board has the responsibility for setting accounting and financial r
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eporting standards for which of the following?
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A) All not-for-profit organizations that are nongovernmental and business entities.
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B) All not-for-profit organizations and business entities.
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C) All not-for-profit organizations.
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D) Special purpose governments with a business purpose.
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14) You are trying to decide if an entity you are reviewing is a government or a not-for-
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profit. Which of the following would indicate it is a government rather than a not-for-profit entity?
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A) Absence of profit motive. jk jk jk
B) A primary source of revenues is taxes.
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4|P a g e
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