Test Bank for Accounting for Governmental and Nonprofit Entities 16t
Edition by Reck
, Chapter 02
Principles of Accounting and Financial Reporting for State and Loca
Governments
True / False Questions
1. Governmental funds are further classified as governmental or business-
type.
True False
2. Governmental funds are identical to governmental activities, proprietary
funds are identical to business-type activities, and fiduciary funds are
identical to fiduciary activities of a government.
True False
3. An objective of the accounting system for a state or a local government is
to make it possible both to present fairly the funds and activities of the
government in conformity with generally accepted accounting principles
and to demonstrate compliance with finance-related legal and
contractual provisions.
True False
Full all chapters instant download please go to Solutions Manual, Test Bank site: downloadlink.org
,4. Individual fund financial information is reported in separate columns of
governmental and proprietary fund financial statements for only those
funds that meet the GASB size-related criteria as major funds.
True False
5. Economic resources are cash or items expected to be converted into cash
during the current period, or soon enough thereafter to pay current
period liabilities.
True False
6. Governmental funds account for assets but not the liabilities.
True False
7. The types of funds that may be used in governmental accounting are
classified into the three categories of governmental, proprietary, and
fiduciary.
True False
8. The governmental funds category includes the General Fund, special
revenue funds, debt service funds, capital projects funds, and internal
service funds.
True False
9. Governments can, in part, demonstrate operational accountability by
reporting proprietary and fiduciary fund financial information, as well as
all government-wide financial information, using an economic resources
measurement focus and the accrual basis of accounting.
True False
10. All capital assets acquired by or used by a fund should be reported in
the fund balance sheet or statement of net position.
True False
11. Because budgetary accounts are used by governments, their financial
statements can never be said to be in accord with generally accepted
accounting principles.
, True False
12. Governments must present three sets of fund financial statements.
True False
13. When revenues are legally restricted by external resource providers or
committed by enabling legislation for particular operating purposes, a
private purpose trust fund is created.
True False
14. A debt service fund is used to account for financial resources
segregated for the purpose of making principal and interest payments on
general long-term debt.
True False
15. A deferred inflow is defined as “an acquisition of net assets by the
government that is applicable to a future reporting period.”
True False
16. Expenditures are never recorded in governmental funds.
True False
Multiple Choice Questions
17. The accounting system used by a state or local government must make
it possible
A. To present fairly the financial position and results of financial operations of the
government as a whole, as well as fund financial activity in conformity with
GAAP.
Edition by Reck
, Chapter 02
Principles of Accounting and Financial Reporting for State and Loca
Governments
True / False Questions
1. Governmental funds are further classified as governmental or business-
type.
True False
2. Governmental funds are identical to governmental activities, proprietary
funds are identical to business-type activities, and fiduciary funds are
identical to fiduciary activities of a government.
True False
3. An objective of the accounting system for a state or a local government is
to make it possible both to present fairly the funds and activities of the
government in conformity with generally accepted accounting principles
and to demonstrate compliance with finance-related legal and
contractual provisions.
True False
Full all chapters instant download please go to Solutions Manual, Test Bank site: downloadlink.org
,4. Individual fund financial information is reported in separate columns of
governmental and proprietary fund financial statements for only those
funds that meet the GASB size-related criteria as major funds.
True False
5. Economic resources are cash or items expected to be converted into cash
during the current period, or soon enough thereafter to pay current
period liabilities.
True False
6. Governmental funds account for assets but not the liabilities.
True False
7. The types of funds that may be used in governmental accounting are
classified into the three categories of governmental, proprietary, and
fiduciary.
True False
8. The governmental funds category includes the General Fund, special
revenue funds, debt service funds, capital projects funds, and internal
service funds.
True False
9. Governments can, in part, demonstrate operational accountability by
reporting proprietary and fiduciary fund financial information, as well as
all government-wide financial information, using an economic resources
measurement focus and the accrual basis of accounting.
True False
10. All capital assets acquired by or used by a fund should be reported in
the fund balance sheet or statement of net position.
True False
11. Because budgetary accounts are used by governments, their financial
statements can never be said to be in accord with generally accepted
accounting principles.
, True False
12. Governments must present three sets of fund financial statements.
True False
13. When revenues are legally restricted by external resource providers or
committed by enabling legislation for particular operating purposes, a
private purpose trust fund is created.
True False
14. A debt service fund is used to account for financial resources
segregated for the purpose of making principal and interest payments on
general long-term debt.
True False
15. A deferred inflow is defined as “an acquisition of net assets by the
government that is applicable to a future reporting period.”
True False
16. Expenditures are never recorded in governmental funds.
True False
Multiple Choice Questions
17. The accounting system used by a state or local government must make
it possible
A. To present fairly the financial position and results of financial operations of the
government as a whole, as well as fund financial activity in conformity with
GAAP.
