Government & Not-for-Profit Accounting Exam 1 Latest
2023 Solved Correctly
How do Government & Not-for-Profit practices differ from business practices?
- Different purposes in society
- Management has special duty to be accountable for how resources are used in
providing services
- Financed by providers who do not expect benefits proportional to the resources they
provide.
What are the two type of governments and what services do they provide?
1) General Purpose
- Federal, state, and local governments
2) Special purpose
- School systems, public colleges, universities,
hospitals, fire protection districts, etc.
Characteristics of Government and Not-for-Profit Organizations
- Organization lacks profit motive
- Absence of Transferable Ownership Rights
Characteristics of Government
- Power rests in the hands of the people
- People delegate power to public officials through elections
- Empowered by and accountable to a higher level government
- Power to tax
FASAB
Financial Accounting Standards Accounting Board
- Federal Government and its agencies and departments
GASB
Governmental Accounting Standards Board
- State and local governments and governmental not-for-profits
FASB
Financial Accounting Standards Board
- Business organizations and non-governmental not-for profits
Accountability
The requirement of governments to answer to citizens to justify the raising of public
resources and the purposes for which they are used.
Inter-period Equity
A government's obligation to disclose whether current-year revenues were sufficient to
pay for current-year benefits or will future taxpayers be required to pay for them
instead?
What are governmental financial reports primarily used for?
- To COMPARE actual financial results with the legally adopted budget
- To ASSESS financial conditions and results of operations
- To ASSIST in determining compliance with finance-related laws, rules, and
, regulations.
- To EVALUATE efficiency and effectiveness
What are the two types of governmental financial statements?
1) Government Wide
- Aggregate Overview of Net Position and
Change in Net Position
2) Fund
- Detailed Financial Information
Characteristics of Government Wide Financial Statements
- Operational Accountability: Whether the government has used its resources efficiently
and effectively in meeting service objectives.
- Focuses on flow of economic resources
- Uses the accrual basis of accounting
Characteristics of Fund Financial Statements
- Fiscal Accountability: Whether the government raised and spend financial resources in
accordance with budgetary legal and regulatory constraints.
- Uses the modified accrual basis of accounting
Modified Accrual
- Revenues recognized when measurable and available for spending
- Expenditures recognized when an obligation is incurred that will be paid from currently
available financial resources.
CAFR
Comprehensive Annual Financial Report
- Provides more detail than required
- Prepared in conformity with GASB
What are the three sections of the CAFR and what does each section contain?
1) Introductory
- Title Page
- Table of Contents
- Letter of Transmittal
2) Financial
- Auditor's Report
- Management's Discussion and Analysis
(MD&A)
- Required Supplementary Information
- Combined and Individual Fund Statements
and Schedules
Activities of Government
- Governmental Activities
- Business-Type Activities
- Fiduciary Activities
Net Position
= Assets + Deferred Outflows - Liabilities - Deferred Inflows
- Assets provide service today
- Deferred outflows are not assets but function
like them
2023 Solved Correctly
How do Government & Not-for-Profit practices differ from business practices?
- Different purposes in society
- Management has special duty to be accountable for how resources are used in
providing services
- Financed by providers who do not expect benefits proportional to the resources they
provide.
What are the two type of governments and what services do they provide?
1) General Purpose
- Federal, state, and local governments
2) Special purpose
- School systems, public colleges, universities,
hospitals, fire protection districts, etc.
Characteristics of Government and Not-for-Profit Organizations
- Organization lacks profit motive
- Absence of Transferable Ownership Rights
Characteristics of Government
- Power rests in the hands of the people
- People delegate power to public officials through elections
- Empowered by and accountable to a higher level government
- Power to tax
FASAB
Financial Accounting Standards Accounting Board
- Federal Government and its agencies and departments
GASB
Governmental Accounting Standards Board
- State and local governments and governmental not-for-profits
FASB
Financial Accounting Standards Board
- Business organizations and non-governmental not-for profits
Accountability
The requirement of governments to answer to citizens to justify the raising of public
resources and the purposes for which they are used.
Inter-period Equity
A government's obligation to disclose whether current-year revenues were sufficient to
pay for current-year benefits or will future taxpayers be required to pay for them
instead?
What are governmental financial reports primarily used for?
- To COMPARE actual financial results with the legally adopted budget
- To ASSESS financial conditions and results of operations
- To ASSIST in determining compliance with finance-related laws, rules, and
, regulations.
- To EVALUATE efficiency and effectiveness
What are the two types of governmental financial statements?
1) Government Wide
- Aggregate Overview of Net Position and
Change in Net Position
2) Fund
- Detailed Financial Information
Characteristics of Government Wide Financial Statements
- Operational Accountability: Whether the government has used its resources efficiently
and effectively in meeting service objectives.
- Focuses on flow of economic resources
- Uses the accrual basis of accounting
Characteristics of Fund Financial Statements
- Fiscal Accountability: Whether the government raised and spend financial resources in
accordance with budgetary legal and regulatory constraints.
- Uses the modified accrual basis of accounting
Modified Accrual
- Revenues recognized when measurable and available for spending
- Expenditures recognized when an obligation is incurred that will be paid from currently
available financial resources.
CAFR
Comprehensive Annual Financial Report
- Provides more detail than required
- Prepared in conformity with GASB
What are the three sections of the CAFR and what does each section contain?
1) Introductory
- Title Page
- Table of Contents
- Letter of Transmittal
2) Financial
- Auditor's Report
- Management's Discussion and Analysis
(MD&A)
- Required Supplementary Information
- Combined and Individual Fund Statements
and Schedules
Activities of Government
- Governmental Activities
- Business-Type Activities
- Fiduciary Activities
Net Position
= Assets + Deferred Outflows - Liabilities - Deferred Inflows
- Assets provide service today
- Deferred outflows are not assets but function
like them
