TESTBANK g g
FOR
INTRODUCTION TO FUND g g
ACCOUNTING 4TH EDITION NORV g
g
g
ELLE
Chapterg1
ThegGovernmentgandgNot-For-ProfitgEnvironment
TRUE/FALSEg(CHAPTERg1)
1. FgThegmaingobjectivegofgagtypicalggovernmentalgorgnot-for-
profitgentitygisgtogearngagprofit.
2. TAggovernment’sgbudgetgmaygbegbackedgbygthegforcegofglaw.
3. FGovernmentalgentitiesghavegnogneedgforgangaccountinggsystem.
Downloadedgby:gAriahg|
tiongofgthisgdocumentgisgillegal
,4. TAggovernment’sginternalgmanagersgrelygonggeneralgpurposegf
inancialgstatementsgforgaconsiderablegamountgofginformationg
aboutgtheirggovernment.
5. FGovernmentsgandgnot-for-profitsgmaygnevergengagegingbusiness-typegactivities.
6. TLendersgusegthegfinancialgstatementsgofggovernmentsgandgnot-
forgprofitsgjustgasgtheygwouldthosegofgbusinesses,gthatgis,gtoghelpgassessgt
hegborrower’sgcredit-worthiness.
7. TFinancialgstatements,gnogmatterghowgprepared,gdognotgdirectlygaffectg
thegeconomicgworthgofangentity.
8. FThegFinancialgAccountinggStandardsgAdvisorygBoard’sgstandards
gdognotgapplygtogthefederalgDepartmentgofgTreasury.
9. TGovernmentsgmaygbegsubjectgtogthegsamegpressuresgthatgledgtog
accountinggscandalsglikeEnron.
10. FThegGovernmentalgAccountinggStandardsgBoardgestablishesggenerally
gacceptedgaccountingprinciplesgforgallgstategandglocalggovernmentgentiti
es,gasgwellgasgallgnot-for-profitgentities.
MULTIPLEgCHOICEg(CHAPTERg1)
1. Agprimarygcharacteristicgthatgdistinguishesggovernmentalgentitiesgfromgbusinessg
entitiesgis
a) Thegneedgtoggenerategrevenuesgequalgtogorg ingexcessgofg expenditures/expenses.
b) Thegimportancegofgthegbudgetgingtheggoverningg process.
c) Thegneedg togprovideggoodsgorgservices.
d) Thegcorrelationgbetweengrevenuesggeneratedgandgdemandgforggoodsgorgservices.
2. Agprimarygcharacteristicgthatgdistinguishesgnot-for-
profitgentitiesgfromgbusinessgentitiesgis
a) Thegneedgtoggenerategrevenuesgequalgtogorgingexcessgofg
expenditures/expenses.
b) Thegimportancegofgthegbudgetgingtheggoverningg process.
c) Thegneedg togprovideggoodsgorgservices.
d) Thegcorrelationgbetweengrevenuesggeneratedgandgdemandgforggoodsgorg
services.
Pageg1
,3. Whichgofgthegfollowinggcharacteristicsgdistinguishesgaggovernmentalgorg
not-for-profitgentityfromgagbusinessgentity?
a) Theregisgalwaysgagdirectglinkgbetweengrevenuesg
generatedgandexpenditures/expensesgincurred.
b) Capitalgassetsgaregusedgtogproducegrevenuesgandgsavegcosts.
c) Revenuesgaregalwaysg indicativeg ofgdemandgforggoodsg andgservices.
d) Thegmissiongofgthegentitygwillgdeterminegtheggoodsgorgservicesgprovided.
4. Thegmostgsignificantgfinancialgdocumentgprovidedgbygaggovernmentalg entitygisgthe
a) Thegbalancegsheet.
b) Thegoperatinggstatement.
c) Thegoperatinggbudget.
d) Thegcashgflowgstatement.
5. Whichgofgthegfollowinggstatementsgisgtrue?
a) Governmentsgmaygengagegingactivitiesgsimilargtogactivitiesg
engagedgingbygforprofitentities.
b) Theregaregaglimitedgnumbergofgdifferentgtypesgofggovernments.
c) Allggovernmentalgentitiesgengagegingthegsameg activities.
d) Managersgmayghavegaglong-
termgfocusgandgtherebygsacrificegthegshort-
termgliquiditygofthegentity.
6. WhichgofgthegfollowinggactivitiesgisgNOTgangactivitygingwhichgag
governmentalgentitygmightengage?
a) Sellinggelectricgpower.
b) Operatinggaggolfg course.
c) Operatinggagbookstore.
d) Allgofg thegaboveg aregactivitiesgthatg mightg begcarriedgoutgbygaggovernment.
7. Ingwhichgofgthegfollowinggactivitiesgisgagnot-for-
profitgentitygleastglikelygtogengage?
a) Providinggeducationalgservices.
b) Providingghealth-caregservices.
c) Providinggforgterrorismgdefense.
d) Retailgsalesgofgcookies.
8. WhichgofgthegfollowinggcangbegaffectedgbygGAAP?
a) Legalgabilitygtogissuegbonds.
b) Abilitygtogbalancegthegbudget.
c) Amountgreportedgasgemployeegpensiongplangcontributions.
d) Claimsgandgjudgmentsgsettled.
9. Whichgofgthegfollowinggcharacteristicsgisguniquegtogaggovernmentalgentity?
a) Thegabilitygtoghavegactivitiesgfinancedgwithgtax-exemptgdebt.
b) Thegpowergtogimposeg fees.
c) Thegabilitygtogissuegtax-exemptgdebt.
, d) ThegabilitygtoghavegactivitiesgfinancedgbygFederalggrants.
Pageg2
10. Togobtaingagcomprehensivegunderstandinggofgaggovernment’sgfiscalghe
alth,gagfinancialganalystishouldgobtaingangunderstandinggofgwhichgofgth
egfollowing?
a) Allgofgthegresourcesgownedgbygtheggovernmentalgentity.
b) Allgofgthegresourcesgwhichgmaygbegsummonedgbygaggovernmentalgentity.
c) Demographicgdatagaboutgthegresidentsgservedgbygtheggovernmental
gentity.
d) Allgofg thegabove.
11. Whichgofgthegfollowinggisgcommongtogbothggovernmentsgandgnot-
gfor-profitgentitiesgbutidistinguishesgthesegentitiesgfromgfor-
profitgentities?
a) Thegbudgetgisgaglegal,gfinancialgdocument.
b) Revenuesgaregusuallygindicativegofgdemandg forg goodsgorgservices.
c) Theregisgdirectgmatchinggofgrevenuesg andgexpenses.
d) Theregaregnogdefinedgownershipginterests.
12. WhichgofgthegfollowinggisgNOTgagpurposegofgexternalgfinancialgreportinggbyg
governments?
Externalgfinancialgreportsgshouldgallowgusersgto
a) Assessgfinancialgcondition.
b) Comparegactualgresultsgwithgthegbudget.
c) Assessgthegabilitygofgelectedgofficialsgtogeffectivelygmanagegpeople.
d) Evaluategefficiencygandgeffectiveness.
13. WhichgofgthegfollowinggisgNOTgagreasongwhygusersgneedggove
rnmentalgandgnot-for-profitexternalgfinancialgstatements?
a) Togdeterminegthegabilitygofgthegentitygtogmeetgitsgobligations.
b) Togdeterminegthegabilitygofgthegentitygtogcontinuegtogprovidegservices.
c) Togpredictgfuturegfiscalgsolvency.
d) Togevaluategthegoverallgprofitabilitygofgthegentity.
14. Usersgofggovernmentgfinancialgstatementsgshouldgbeginterestedging
informationgaboutcompliancegwithglawsgandgregulationsgforgwhic
hgofgthegfollowinggreasons?
FOR
INTRODUCTION TO FUND g g
ACCOUNTING 4TH EDITION NORV g
g
g
ELLE
Chapterg1
ThegGovernmentgandgNot-For-ProfitgEnvironment
TRUE/FALSEg(CHAPTERg1)
1. FgThegmaingobjectivegofgagtypicalggovernmentalgorgnot-for-
profitgentitygisgtogearngagprofit.
2. TAggovernment’sgbudgetgmaygbegbackedgbygthegforcegofglaw.
3. FGovernmentalgentitiesghavegnogneedgforgangaccountinggsystem.
Downloadedgby:gAriahg|
tiongofgthisgdocumentgisgillegal
,4. TAggovernment’sginternalgmanagersgrelygonggeneralgpurposegf
inancialgstatementsgforgaconsiderablegamountgofginformationg
aboutgtheirggovernment.
5. FGovernmentsgandgnot-for-profitsgmaygnevergengagegingbusiness-typegactivities.
6. TLendersgusegthegfinancialgstatementsgofggovernmentsgandgnot-
forgprofitsgjustgasgtheygwouldthosegofgbusinesses,gthatgis,gtoghelpgassessgt
hegborrower’sgcredit-worthiness.
7. TFinancialgstatements,gnogmatterghowgprepared,gdognotgdirectlygaffectg
thegeconomicgworthgofangentity.
8. FThegFinancialgAccountinggStandardsgAdvisorygBoard’sgstandards
gdognotgapplygtogthefederalgDepartmentgofgTreasury.
9. TGovernmentsgmaygbegsubjectgtogthegsamegpressuresgthatgledgtog
accountinggscandalsglikeEnron.
10. FThegGovernmentalgAccountinggStandardsgBoardgestablishesggenerally
gacceptedgaccountingprinciplesgforgallgstategandglocalggovernmentgentiti
es,gasgwellgasgallgnot-for-profitgentities.
MULTIPLEgCHOICEg(CHAPTERg1)
1. Agprimarygcharacteristicgthatgdistinguishesggovernmentalgentitiesgfromgbusinessg
entitiesgis
a) Thegneedgtoggenerategrevenuesgequalgtogorg ingexcessgofg expenditures/expenses.
b) Thegimportancegofgthegbudgetgingtheggoverningg process.
c) Thegneedg togprovideggoodsgorgservices.
d) Thegcorrelationgbetweengrevenuesggeneratedgandgdemandgforggoodsgorgservices.
2. Agprimarygcharacteristicgthatgdistinguishesgnot-for-
profitgentitiesgfromgbusinessgentitiesgis
a) Thegneedgtoggenerategrevenuesgequalgtogorgingexcessgofg
expenditures/expenses.
b) Thegimportancegofgthegbudgetgingtheggoverningg process.
c) Thegneedg togprovideggoodsgorgservices.
d) Thegcorrelationgbetweengrevenuesggeneratedgandgdemandgforggoodsgorg
services.
Pageg1
,3. Whichgofgthegfollowinggcharacteristicsgdistinguishesgaggovernmentalgorg
not-for-profitgentityfromgagbusinessgentity?
a) Theregisgalwaysgagdirectglinkgbetweengrevenuesg
generatedgandexpenditures/expensesgincurred.
b) Capitalgassetsgaregusedgtogproducegrevenuesgandgsavegcosts.
c) Revenuesgaregalwaysg indicativeg ofgdemandgforggoodsg andgservices.
d) Thegmissiongofgthegentitygwillgdeterminegtheggoodsgorgservicesgprovided.
4. Thegmostgsignificantgfinancialgdocumentgprovidedgbygaggovernmentalg entitygisgthe
a) Thegbalancegsheet.
b) Thegoperatinggstatement.
c) Thegoperatinggbudget.
d) Thegcashgflowgstatement.
5. Whichgofgthegfollowinggstatementsgisgtrue?
a) Governmentsgmaygengagegingactivitiesgsimilargtogactivitiesg
engagedgingbygforprofitentities.
b) Theregaregaglimitedgnumbergofgdifferentgtypesgofggovernments.
c) Allggovernmentalgentitiesgengagegingthegsameg activities.
d) Managersgmayghavegaglong-
termgfocusgandgtherebygsacrificegthegshort-
termgliquiditygofthegentity.
6. WhichgofgthegfollowinggactivitiesgisgNOTgangactivitygingwhichgag
governmentalgentitygmightengage?
a) Sellinggelectricgpower.
b) Operatinggaggolfg course.
c) Operatinggagbookstore.
d) Allgofg thegaboveg aregactivitiesgthatg mightg begcarriedgoutgbygaggovernment.
7. Ingwhichgofgthegfollowinggactivitiesgisgagnot-for-
profitgentitygleastglikelygtogengage?
a) Providinggeducationalgservices.
b) Providingghealth-caregservices.
c) Providinggforgterrorismgdefense.
d) Retailgsalesgofgcookies.
8. WhichgofgthegfollowinggcangbegaffectedgbygGAAP?
a) Legalgabilitygtogissuegbonds.
b) Abilitygtogbalancegthegbudget.
c) Amountgreportedgasgemployeegpensiongplangcontributions.
d) Claimsgandgjudgmentsgsettled.
9. Whichgofgthegfollowinggcharacteristicsgisguniquegtogaggovernmentalgentity?
a) Thegabilitygtoghavegactivitiesgfinancedgwithgtax-exemptgdebt.
b) Thegpowergtogimposeg fees.
c) Thegabilitygtogissuegtax-exemptgdebt.
, d) ThegabilitygtoghavegactivitiesgfinancedgbygFederalggrants.
Pageg2
10. Togobtaingagcomprehensivegunderstandinggofgaggovernment’sgfiscalghe
alth,gagfinancialganalystishouldgobtaingangunderstandinggofgwhichgofgth
egfollowing?
a) Allgofgthegresourcesgownedgbygtheggovernmentalgentity.
b) Allgofgthegresourcesgwhichgmaygbegsummonedgbygaggovernmentalgentity.
c) Demographicgdatagaboutgthegresidentsgservedgbygtheggovernmental
gentity.
d) Allgofg thegabove.
11. Whichgofgthegfollowinggisgcommongtogbothggovernmentsgandgnot-
gfor-profitgentitiesgbutidistinguishesgthesegentitiesgfromgfor-
profitgentities?
a) Thegbudgetgisgaglegal,gfinancialgdocument.
b) Revenuesgaregusuallygindicativegofgdemandg forg goodsgorgservices.
c) Theregisgdirectgmatchinggofgrevenuesg andgexpenses.
d) Theregaregnogdefinedgownershipginterests.
12. WhichgofgthegfollowinggisgNOTgagpurposegofgexternalgfinancialgreportinggbyg
governments?
Externalgfinancialgreportsgshouldgallowgusersgto
a) Assessgfinancialgcondition.
b) Comparegactualgresultsgwithgthegbudget.
c) Assessgthegabilitygofgelectedgofficialsgtogeffectivelygmanagegpeople.
d) Evaluategefficiencygandgeffectiveness.
13. WhichgofgthegfollowinggisgNOTgagreasongwhygusersgneedggove
rnmentalgandgnot-for-profitexternalgfinancialgstatements?
a) Togdeterminegthegabilitygofgthegentitygtogmeetgitsgobligations.
b) Togdeterminegthegabilitygofgthegentitygtogcontinuegtogprovidegservices.
c) Togpredictgfuturegfiscalgsolvency.
d) Togevaluategthegoverallgprofitabilitygofgthegentity.
14. Usersgofggovernmentgfinancialgstatementsgshouldgbeginterestedging
informationgaboutcompliancegwithglawsgandgregulationsgforgwhic
hgofgthegfollowinggreasons?
