Test Bank for Government and not for Profit Accounting Concepts and Practices 9th Edition by Michael H. Granof all chapters 1-10 covered, ISBN:9781119803898

Test Bank
Government and not for Profit
Accounting Concepts and Practices
9th Edition by Michael H. Granof

, Chapterc1
ThecGovernmentcandcNot-For-ProfitcEnvironment


TRUE/FALSEc(CHAPTERc1)

1. Thecmaincobjectivecofcactypicalcgovernmentcorcnot-for-profitcentitycisctocearncacprofit.

2. Acgovernment‘scbudgetcmaycbecbackedcbycthecforcecofclaw.

3. Governmentschavecnocneedcforcancaccountingcsystem.

4. Acgovernment‘scinternalcmanagerscrelyconcgeneralcpurposecfinancialcstatementscforca
considerablecamountcofcinformationcaboutctheircgovernment.

5. Governmentscandcnot-for-profitcentitiescmaycnevercengagecincbusiness-typecactivities.

6. Lenderscusecthecfinancialcstatementscofcgovernmentscandcnot-for-profitcentitiescjustcascthey
wouldcthosecofcbusinesses,cthatcis,ctochelpcassesscthecborrower‘sccredit-worthiness.

7. Financialcstatements,cnocmatterchowcprepared,cdocnotcdirectlycaffectcthececonomiccworthcofc
ancentity.

8. ThecFederalcAccountingcStandardscAdvisorycBoard‘scstandardscdocnotcapplyctocthecfederal
DepartmentcofcthecTreasury.

9. Governmentscmaycbecsubjectctocthecsamecpressurescthatcledctocaccountingcscandalsclike
c Enron.



10. ThecGovernmentalcAccountingcStandardscBoardcestablishescgenerallycacceptedcaccountingc
principlescforcallcstatecandclocalcgovernmentscandcallcnot-for-profitcentities.




GranofcTestcBankcChapterc1 Pagec1

,MULTIPLEcCHOICEc(CHAPTERc1)

1. Acprimaryccharacteristiccthatcdistinguishesc governmentscfromcbusinessescis
a) Thecneedctocgeneratecrevenuescequalctocorcincexcesscofcexpenditures/expenses.
b) Thecimportancecofcthecbudgetcincthecgoverningcprocess.
c) Thecneedctocprovidecgoodscorcservices.
d) Theccorrelationcbetweencrevenuescgeneratedcandcdemandcforcgoodscorcservices.

2. Acprimaryccharacteristiccthatcdistinguishescnot-for-profitcentitiescfromcbusinessescis
a) Thecneedctocgeneratecrevenuescequalctocorcincexcesscofcexpenditures/expenses.
b) Thecimportancecofcthecbudgetcincthecgoverningcprocess.
c) Thecneedctocprovidecgoodscorcservices.
d) Theccorrelationcbetweencrevenuescgeneratedcandcdemandcforcgoodscorcservices.

3. Whichcofcthecfollowingccharacteristicscdistinguishescacgovernmentcorcnot-for-
profitcentityc fromcacbusiness?
a) Thereciscalwayscacdirectclinkcbetweencrevenuescgeneratedcandcexpenditures/expensesc
incurred.
b) Capitalcassetscarecusedctocproducecrevenuescandcsaveccosts.
c) Revenuescarecalwayscindicativecofcdemandcforcgoodscandcservices.
d) Thecmissioncofcthecentitycwillcdeterminecthecgoodscorcservicescprovided.

4. Thecmostc significantcfinancialcdocumentcprovidedc bycacgovernmentciscthe
a) Balancecsheet.
b) Operatingcstatement.
c) Operatingcbudget.
d) Cashcflowcstatement.

5. Whichcofcthecfollowingcstatementscisctrue?
a) Governmentscmaycengagecincactivitiescsimilarctocactivitiescengagedcin cbycfor-
profitc entities.
b) Therecarecaclimitedcnumbercofcdifferentctypescofcgovernments.
c) Allcgovernmentscengagecincthecsamecactivities.
d) Managerscmaychavecaclong-termcfocuscandctherebycsacrificecthecshort-
termcliquiditycofc thecentity.

6. WhichcofcthecfollowingcactivitiesciscNOTcancactivitycincwhichcacgovernmentcmightcengage?
a) Sellingcelectriccpower.
b) Operatingcacgolfccourse.
c) Operatingcacbookstore.
d) Allcofcthecabovecarecactivitiescthatcmightcbeccarriedcoutcbycacgovernment.

7. Incwhichcofcthecfollowingcactivitiesciscacnot-for-profitcentitycleastclikelyctocengage?
a) Providingceducationalcservices.
b) Providingchealth-carecservices.
c) Providingcforcterrorismcdefense.
d) Retailcsalescofccookies.




GranofcTestcBankcChapterc1 Pagec2

, 8. WhichcofcthecfollowingccancbecaffectedcbycGAAP?
a) Legalcabilityctocissuecbonds.
b) Abilityctocbalancecthecbudget.
c) Amountcreportedcascemployeecpensioncplanccontributions.
d) Claimscandcjudgmentscsettled.

9. Whichcofcthecfollowingccharacteristicsciscuniquectocgovernments?
a) Thecabilityctochavecactivitiescfinancedcwithctax-exemptcdebt.
b) Thecpowerctocimposec fees.
c) Thecabilityctocissuectax-exemptcdebt.
d) ThecabilityctochavecactivitiescfinancedcbycFederalcgrants.

10. Tocobtaincaccomprehensivecunderstandingcofcacgovernment‘scfiscalchealth,cacfinancialcanalyst
shouldcobtaincancunderstandingcofcwhichcofcthecfollowing?
a) Allcthecresourcescownedcbycthecgovernment.
b) Allcthecresourcescthatcmaycbecsummonedcbycthecgovernment.
c) Demographiccdatacaboutcthecresidentscservedcbycthecgovernment.
d) Allcofcthecabove.

11. Whichcofcthecfollowingcisccommonctocbothcgovernmentscandcnot-for-
profitcentitiescbutc distinguishescthesecentitiescfromcfor-profitcentities?
a) Thecbudgetciscaclegal,c financialcdocument.
b) Revenuescarecusuallycindicativecofcdemandcforcgoodscorc services.
c) Thereciscdirectcmatchingcofcrevenuescandcexpenses.
d) Therecarecnocdefinedcownershipcinterests.

12. WhichcofcthecfollowingciscNOTcacpurposecofcexternalcfinancialcreportingcbycgovernments?
Externalcfinancialcreportscshouldcallowcuserscto
a) Assesscfinancialccondition.
b) Comparecactualcresultscwithcthecbudget.
c) Assesscthecabilitycofcelectedcofficialsctoceffectivelycmanagecpeople.
d) Evaluatecefficiencycandceffectiveness.

13. WhichcofcthecfollowingciscNOTcacreasoncwhycusersc needcgovernmentcandcnot-for-
profitc externalcfinancialcstatements?
a) Tocdeterminecthecabilitycofcthecentityctocmeetcitscobligations.
b) Tocdeterminecthecabilitycofcthecentityctoccontinuectocprovidecservices.
c) Tocpredictcfuturecfiscalcsolvency.
d) Tocevaluatecthecoverallcprofitabilitycofcthecentity.

14. Userscofcgovernmentcfinancialcstatementscshouldc becinterestedcincinformationcaboutc
compliancecwithclawscandcregulationscforcwhichcofcthecfollowingcreasons?
a) Tocdeterminecifcthecgovernmentchasccompliedcwithcbondccovenants.
b) Tocdeterminecifcthecgovernmentchasccompliedcwithctaxingclimitations.
c) Tocdeterminecifcthecgovernmentchasccompliedcwithcdonorcrestrictionsconcthecusecofcfunds.
d) Tocdeterminecallcofcthecabove.




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