Professional Documents
Culture Documents
Exercise 1: For each of the following, select the letter corresponding with the best
answer:
1. The private sector organization that has been given primary authority to set accounting
and financial reporting standards for state and local governments is the:
a. Financial Accounting Standards Board.
b. Governmental Accounting Standards Board.
c. Federal Accounting Standards Advisory Board.
d. American Institute of Certified Public Accountants.
2. The private sector organization that has been given primary authority to set accounting
and financial reporting standards for private sector, not-for-profit organizations is the:
a. Financial Accounting Standards Board.
b. Governmental Accounting Standards Board.
c. Federal Accounting Standards Advisory Board.
d. American Institute of Certified Public Accountants.
3. The organization that has been given primary authority to set accounting and
financial reporting standards for the federal government and its agencies is the:
a. Financial Accounting Standards Board.
b. Governmental Accounting Standards Board.
c. Federal Accounting Standards Advisory Board.
d. American Institute of Certified Public Accountants.
10. Which of the following is true regarding accounting for fixed assets of state and local
governmental units?
a. Fixed assets are to be recorded at historical cost.
b. Fixed assets are to be reported and depreciated in the government-wide financial
statements.
c. Fixed assets are to be reported and depreciated in the proprietary fund financial
statements but not in the governmental fund financial statements.
d. All of the above are true.
Exercise 2: For each of the following, select the letter corresponding with the best
answer:
1. Which of the following organizations would not have accounting and financial
reporting principles established by the Financial Accounting Standards Board:
a. St. Mary’s Catholic Hospital.
b. Cook County Hospital.
c. Yale University, a private institution.
d. Boy Scouts of America.
5. Which of the following statements would not be prepared using full accrual
accounting?
a. Government-wide statements of activities.
b. Proprietary fund statement of revenues, expenses, and changes in fund net assets.
c. Governmental fund statement of revenues, expenditures, and changes in fund
balances.
d. Fiduciary fund statement of changes in net assets.
6. Which of the following is not a governmental fund?
a. General.
b. Private-purpose.
c. Special revenues.
d. Debt service.
7. Which of the following fund types uses the same measurement focus and basis of
accounting as the General Fund?
a. Enterprise.
b. Pension and other employee benefit.
c. Internal service.
d. Permanent.
8. Which of the following is not true regarding the reporting of infrastructure by state and
local governmental units?
a. Infrastructure must be recorded as fixed assets in the government-wide
statements.
b. Infrastructure includes such assets as roads, bridges, tunnels, and water and sewer
systems.
c. Infrastructure may be either depreciated or reported using the modified approach
outlined by the GASB.
d. None of the above; all are true.
9. GASB Concepts Statement No. 3 establishes a hierarchy for reporting. In which of the
reporting formats is it permitted to present management predictions or forecasts?
a. Basic financial statements.
b. Notes to the financial statements.
c. Required supplementary information.
d. None of the above.
10. Which of the following is not true regarding accounting and financial reporting for
long-term debt and other long-term liabilities by state and local governmental
units?
a. Long-term debt and other long-term liabilities are to be reported in the
government-wide statement of net position.
b. Long-term debt and other long-term liabilities are to be reported in the proprietary
fund statement of net position.
c. Long-term debt and other long-term liabilities are to be reported in the
governmental fund balance sheet.
d. None of the above; all are true.