Chapter 1

1.

1 point

A statistical section should be included in

A comprehensive annual financial report (CAFR).

The basic financial statements.

The notes to the financial statements.

Required supplementary information, other than MD&A.

2.

1 point

Which of the following would typically not be included in the introductory section of a comprehensive annual financial report?

Title and contents page.

Letter of transmittal.

A description of the government.

Summary of the government's current financial position and results of financial activities.

3.

1 point

The body that has been established to recommend accounting and financial reporting standards for the federal government is the

Financial Accounting Standards Board (FASB).

Governmental Accounting Standards Board (GASB).

Government Accountability Office (GAO).

Federal Accounting Standards Advisory Board (FASAB).

4.

1 point

Which of the following groups is considered a primary user of a state or local government's general-purpose external financial statements?

Citizens.

Managers and administrators.

Employees.

Special interest groups.

5.

1 point

On what should the government-wide financial statements report?

Net position and results of financial operations of the government as a whole.

Fiscal accountability.

The cost of government services.

Budgetary compliance.

6.

1 point

Which of the following should be included in the financial section of a comprehensive annual financial report?

Transmittal letter.

The basic financial statements, including notes thereto.

Tables and charts showing demographic and economic data.

A description of the government.

7.

1 point

Recognizing revenues when measurable and available for paying current obligations and expenditures when incurred describes which basis of accounting?

Accrual.

Modified accrual.

Modified cash.

Budgetary.

8.

1 point

One of the minimum requirements for general purpose external financial reporting is:

Management's discussion and analysis (MD&A).

Consolidated financial statements.

Other supplementary information, such as combining and individual fund statements.

Statistical information.

9.

1 point

Which of the following is not an objective of financial reporting by state and local governments?

To assist users in assessing the adequacy of systems and controls.

To assist users in assessing financial condition and results of operations.

To assist financial report users in comparing actual financial results with the legally adopted budget.

To assist in determining compliance with finance-related laws, rules, and regulations.

10.

1 point

Which of the following organizations issue standards that are intended for both internal and external users of financial information?

Federal Accounting Standards Advisory Board.

Governmental Accounting Standards Board.

Financial Accounting Standards Board.

American Institute of CPAs.

11.

1 point

Which of the following standard-setting bodies requires a management’s discussion and analysis as a part of the financial report?

GASB.

FASB.

FASAB.

Both A and C.

12.

1 point

Which of the following distinguishes governments from nongovernmental not-for-profit organizations?

Absence of profit motive.

The power to enact and enforce a tax levy.

Resource providers do not expect benefits proportional to the resources provided.

Absence of a defined ownership interest that can be sold, transferred, or redeemed.

13.

1 point

Which of the following sections is not considered a part of a federal agency’s performance and accountability report?

Basic financial statements.

Annual performance report.

Statistical section.

Management's discussion and analysis.

14.

1 point

The Financial Accounting Standards Board has the responsibility for setting accounting and financial reporting standards for

All not-for-profit organizations that are nongovernmental and business entities.

All special purpose governments.

All not-for-profit organizations.

All federal government agencies.

15.

1 point

Which of the following is identified by the GASB as the "cornerstone" of all financial reporting in government?

Understandability.

Representational faithfulness.

Accountability.

Interperiod equity.

16.

1 point

On what should the governmental fund financial statements report?

Net position and results of financial operations of the government as a whole.

Fiscal accountability.

Operational accountability.

Cost of government services.

17.

1 point

Which of the following is identified by the FASAB as the foundation for federal financial reporting?

Decision usefulness.

Accountability.

Understandability.

Budget integrity.

18.

1 point

The Governmental Accounting Standards Board is assigned responsibility for setting accounting and financial reporting standards for

Governments; such as federal agencies, states, cities, counties, villages, and townships.

State and local government entities and governmentally-related units and agencies, such as utilities, authorities, hospitals, and colleges and universities.

Not-for-profit organizations.

State and local government and all not-for-profit organizations.

19.

1 point

A comprehensive annual financial report (CAFR) prepared in conformity with GASB recommendations should include which of the following sections?

Letter of transmittal, management's discussion and analysis (MD&A), and financial.

Introductory, financial, and statistical.

Introductory, MD&A, and financial.

Letter of transmittal, financial, and supplementary.

20.

1 point

The section of the comprehensive annual financial report that presents tables and charts showing social and economic data in addition to financial trends, fiscal capacity, and operating information of the government is the:

Introductory section.

Management's discussion and analysis section.

Statistical section.

Financial section.

21.

1 point

Which of the following would be included in a properly prepared comprehensive annual financial report (CAFR), but not in the minimum requirements for general purpose financial reporting specified by GASB standards?

Management's discussion and analysis (MD&A).

Government-wide financial statements.

Notes to the financial statements.

Combining and individual fund financial statements.

22.

1 point

Which of the following statements is prepared by all not-for-profit organizations?

Statement of financial position.

Statement of functional expenses.

Statement of revenues, expenses, and changes in net position.

Both A and B.

23.

1 point

Which of the following types of organizations may be subject to FASB jurisdiction?

A state hospital.

A college or university.

A public school district.

A public sanitation district.