Question

1. General purpose governments provide a wide range of services to their residents, such as public safety, road maintainance, and health and welfare.

True

False

2. Examples of special purpose governments include public schools, libraries, and water supply plants that receive tax revenue to finance the services they provide.

True

False

3.The Governmental Accounting Standards Board (GASB) has the authority to establish accounting principles for all governmental and not-for-profit organizations.

True

False

4. A key characteristic of a government is the absence of defined ownership interests.

True

False

5. Interperiod equity refers to the concept that current years revenues are sufficient to pay for services provided that year, so that future taxpayers will not be required to assume the burden for services previously provided.

True

False

6. Current financial resources are cash or items expected to be converted into cash during the current accounting period, or soon enough thereafter to pay for current liabilities.

True

False

7.A fund is an accounting and a fiscal entity.

True

False

8. The types of funds that may be used in governmental accounting are classified into three (3) categories of activities performed by governments: governmental, business-type, and fiduciary.

True

False

9. All unmatured long-term liabilities of the government should be accounted for in the general fund.

True

False

10. Governments can demonstrate accountability by adopting an annual budget, using the accounting system to provide for budgetary control, and presenting budgetary comparisons to actual results in the appropriate financial statements.

True

False

Answer 1

1 TRUE

explanation:General purpose governments provide a wide range of services to their residents.
Examples: States, counties, municipalities (cities, towns, and villages), and townships

2 TRUE

Explanation:Special purpose governments provide only a single function or a limited number of functions i.e provide: education, drainage and flood control, irrigation, soil and water conservation, fire protection, and water supply and have the power to levy/collect taxes and raise revenues from other sources as provided by state laws.

3 FALSE

Explanation:The Government Accounting Standards Board (GASB) has the authority to establish generally accepted accounting principles (GAAP) for state and local government entities.

4 FALSE

REASON:  A key characteristic of NOT FOR PROFIT ORGANISATION is the absence of defined ownership interests.

5 TRUE

6 FALSE

7 TRUE

explanation: A fund is a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources; together with all related liabilities and residual equities or balances, and changes therein.

8 FALSE

Reason:Funds used in state and local government accounting and financial reporting are classified into three categories: governmental funds, proprietary funds, and fiduciary funds.

9 TRUE

10 FALSE