GOV & NP ACCT EXAM.docx - What is the primary reason...

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What is the primary reason that governmental entities use fund accounting? Student Answer: Fund accounting is required by law. Fund accounting is required by GAAP. Fund accounting promotes control and accountability over restricted resources. Fund accounting promotes better control over operating activities. Points Received: 2 of 2 Comments: Question 2. Question : Basis of accounting determines which of the following? Student Answer: When transactions and events are recognized. What transactions and events will be reported. Where transactions and events will be reported. Why transactions and events will be reported. Points Received: 2 of 2 Comments: Question 3. Question : A fund is Student Answer: A separate legal entity. A separate fiscal and accounting entity.
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A separate self-balancing set of accounts for inventory purposes. None of the above. Points Received: 2 of 2 Comments: Question 4. Question : Which of the following funds is a fiduciary fund? Student Answer: Permanent fund. Agency fund. Capital projects fund. Debt service fund. Points Received: 2 of 2 Comments: Question 5. Question : When a governmental entity adopts a basis of accounting other than full accrual and a measurement focus that excludes long-lived assets and liabilities in its governmental fund types: Student Answer: It is in violation of the law. It is in violation of GAAP. It has reported in accordance with GAAP for governmental fund financial statements. It has the ability to better measure the results of operations. Points Received: 2 of 2
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Comments: Question 6. Question : A primary characteristic that distinguishes governments from businesses is Student Answer: The need to generate revenues equal to or in excess of expenditures/expenses. The importance of the budget in the governing process. The need to provide goods or services. The correlation between revenues generated and demand for goods or services. Points Received: 2 of 2 Comments: Question 7. Question : A primary characteristic that distinguishes not-for-profit entities from businesses is Student Answer: The need to generate revenues equal to or in excess of expenditures/expenses. The importance of the budget in the governing process. The need to provide goods or services. The correlation between revenues generated and demand for goods or services. Points Received: 2 of 2 Comments: Question 8. Question : Which of the following characteristics distinguishes a
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government or not-for-profit entity from a business? Student Answer: There is always a direct link between revenues generated and expenditures/expenses incurred. Capital assets are used to produce revenues and save costs. Revenues are always indicative of demand for goods and services. The mission of the entity will determine the goods or services provided.
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