Chapter001

Chapter001 - CHAPTER 1: INTRODUCTION TO ACCOUNTING AND...

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CHAPTER 1: INTRODUCTION TO ACCOUNTING AND FINANCIAL REPORTING FOR GOVERNMENTAL AND NOT-FOR- PROFIT ENTITIES OUTLINE Number Topic Type/Task Status (re: 13/e) Questions: 1-1 Rationale for unique GNP accounting and financial reporting standards Justify/Explain New 1-2 Distinguishing GNP from business entities Contrast 1-1 revised 1-3 Distinguishing between general purpose and special purpose governments Contrast New 1-4 Standards-setting bodies Identify/Explain 1-2 revised 1-5 Conceptual basis for reporting Evaluate/Explain New 1-6 Types of accountability Contrast 1-4 revised 1-7 Comprehensive annual financial report Explain 1-7 revised 1-8 Reconciling government-wide and fund financial statements Describe New 1-9 Measurement focus and basis of accounting Describe New 1-10 Measurement focus and basis of accounting Describe New Cases: 1-1 Research Case—Government or NFP entity? Written report 1-1, revised 1-2 Internet Case—FASB Internet/Written report New 1-3 Internet Case—FASAB Internet/Written report New 1-4 Internet Case—GASB Internet/Written report Revised Exercises/Problems: 1-1 Examine the CAFR Examine Revised 1-2 Various Multiple Choice Items 2,3,9, and 10, new; Other items revised 1-3 Reporting characteristics of government-wide and fund financial statements Matching New 1-1
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CHAPTER 1: INTRODUCTION TO ACCOUNTING AND FINANCIAL REPORTING FOR GOVERNMENTAL AND NOT-FOR- PROFIT ENTITIES Answers to Questions 1-1. As discussed in Chapter 1, government and not-for-profit organizations serve different functions in society than do business organizations. Not surprising, then, the objectives of financial reporting for these organizations, as shown in Illustration 1-2, are quite different from the objectives of business reporting. The most striking difference is the need for government and not-for-profit organizations to report on accountability, in addition to financial performance. The different functions served and different reporting objectives lead to different accounting and reporting practices. 1-2. The major characteristics that distinguish governmental and not-for-profit entities from business enterprises include: a. Receipts of significant amounts of resources from resource providers who do not expect to receive either repayment or economic benefits proportionate to the resources provided. b. Operating purposes that are other than to provide goods or services at a profit or profit equivalent. c. Absence of defined ownership interests that can be sold, transferred, or redeemed, or that convey entitlement to a share of residual distribution of resources in the event of liquidation of the organization. 1-3. General purpose governments differ from special purpose governments primarily in terms of the scope of their legal powers and the range of services provided. General purpose governments typically have much more power over citizens and provide a much greater range of services than do special purpose governments.
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This note was uploaded on 04/06/2010 for the course ACCT 100 taught by Professor Smith during the Spring '10 term at Harvard.

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Chapter001 - CHAPTER 1: INTRODUCTION TO ACCOUNTING AND...

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