Ch_1_and_16 - CHAPTER 1 GOVERNMENTAL AND NONPROFIT ACCOUNTING ENVIRONMENT AND CHARACTERISTICS All of these answers are for your use only No work

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CHAPTER 1 GOVERNMENTAL AND NONPROFIT ACCOUNTING: ENVIRONMENT AND CHARACTERISTICS All of these answers are for your use only. No work related to these answers will be accepted after this posting to doc sharing. ANSWERS TO QUESTIONS Question 1-1 a. The similarities 1. Double-entry system of accounts. 2. Most accounting mechanics, e.g., basic transaction documents, journals, ledgers, charts of accounts. 3. Where a G&NP organization has a business-type activity, e.g., a municipal electric utility, the accounting generally parallels that for a similar private business (e.g., electric utility). b. 1. Fund accounting—designed to separate resources according to the purposes for which they may be used and to account for their uses and balances. 2. Budgetary control techniques—to help assure appropriations are not overexpended and Question 1-2 a. A fund of a not-for-profit (or G&NP) organization is an independent fiscal and accounting entity. Each fund has a separate self-balancing set of accounts in which are recorded the resources segregated for specific purposes, the related liabilities and residual equity (fund balance), and the changes therein. Financial statements typically must be presented to report the financial position and operating activities of a fund of a government. b. As the term is generally used in commercial accounting, a "fund" merely indicates that a portion of an organization's assets is set aside and/or restricted to certain uses, e.g., a petty cash fund or a bond sinking fund. Such "funds" are not separate accounting entities, but are accounted for by establishing appropriately titled asset and liability accounts within the organization's general ledger. c. No, the creation of a fund does not constitute authority to spend or obligate its resources. In most not-for-profit organizations, particularly governments, authority to spend or obligate fund resources is conferred only upon an appropriation(s) being made by the legislative body or governing board. 1
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Question 1-3 1. Expendable (governmental) funds are used to account for the current assets; related liabilities; changes in net assets from revenues, expenditures, and other financing sources (uses); and the balances that may be expended in a G&NP organization's "governmental" or other" nonproprietary" activities. 2. Nonexpendable (proprietary) funds are used to account for the revenues, expenses, assets, Question 1-4 " Expenditures " may be defined as the amount of financial resources expended during an accounting period for current operations, capital outlay, and long-term debt principal retirement and interest. (Expenditures are measured in governmental/expendable fund accounting.) " Expenses ," on the other hand, are the costs of goods or services consumed (expired) during an
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This note was uploaded on 11/16/2010 for the course ACCT410 ACCT410 taught by Professor Hall during the Spring '10 term at Strayer.

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Ch_1_and_16 - CHAPTER 1 GOVERNMENTAL AND NONPROFIT ACCOUNTING ENVIRONMENT AND CHARACTERISTICS All of these answers are for your use only No work

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