Chapter001-new - Chapter 01 Introduction to Accounting and...

Chapter 01 - Introduction to Accounting and Financial Reporting for Governmental and Not-for-Profit
Entities
CHAPTER 1: INTRODUCTION TO ACCOUNTING AND FINANCIAL
REPORTING FOR GOVERNMENTAL AND NOT-FOR-
PROFIT ENTITIES
OUTLINE
Number Topic Type/Task Status
(re: 14/e)
Questions:
1-1 Distinguishing between general purpose and
special purpose governments
Justify/Explain 1-3 revised
1-2 Distinguishing GNP accounting and reporting
standards from business entities
Contrast New
1-3 Standards-setting bodies Contrast 1-4 revised
1-4 Determining whether a not-for-profit
organization is governmental
Identify/Explain New
1-5 Conceptual basis for reporting Evaluate/Explain Revised
1-6 Types of accountability Contrast Revised
1-7 Measurement focus and basis of accounting Explain New
1-8 Distinguishing bases of accounting Explain New
1-9 Comprehensive annual financial report Describe 1-7
1-10 Service efforts and accomplishments Explain New
Cases:
1-1 Internet Case—FASB Internet/Written
report
New
1-2 Internet Case—GASB Internet/Written
report
New
1-3 Internet Case—FASAB Internet/Written
report
Revised
1-4 Research Case—Government or NFP entity? Written report Revised
Exercises/Problems:
1-1 Examine the CAFR Examine Revised
1-2 Various Multiple Choice Items 1 is
new; several
other items
revised
1-3 Reporting characteristics of government-wide
and fund financial statements
Matching Same
1-1

Chapter 01 - Introduction to Accounting and Financial Reporting for Governmental and Not-for-Profit
Entities
CHAPTER 1: INTRODUCTION TO ACCOUNTING AND FINANCIAL
REPORTING FOR GOVERNMENTAL AND NOT-FOR-
PROFIT ENTITIES
Answers to Questions
1-1. 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. Examples of general
purpose governments include states, counties, townships, cities, and villages. Special
purpose governments typically include such special districts as those for police and fire
protection, sanitation, and water, and organizations such as school districts and public
colleges and universities.
1-2. Disagree. As discussed in this chapter, 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.