Test Bank For Accounting for Governmental and Nonprofit Entities 17th Edition By Reck and Lowensohn

Test Bank For Accounting for Governmental and Nonprofit Entities 17th Edition By Reck and Lowensohn

Chapter 02 Principles of Accounting and Financial 

Reporting for State and Local Governments

True / False Questions

1. Governmental activities are to be classified as governmental or business-type.  

True    False

2. Governmental funds are identical to governmental activities, proprietary funds are identical to business-type activities, and fiduciary funds are identical to fiduciary activities of a government.  

True    False

3. Only those governmental and proprietary funds that meet the GASB size criteria for major funds are reported in separate columns of the governmental and proprietary fund financial statements.

True    False

4. Economic resources are cash or items expected to be converted into cash during the current period, or soon enough thereafter to pay current period liabilities.  

True    False

5. Governmental funds account for assets but not the liabilities.  

True    False

6. The types of funds that may be used in governmental accounting are classified into the three categories of governmental, proprietary, and fiduciary.  

True    False

7. The governmental funds category includes the General Fund, special revenue funds, debt service funds, capital projects funds, and internal service funds.  

True    False

8. Governments can, in part, demonstrate operational accountability by reporting proprietary and fiduciary fund financial information, as well as all government-wide financial information, using an economic resources measurement focus and the accrual basis of accounting.  

True    False

9. All capital assets acquired by or used by a fund should be reported in the fund balance sheet or statement of net position.  

True    False

10. Because budgetary accounts are used by governments, government financial statements can never be said to be in accord with generally accepted accounting principles.  

True    False

11. The maximum sets of fund financial statements a government would present are three. 

True    False

12. When revenues are legally restricted by external resource providers or committed by enabling legislation for particular operating purposes, a private purpose trust fund is created.  

True    False

13. A debt service fund is used to account for financial resources segregated for the purpose of making principal and interest payments on general long-term debt.  

True    False

14. A deferred inflow of resources is defined as “an acquisition of net assets by the government that is applicable to a future reporting period.”  

True    False

15. Expenditures are never recorded in governmental funds.  

True    False