True False Questions

2-1 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Chapter 02 Principles of Accounting and Financial Reporting for State and Local Governments

True / False Questions

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

True False

• 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

• 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

• 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

• Governmental funds account for assets but not the liabilities.

True False

Accounting for Governmental and Nonprofit Entities 17th Edition Reck Test Bank Visit TestBankDeal.com to get complete for all chapters

2-2 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

• The types of funds that may be used in governmental accounting are classified into the three

categories of governmental, proprietary, and fiduciary.

True False

• The governmental funds category includes the General Fund, special revenue funds, debt service

funds, capital projects funds, and internal service funds.

True False

• 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

• 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

• 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

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

True False

• 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

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• 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

• 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

• Expenditures are never recorded in governmental funds.

True False

• Deferred outflow of resources is a type of asset that is unique to government.

True False

• Revenues is an example of what the GASB terms an inflow of resources.

True False

• An expenditure is an example of what the GASB terms an outflow of resources.

True False

• Deferred inflow of resources and deferred outflow of resources would be shown in separate

sections of a government's statement of net position.

True False

• In accordance with GASB standards, a deferred inflow of resources is reported on the financial

statements the same as an unearned revenue.

True False

2-4 Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

• The GASB concept statements indicate that an asset that is going to be converted to cash should

be reported at a remeasured amount at the financial statement date.

True False

• Proprietary funds primarily provide services to the general public for a fee.

True False

• A permanent endowment is an example of a nonspendable fund balance.

True False

• Assigned fund balances can be either positive or negative.

True False

• The General Fund is the only fund that can have a positive unassigned fund balance.

True False

• The positive fund balance in a special revenue fund must at a minimum be reported as assigned.

True False

• Nonmajor funds are not reported on the fund financial statements.

True False

Multiple Choice Questions