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Test Bank Chpt 1
Test Bank

to Accompany
Essentials of Accounting for Governmental and Not-for-Profit Organizations:
Eleventh Edition

Prepared by:
Paul Copley and
Mary Loretta Manktelow
James Madison University
Chapter 1 Introduction to Accounting and Financial Reporting for Governmental and Not-for-Profit Organizations

True/False Questions

1. The Governmental Accounting Standards Board sets financial reporting standards for all units of government: federal, state, and local.

Answer: False 2. Fund accounting exists primarily to provide assurance that resources are used according to legal or donor restrictions.

Answer: True

3. The Financial Accounting Standards Board sets financial reporting standards for private sector organizations, except nongovernmental, not-for-profit organizations.

Answer: False

4. FASAB, GASB and FASB standards are set forth primarily in documents called statements.

Answer: True

5. FASAB, GASB and FASB standards are set forth primarily in documents called concept statements.

Answer: False

6. The FASAB was established to recommend accounting and financial reporting standards for governmental and nonprofit enterprises.

Answer: False

7. The GASB requires supplementary information to be reported with its financial statements if it is essential to establish appropriate context for the financial statements and notes. Answer: True

8. The Financial Accounting Standards Board sets financial reporting standards for private not-for-profits and investor-owned businesses.

Answer: True 9. The Financial Accounting Standards Board and the Governmental Accounting Standards Board are parallel bodies under the oversight of the Financial Accounting Foundation. Answer: True

10. An organization is presumed to be governmental if it has the ability to issue directly debt that is exempt from federal taxes.

Answer: True 11. The Federal Accounting Standards Advisory
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