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Freeman - Governmental and Nonprofit Accounting 9bbe
Freeman - Governmental and Nonprofit Accounting 9bbe
5) Which of the following is not specifically identified in the GAAP hierarchy for state and local
governments?
A) AICPA Industry Audit and Accounting Guides
B) GASB Technical Bulletins
C) GASB Implementation Guides
D) GAO's Yellow Book
E) AICPA Practice Bulletins
F) All of the above are specifically identified in the state and local government hierarchy.
Answer: D
6) Which of the following statements is false?
A) The power to tax is unique to governments.
B) Taxation is a nonexchange transaction.
C) Governmental entities may not finance a function or service with both a user fee and tax
revenues.
D) All of the above statements are true statements.
E) Both items B and C are false statements.
Answer: C
7) The primary users of external financial reports, as identified by the GASB, include all of the
following except
A) Investors and creditors.
B) Citizens.
C) Governing boards.
D) All of the above are considered to be primary users of external financial reports.
E) Both items A and B.
Answer: D
8) Business-type activities differ from governmental-type activities in that
A) Most capital assets of business-type activities are considered to be revenue producing capital
assets, while those in governmental-type activities generally are not.
B) Business-type activities never have the power to levy a tax.
C) Business-type activities do not adopt a budget.
D) All of the above statements accurately reflect actual differences between business-type and
governmental-type activities.
E) Items B and C only accurately reflect primary differences between business-type and
governmental-type activities.
Answer: A
9) Which of the following activities would most likely be accounted for in a nonexpendable
(proprietary) fund?
A) Fire protection
B) Recreation
C) Water operations
D) Street maintenance
E) General government administration
Answer: C