AICPA Governmental & Not-for-Profit Accounting

Question 1

Which basis of accounting is used for governmental fund financial statements under GASB standards?

Accepted Answer

Modified accrual basis

Answer

Governmental funds use the modified accrual basis, recognizing revenues when measurable and available, and expenditures when incurred.

Question 2

Which fund type would a state government use to account for resources legally restricted to pay long-term debt principal and interest?

Accepted Answer

Debt service fund

Answer

A debt service fund accounts for resources accumulated for and the payment of general long-term debt principal and interest.

Question 3

What does GASB stand for?

Accepted Answer

Governmental Accounting Standards Board

Answer

GASB — the Governmental Accounting Standards Board — establishes accounting and financial reporting standards for U.S. state and local governments.

Question 4

Which financial statement is unique to governmental fund accounting and reconciles fund balances to government-wide net position?

Accepted Answer

Balance Sheet with reconciliation

Answer

The governmental fund Balance Sheet includes a reconciliation schedule that bridges the fund balance to the government-wide net position reported under full accrual.

Question 5

Under GASB, the general fund is best described as:

Accepted Answer

The chief operating fund of a government

Answer

The general fund accounts for all financial resources not required to be accounted for in another fund and is the primary operating fund.

(AICPA) Association of International Certified Professional Accountants Practice Test

(AICPA) Association of International Certified Professional Accountants Practice Test

AICPA Governmental & Not-for-Profit Accounting