Certified Public Accountant Governmental & Not-for-Profit Accounting

Question 1

Which organization establishes GAAP for state and local governments in the United States?

Accepted Answer

GASB

Answer

The Governmental Accounting Standards Board (GASB) establishes GAAP for state and local governments, while FASB covers the private sector.

Question 2

Under governmental accounting, what is the primary measurement focus for governmental funds?

Accepted Answer

Current financial resources

Answer

Governmental funds use the current financial resources measurement focus, tracking only current assets and current liabilities rather than long-term items.

Question 3

Which fund type is used to account for a government's general operations and services?

Accepted Answer

General Fund

Answer

The General Fund accounts for most of a government's basic services and general operations that are not accounted for in other funds.

Question 4

What basis of accounting is used in governmental fund financial statements?

Accepted Answer

Modified accrual basis

Answer

Governmental fund statements use modified accrual accounting, where revenues are recognized when measurable and available, and expenditures when the liability is incurred.

Question 5

Under GASB standards, which of the following is classified as a fiduciary fund?

Accepted Answer

Pension Trust Fund

Answer

Pension Trust Funds are fiduciary funds used to account for resources held in trust for members and beneficiaries of pension plans.

Certified Public Accountant Practice Test

Certified Public Accountant Practice Test

Certified Public Accountant Governmental & Not-for-Profit Accounting