GAC Governmental Accounting Principles & Standards 3

Question 1

Which GASB statement requires governments to report infrastructure assets using either the depreciation approach or the modified approach?

Accepted Answer

GASB Statement No. 34

Answer

GASB 34 requires infrastructure assets to be reported and allows governments to use either the traditional depreciation method or the modified (preservation) approach.

Question 2

What is the primary purpose of the Management's Discussion and Analysis (MD&A) in a government's CAFR?

Accepted Answer

To offer management's analytical overview of the government's financial activities

Answer

The MD&A provides management's own analysis of the government's financial condition and results, serving as an introduction to the basic financial statements.

Question 3

Under GASB standards, which of the following is NOT a fiduciary fund type?

Accepted Answer

Internal service fund

Answer

Internal service funds are proprietary funds, not fiduciary funds; fiduciary funds include pension trust, investment trust, private-purpose trust, and custodial funds.

Question 4

GASB Statement No. 68 requires employers to record which liability on their government-wide statements?

Accepted Answer

Net pension liability

Answer

GASB 68 requires governmental employers to recognize their proportionate share of the net pension liability on the government-wide statement of net position.

Question 5

Which component of net position represents the portion associated with capital assets net of related debt?

Accepted Answer

Net investment in capital assets

Answer

Net investment in capital assets represents the net book value of capital assets less any outstanding related debt used to acquire those assets.

(GAC) Governmental Accounting Certification Practice Test

(GAC) Governmental Accounting Certification Practice Test

GAC Governmental Accounting Principles & Standards 3