Finance Questions

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1-2 Identify and describe the five environmental differences between governments and for-profit business enterprises as identified in the Governmental Accounting Standards Board’s Why Governmental Accounting and Financial Reporting Is and Should be Different. * Organizational Purposes: government exists for the well-being of the citizens by providing public services, whether or not the services are profitable undertakings. * Sources of Revenue: government derives many of their resources from taxes and other non-exchange transactions. * Potential Longevity: government vary rarely go out of business, this long term view of operations changes the focus on sustainability of services and the ability to meet future demands. * Relationship with Stakeholders: governments have an obligation to demonstrate accountability for public funds. * Role of the Budget: government budgets often carry the authority of the law, preventing public officials from spending their budgetary authority. 1-4 What is the definition of a government as agreed upon by the FASB and GASB? * Public corporations and bodies corporate and politic are governmental organizations. Other organizations are governmental organizations if they have one or more of the following characteristics: popular election of officers or appointment ( or approval) of a controlling majority of the members for the organization’s governing body of officials of one or more state or local governments; the potential for unilateral dissolution by a government with the net assets reverting to government; or the power to enact and enforce a tax levy.

1-9 Go to the GASB website (www.gasb.org). What is the mission of GASB? * To establish and improve standards of state and local governmental accounting and financial reporting that will result in the useful information for users of financial reports and guide and educate the public, including issuers, auditors, and the users of those financial reports.

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