Governmental Accounting Chapter 1 Hw

Satisfactory Essays
Governmental Acct.
Chapter 1 Homework

1-1) What justifies the different accounting & financial reporting practices of gvmt. & not-for-profit organizations as compared with business organizations?
The fact that governments may have a monopoly on the services that they provide and the taxpayers must provide resources to them regardless of what they are, and efficiency is hard to measure as well as the quantity or quality of the services.

1-2) Describe the principal differences that distinguish governmental and not-for-profit organizations from business organizations. Unlike business organizations, governments and not-for-profit organizations:
Do not provide benefits that are proportional to the resources provided to them
Lack a profit motive
Do not have transferable owner rights

1-4) The standard setting bodies for establishing accounting and reporting standards are as follows: state and local governments: GASB (Governmental Accounting Standards Board) business organizations: FASB (Financial Accounting Standards Board) not-for-profit organizations: FASB for non-government not-for-profit GASB for governmental not-for-profit 4. federal government/agencies: FASAB (Federal Accounting Standard Advisory Board)

1-5) Is interperiod equity the cornerstone of all financial reporting in government? Why or why not? No. Because accountability is the cornerstone.

1-6) Distinguish between fiscal accountability and operational accountability and explain which basic financial statements are intended to assist financial statement users in assessing each type of accountability. Operational accountability is to determine if the government used the resources effectively and efficiently while fiscal accountability is to determine if the government raised and spent the resources according to budget.

The government wide statements assist users in assessing operational

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