The traditional business model of accounting is inadequate for governments and not-for-profit organizations primarily because businesses differ from:
The traditional business model of accounting is inadequate for governments and not-for-profit organizations primarily because businesses differ from governments and not-for-profit organizations in that they have different missions.
The primary objective of a not-for-profit organization or a government is to:
The primary objective of a not-for-profit organization or a government is to maximize revenues, minimize expenditures, and provide services to constituents.
In governments, in contrast to businesses:
In governments, in contrast to businesses, there may not be a direct relationship between revenues raised and the demand for the entity’s services.
The organization responsible for setting accounting standards for state and local governments is the:
The organization responsible for setting accounting standards for state and local governments is the GASB.
Governments differ from businesses in that they:
Governments differ from businesses in that they do not issue common stock.
Interperiod equity refers to a condition whereby:
Interperiod equity refers to a condition whereby current-year revenues are sufficient to pay for current-year revenues.
Upon ordering supplies a government should:
Upon ordering supplies a government should debit expenditures and credit vouchers payable.
Upon receiving supplies that had previously been encumbered a government should:
Upon receiving supplies that had previously been encumbered a government should debit fund balance and credit reserve for encumbrances.
Upon closing the books at year-end a government should:
Upon closing the books at year-end a government should debit encumbrances and credit reserve for encumbrances.
A government places an order for a particular item of equipment and encumbers $5,500. The item arrives accompanied by an invoice for $5,200. The entries that the government should make should include (but not necessarily be limited to):
A debit to expenditures for $5,200, a credit to encumbrances for $5,500, and a credit to accounts payable for $5,200.
Per GASB Statement No. 34, governments must:
Per GASB Statement No. 34, governments must prepare a general fund budget on a modified accrual basis.
The amount that a government has available to spend would be indicated by:
The amount that a government has available to spend would be indicated by reserve for encumbrances plus appropriations minus the sum of expenditures and net adjustments.
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