QUESTION: 57

Because of the current financial measurement focus of the Governmental Funds, they do not report:

Capital Assets
Long-term debt
Cash equivalents
Either A or B

Answer(s): D

Small local governments and nonprofits use a third accounting basis, the cash basis, unapproved by GAAP. Cash accounting is used because_________________ accounting, though more accurate, is more complex and costly.

Deferral
Accrual
Modified
Both B & C

Answer(s): B

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QUESTION: 59

"A cash received as a loan is shown as revenue not as a liability, on the balance sheet. To correct for such cases, most cash accounting systems recognize not only cash but also other assets and liabilities arising through prior cash transactions. This adjustment, though, does not alter the fact that outstanding obligations have been incurred but not accounted for, thus overstating the available balance." This is an example of possible mishandlings after the selection of _________________.

Cash basis of accounting
Accrual basis of accounting
Modified basis of accounting
None of these

Answer(s): A

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QUESTION: 60

This exhibit shows that management should give thoughts to its coding system. A coding system structure with too many accounts is redundant but a too-abbreviated system does not sufficiently permit cost performance evaluation. Minimally organizations should budget
by:

Funds
department
Object of experiment
Funds, Department and Object expenditure

Answer(s): D

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QUESTION: 57

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QUESTION: 60