Sec 1, Ch 1 - Govt. Accounting, Financial Reporting, Budgeting

Question 1

Name the 4 types of accountability.

Answer 1

1) Operational
2) Fiscal
3) Legal
4) Performance

Question 2

Where does the government derive most of their resources?

Answer 2

By levying taxes

Question 3

Name one difference governments differ from the private sector. (Multiple answers acceptable)

Answer 3

1) Governments do not make money/profit
2) No shareholders
3) Provide services to the public

Question 4

Why is the budget process important for governments?

Answer 4

Governments are legally bound to the budget and it establishes spending authorizations and specifies restrictions on the use of resources

Question 5

What is the primary control device in government?

Answer 5

The budget process

Question 6

The primary mechanism in which governments measure and demonstrate accountability

Answer 6

Financial Reporting

Question 7

What is the cornerstone of financial reporting?

Answer 7

Accountability

Question 8

Performance Accountability

Answer 8

Ensuring governments act in an efficient, effective, and economic manner

Question 9

Fiscal Accountability

Answer 9

Associated with the raising of resources to accomplish objectives

Question 10

Operational Accountability

Answer 10

The stewardship of public resources

Question 11

What does the executive and legislative branch rely on to demonstrate accountability?

Answer 11

Financial Reporting

Question 12

Legal Accountability

Answer 12

The need to comply with laws, rules, and regulations

Question 13

The notion of assessing whether the government’s financial position improved or deteriorated over the period

Answer 13

Interperiod Equity

Question 14

What is the primary accountability mechanism that allows Congress to monitor the financial effects of spending?

Answer 14

Debt Ceiling

Question 15

Give an example of Intergenerational Equity

Answer 15

Social Security

Question 16

Users of Financial Reports (5)

Answer 16

1) Legislatures and oversight groups
2) Citizens
3) Investors and creditors
4) Managers
5) Media

Question 17

The legislature establishes this to see if actual expenditures were within authorized levels

Answer 17

Budgetary Appropriations

Question 18

Why do tax payers care and concentrate about accountability?

Answer 18

They want to ensure operating results and the safeguarding of public tax payer $

Question 19

Why do investors/creditors use financial reports?

Answer 19

To determine compliance with contractual agreements related to debt issues

To determine if they wish to purchase government debt instruments

Question 20

Why does the media care about financial reports?

Answer 20

It publicizes requests for public input on developing priorities of government operations

Question 21

Why are financial reports important to managers?

Answer 21

To determine the government is operating within budgetary parameters, restrictions, laws/regulations, and public policy

Question 22

Financial reporting assists users in doing what two (2) things?

Answer 22

1) Ensure accountability

2) Help make economic, social, and politic decisions

Question 23

What do governments supplement with financial reports to determine if programs are operating effectively?

Answer 23

Supplemental financial reports with performance measures

Question 24

Two types of financial reports and respective examples?

Answer 24

1) Point-in-time Reports, ex. Balance sheet

2) Period Reports, ex. Operating Statement

Question 25

What is a point-in-time report?

Answer 25

Provides current information as of a certain date

Question 26

What is a period report?

Answer 26

A report that covers the entire fiscal year or reporting period

Question 27

Consist primarily of the audited financial statements, including notes to the FS, required supplemental information, and other accompanying information

Answer 27

General Purpose External Financial Reports (GPEFR)

Question 28

What are the six (6) reporting characteristics?

Answer 28

1) Understandability 2) Reliability 3) Relevance 4) Timeliness 5) consistency 6) Comparability

Question 29

True or False: Financial Reports are the only source of information that may be needed by users to make decisions

Answer 29

False

Question 30

What type of laws ensure facilitation of obtaining data from their governments?

Answer 30

Freedom of Information laws, or "Sunshine Laws"

Question 31

What are "sunshine laws"?

Answer 31

Implies the government should operate openly, or in the "sunshine"

Question 32

What website was created to allow citizens to monitor progress of awarding funds to stimulate the economy and create jobs?

Answer 32

American Recovery and Reinvestment Act (Recovery.gov)

Question 33

What is the Federal Open Government Initiative?

Answer 33

An effort by the Federal government to create a level of openness in government.

Question 34

What are the five (5) purposes of the DATA Act?

Answer 34

1) Expand the Federal Funding Accountability and Transparency Act of 2006 to track federal funding effectively 2) Establish government-wide standards 3) Simplify reporting 4) Improve the quality of data 5) Apply approaches developed

Question 35

When was the Securities and Exchange Commission (SEC) established?

Answer 35

1934 after the collapse of the stock market in 1929

Question 36

What does FASB stand for and what are they responsible for?

Answer 36

Financial Accounting Standards Board; vested with the authority to establish accounting and reporting standards for private sector companies, including not-for-profit entities

Question 37

What are the two missions of GASB?

Answer 37

1) Set and improve standards of state/local accounting and financial reporting 2) Guide and educate the public and users of financial reports

Question 38

What are the five (5) GASB rules of procedures to guide its activities?

Answer 38

1) Establishment of a task force to provide feedback on an issue 2) Publishing documents for public comment 3) Distributing an exposure draft for comment 4) Conducting public hearings on due process documents 5) Issuing a final standard

Question 39

What is the FASAB?

Answer 39

Federal Accounting Standards Advisory Board; sets the standards by improving federal financial reporting by issuing federal accounting standards and guidance to external users

Question 40

What are the six (6) rules of procedures for FASAB?

Answer 40

1) Identify accounting issues 2) Prepare documents 3) Release preliminary documents 4) Release exposure draft 5) Vote 6) Issue final pronouncement

Question 41

What do Due Process Procedures accomplish?

Answer 41

Ensures a timely, thorough, and open study of accounting and financial reporting issues.

Question 42

What are four (4) documents used to enable due process before issues of a final standard?

Answer 42

1) Discussion Memorandum (DM) 2) Invitation to Comment (ITC) 3) Preliminary Views (PV) 4) Exposure Draft (ED)

Question 43

What is a Discussion Memorandum?

Answer 43

Outlines the results of research efforts of staff and defines the account and reporting issues for a particular project

Question 44

What is an Invitation to Comment?

Answer 44

Contains elements of the discussion memorandum; allows respondents to comment on a research report.

Question 45

What is a Preliminary View?

Answer 45

The board's initial proposal for an accounting and reporting standard

Question 46

What is an Exposure Draft?

Answer 46

The last due process document; in the format of the final standard, constituents have opportunity for comments.

Question 47

What is a Statement?

Answer 47

Sets forth the accounting and reporting standard that should be followed by preparers and auditors of financial statements

Question 48

What is a Concept Statement?

Answer 48

Describes the concepts the board will use as a framework to evaluate existing standards.

Question 49

What are Interpretations or Technical Bulletins?

Answer 49

Clarifies points that may be ambiguous in a prior standard

Question 50

What Statement provides the hierarchy for FASAB?

Answer 50

Statement of Federal Financial Accounting Standards, SFFAS 34

Question 51

What is the FASAB hierarchy listed in descending order of authority?

Answer 51

Category a) Officially established FASAB accounting principles Category b) FASAB technical bulletins Category c) Technical releases of the Accounting and Auditing Policy Committee of FASAB Category d) Implementation guides published by FASAB staff

Question 52

What Statement provides the hierarchy for GASB accounting principals?

Answer 52

GASB Statement No. 76, The Hierarchy of Generally Accepting Accounting Principles for State/Local Governments

Question 53

What do public officials use to raise revenues?

Answer 53

Sovereign power of government