Test Bank for Introduction to Governmental and Not for Profit Accounting 7th Edition by Ives

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Product details:

• ISBN-10 ‏ : ‎ 1118983270
• ISBN-13 ‏ : ‎ 978-1118983270
• Author: Michael H. Granof

Covering the essentials of fund accounting, this flexible book introduces the reader to the basic accounting principles at work in both governmental and not-for-profit organizations.

Table of contents:

1 The Government and Not- for- Profit Environment 1

How Do Governments and Not- For- Profits Compare With Businesses? 2

In Practice: Why Is State And Local Government Accounting Important? 6

What Other Characteristics of Governments and Not- For- Profits Have Accounting Implications? 9

How Do Governments Compare With Not-For- Profits? 12

What Are The Overall Purposes of Financial Reporting? 14

Who are The Users, and What are The Uses of Financial Reports? 14

What are The Specific Objectives of Financial Reporting As Set Forth By The GASB and The FASB? 17

Example: Clash Among Reporting Objectives 19

Do Differences In Accounting Principles Really Matter? 22

In Practice: Will Accounting Changes Make A Difference? 24

Who Establishes Generally Accepted Accounting Principles? 24

In Practice: Assessing the Profitability of An Athletic Program 25

In Practice: Governments and Not- For- Profits May Also Be Aggressive In Their Accounting 26

Summary 29

Key Terms In This Chapter 30

Questions For Review and Discussion 30

Exercises 31

Continuing Problem 33

Problems 33

Questions For Research, Analysis, And Discussion 37

2 Fund Accounting 38

What is a Fund? 39

What are the Key Elements of Government Financial Statements? 39

What Characterizes Funds? 41

Use of Multiple Funds to Account for An Entity 44

Basis of Accounting and Measurement Focus 45

Example: Fund Accounting in a School District 46

Major VS. Nonmajor Funds 49

How Can Funds be Combined and Consolidated? 49

What are the Main Types of a Government’s Funds? 59

What’s Notable About Each Type of Governmental Fund? 61

What’s Notable About Each Type of Proprietary Fund? 64

What’s Notable About Each Type of Fiduciary Fund? 70

What is Included in a Government’s Annual Comprehensive Financial Report (ACFR)? 71

Example: Government-Wide Statement of Activities 74

How Do the Funds and Annual Reports of Not-For-Profits Differ From Those of Governments? 75

Summary 78

Key Terms In This Chapter 80

Exercise for Review and Self-Study 80

Questions for Review and Discussion 81

Exercises 82

Continuing Problem 85

Problems 86

Questions for Research, Analysis, and Discussion 91

Solution to Exercise for Review and Self-Study 92

3 Issues of Budgeting and Control 95

What are the Key Purposes of Budgets? 96

Why is More Than One Type of Budget Necessary? 96

How are Expenditures and Revenues Classified? 98

Why are Performance Budgets Necessary? 99

What are the Key Phases of the Budget Cycle? 101

In Practice: Budgeting In The Midst of a Pandemic 103

On What Basis of Accounting are Budgets Prepared? 105

In Practice: States Balance Their Budgets the Painless Way 106

In Practice: The Cost of GAAP 107

In Practice: Balancing the Budget by Selling Assets to Yourself 108

What Cautions Must be Taken in Budget-to-Actual Comparisons? 108

How Does Budgeting in Not-For-Profit Organizations Compare with that in Governments? 111

How Do Budgets Enhance Control? 112

What are the Distinctive Ways Governments Record Their Budgets? 114

Example: Budgetary Entries 115

An Alternative Method: Crediting or Debiting the Difference Between Revenues and Expenditures to “Budgetary Control” 117

How Does Encumbrance Accounting Prevent Overspending? 117

Example: The Encumbrance Cycle—Year 1 118

Example: The Encumbrance Cycle—Year 2 120

Example: Impact of Encumbrances on Fund Balance 121

Are Budgetary and Encumbrance Entries Really Needed? 124

Summary 125

Key Terms in this Chapter 125

Exercise for Review and Self-Study 126

Questions for Review and Discussion 126

Exercises 127

Continuing Problem 131

Problems 131

Questions for Research, Analysis, and Discussion 139

Solution to Exercise for Review and Self-Study 139

4 Recognizing Revenues in Governmental Funds 141

Why and How Do Governments Use the Modified Accrual Basis? 141

What are the Main Types of Nonexchange Revenues and the Limitations on How and When They Can be Used? 145

How Should Property Taxes and Other Imposed Nonexchange Revenues be Accounted for? 146

I n Practice: In Practice: Just as it did with individuals, corona viruses make some governments

far more sick than others 146

Example: Property Taxes 148

Example: Fines 153

How Should Sales Taxes and Other Derived Tax Revenues be Accounted for? 154

Example: Sales Taxes 154

Example: Sales Taxes Collected by State 156

Example: Income Taxes 157

What are Tax Abatements and Why and How Must They be Disclosed? 159

How Should Grants and Similar Government-Mandated and Voluntary Nonexchange Revenues be Accounted For? 160

Example: Unrestricted Grant with Time Requirement 161

Example: Grant with Purpose Restriction 162

Example: Reimbursement (Eligibility Requirement) Grant 162

Example: Unrestricted Grant with Contingency Eligibility Requirement 163

Example: Endowment Gift 163

Example: Pledges 163

Example: Donations of Land for Differing Purposes 164

Example: On-Behalf Payments 167

How Should Sales of Capital Assets be Accounted For? 167

Example: Sales of Capital Assets 168

How Should Licenses, Permits, and Other Exchange Transactions be Accounted for? 169

Example: License Fees 169

How Should Governments Report Revenues in their Government-Wide Statements? 170

Summary 171

Key Terms In This Chapter 173

Exercise for Review and Self-Study 173

Questions for Review and Discussion 174

Exercises 174

Continuing Problem 178

Problems 178

Questions for Research, Analysis, and Discussion 184

Solution to Exercise for Review and Self-Study 185

5 Recognizing Expenditures in Governmental Funds 187

Hierarchical Approach to Transaction Analysis 187

How is the Accrual Concept Modified for Expenditures? 189

How Should Wages and Salaries be Accounted for? 190

Example: Wages and Salaries 190

How Should Compensated Absences Be Accounted For? 191

In Practice: Changing the Pay Date by One Day 191

Example: Vacation Leave 192

Example: Sick Leave 193

Example: Sabbatical Leave 196

How Should Pensions and Other Postemployment Benefits Be Accounted For? 197

Example: Pension Expenditure 197

How Should Claims and Judgments Be Accounted For? 198

Example: Claims and Judgments 198

How Should the Acquisition and Use of Materials and Supplies Be Accounted For? 200

Example: Supplies 200

How Should Prepayments Be Accounted For? 203

Example: Prepayments 203

How Should Capital Assets Be Accounted For? 205

Example: Capital Assets 205

Example: Installment Notes 206

Example: Capital Leases 207

How Should Interest and Principal on Long-Term Debt Be Accounted For? 208

Example: Long-term Debt 209

In Practice: California School Children May Pay for Their Own Education 210

How Should Nonexchange Expenditures be Accounted for? 212

Example: Unrestricted Grant with Time Requirement 212

Example: Grant with Purpose Restriction 213

Example: Reimbursement (Eligibility Requirement) Grant 213

How Should Interfund Transactions Be Accounted For? 214

Example: Interfund Transfer 215

Example: Interfund Purchase/Sale 215

How Should Revenues, Expenditures, and Other Financing Sources and Uses Be Reported? 218

In Practice: Is the Coronavirus Pandemic an Extraordinary or Special Event? 218

What is the Significance of the Current Financial Governmental Fund Statements? An Overview 219

Summary 220

Key Terms In This Chapter 221

Exercise for Review and Self-Study 221

Questions for Review and Discussion 222

Exercises 223

Continuing Problem 227

Problems 227

Questions for Research, Analysis, and Discussion 233

Solution to Exercise for Review and Self-Study 233

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