Multiple Choice. Choose the best answer.
1. Federal statutes assign responsibility for establishing and maintaining a sound financial structure for the federal government to which of the following:
a. Comptroller General of the United States.
b. Comptroller General. Secretary of the Treasury, and Director of the Office of Management and Budget.
c. Secretary of the Treasury and the Comptroller General.
d. Federal Financial Accounting Standards Board.
2. The process for establishing generally accepted accounting principles (GAAP) for federal agencies includes:
a. A recommendation of the Federal Accounting Standards Advisory Board (FASAB) to the three principals (sponsors) to issue a statement.
b. Approval of all six federal and three nonfederal members of the FASAB.
c. Approval by the Governmental Accounting Standards Board.
d. All of the above.
3. The hierarchy of accounting principles and standards for federal government entities is described in:
a. The FASB’s pronouncements, both statements and technical bulletins.
b. The FASAB’s concepts statements and statements of federal financial accounting standards (SFFAS).
c. The AICPA’s Statement of Auditing Standards No. 91, which amends SAS No. 69.
d. The GASB’S Statement No. 34.
4. Objectives that are identified by Statement of Federal Financial Accounting Concepts (SFFAC) No. I for federal financial reporting include all of the following except:
a. Budgetary integrity.
b. Operating performance.
c. Stewardship.
d. Transparency.
5. Which of the following is a required basic financial statement for federal agencies?
a. Statement of net cost.
b. Statement of cash flows.
c. Statement of financing.
d. Statement of budgetary revenues and expenditures.
6. Assuming that an agency’s unused appropriations expire at year-end but appropriations continue in effect for obligated amounts (purchase orders, etc.), which of the following budgetary accounts would likely be found in agency’s post-closing trial balance at year-end?
a. Commitments and Other Appropriations Realized.
b. Undelivered Orders and Other Appropriations Realized.
c. Expended Authority and Undelivered Orders.
d. Commitments and Undelivered Orders.
7. Which of the following is a correct mathematical relationship among proprietary account balances’?
a. Net Position equals Total Assets minus Total Liabilities.
b. Fund Balance with Treasury equals Unexpended Appropriations.
c. Cumulative Results of Operations equals Revenues and Financing Sources minus Operating/Program Expenses.
d. Disbursements in Transit equals Fund Balance with Treasury minus Accounts Payable and Other Current Liabilities.
8. Which of the following is required by OMB Circular A—136 in the basic financial statements for a federal entity?
a. Statement of net assets.
b. Statement of changes in fund balances.
c. Statement of net cost.
d. Statement of activities.
9 of the following is not a true statement about the difference between accounting and reporting for federal government agencies versus state and local governments?
a. The federal government uses a dual-track method of accounting for proprietary accounts and budgetary accounts; state and local governments also use budgetary accounting.
b. State and local governments use accrual accounting in the government-wide statements as well as proprietary and fiduciary funds; federal agencies use only the cash basis of accounting.
c. The budget is recorded in the general ledger of a state or local government and a federal agency.
d. State and local governments do not account for apportionments and most do not account for allotments.
10. Which of the following statements is true about the United States government-wide financial report?
a. Since 1997, the financial statements of the U.S. government as a whole have been audited by an external certified public accounting firm.
b. The majority of the 24 major federal agencies required to be audited have received unqualified audit opinions by the OMB.
c. The Comptroller General of the United States has rendered a disclaimer of opinion on the U.S. government’s consolidated financial statements for as long as that office has audited those statements.
d. None of the above statements are true.