1. What characteristics distinguish nonbusiness organizations from profit-oriented enterprises?

2. Define a fund as the term is applied in accounting for the activities of governmental units and other nonbusiness organizations.

3. What is the significance of the unreserved fund balance of an expendable fund entity?

4. What are the major classifications of increases and decreases in expendable fund resources?

5. What are the revenue-recognition criteria for expendable fund entities? How do these criteria differ from revenue-recognition criteria for profit-oriented enterprises?

6. Expenditures may be classified by function, activity, object, or organizational unit. Give an example of each classification for a municipality. Which classification is the most appropriate for external financial reporting?

7. Distinguish between an appropriation, an encumbrance, an expenditure, and a disbursement.

8. Distinguish between an expense and an expenditure.