2. 3. 4. 5. Which of the following activities is performed by governments but not by not-for-profit organizations? a. Issuing federal tax-free debt b. Receiving grants c. Preparing budgets d. Providing services to constituents Answer: a Government and nonprofit accounting focuses on which of the following? a. Calculating profit or loss. b. Protecting investors from fraud c. Demonstrating accountability d. Reporting to management Answer: Which of the following is not a reason that governmental accounting is different from business accounting? a. Different users of financial reports b. Expected long-life of governments c. Capital assets are used by governments d. Revenues that are unique to governments Answer: Which basis of accounting is used for the basic governmental functions of state and local governments? a. Cash basis of accounting b. Modified accrual basis of accounting c. Accrual basis of accounting d. Regulatory basis of accounting Answer: b