Governmental & Not-for-Profit Accounting Flashcards

Which GASB statement established the requirement for government-wide financial statements in addition to fund financial statements?

Answer: GASB Statement No. 34

GASB Statement No. 34 (1999) fundamentally restructured governmental financial reporting by requiring government-wide statements alongside the traditional fund-level statements.

A government levies a special assessment on property owners to finance sidewalk improvements. Which fund should account for the construction activity?

Answer: Capital Projects Fund

Capital Projects Funds are used to account for financial resources restricted for acquiring or constructing major capital facilities, such as sidewalk improvements financed by special assessments.

Under GASB standards, infrastructure assets such as roads and bridges may be reported using the:

Answer: Either the depreciation method or the modified approach

GASB permits governments to use either traditional depreciation or the modified approach (maintaining infrastructure at a set condition level and expensing maintenance costs) for eligible infrastructure assets.

In not-for-profit accounting, an unconditional promise to give (pledge) from a donor should be recognized as:

Answer: Revenue when the pledge is made

Under FASB ASC 958, unconditional promises to give are recognized as contribution revenue (with or without donor restrictions) at the time the promise is made, measured at fair value.

Which of the following is a fiduciary fund type used by governments?

Answer: Pension Trust Fund

Pension Trust Funds are fiduciary funds that account for assets held in trust for pension plan members; fiduciary funds are not included in government-wide statements.

When a not-for-profit organization receives donated services, those services should be recognized as contribution revenue if they:

Answer: Create or enhance nonfinancial assets or require specialized skills provided by professionals

FASB ASC 958 requires recognition of donated services that create or enhance nonfinancial assets, or that require specialized skills (e.g., legal, medical, accounting) that the entity would otherwise need to purchase.

The Management's Discussion and Analysis (MD&A) in a government's annual financial report is classified as:

Answer: Required supplementary information (RSI)

Under GASB 34, MD&A is required supplementary information (RSI) presented before the basic financial statements, providing an analytical overview of the government's financial activities.