Governmental and Nonprofit Accounting (11th Edition)
11th Edition
ISBN: 9780133799569
Author: Robert J. Freeman, Craig D. Shoulders, Dwayne N. McSwain, Robert B. Scott
Publisher: PEARSON
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Chapter 1, Problem 1.10E
To determine
Identify the correct answer related to nonprofit organizations.
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A characteristic common to governments and not-for-profit organizations is that they do not exist to provide goods or services at a profit or profit equivalent.
True or False
In which one of the following organization's expenditures are driven mainly by the ability of the organization to raise revenues?
a.
Commercial business organisation
b.
None of the options
c.
Both government and commercial business organisations
d.
Government or not for profit organisation
Governments and not-for-profit organizations have the trait of not being in business to make money.
True/False
Chapter 1 Solutions
Governmental and Nonprofit Accounting (11th Edition)
Ch. 1 - Discuss (a) the similarities in accounting for...Ch. 1 - Prob. 2QCh. 1 - Prob. 3QCh. 1 - Contrast the terms expense and expenditure.Ch. 1 - It was noted in this chapter that most of the...Ch. 1 - Prob. 6QCh. 1 - Prob. 7QCh. 1 - Prob. 8QCh. 1 - Prob. 9QCh. 1 - Prob. 10Q
Ch. 1 - Prob. 1.1ECh. 1 - Prob. 1.2ECh. 1 - Prob. 1.3ECh. 1 - In which of the following situations would the...Ch. 1 - Legally adopted budgets of governmental funds are...Ch. 1 - Which of the following statements is false? A fund...Ch. 1 - Prob. 1.7ECh. 1 - Prob. 1.8ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.10ECh. 1 - (Expenditures vs. Expenses) Family Services, a...Ch. 1 - (Statement of Revenues and ExpendituresWorksheet)...Ch. 1 - Prob. 2P
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- Which of the following is a distinguishing characteristic of proprietary funds? Select one: O a. They recognize revenues when they are measurable and available O b. They always earn sufficient revenues to cover their expenses O C They are legally prohibited from selling services to other governmental agencies O d. They charge fees for the services they providearrow_forwardIn Governmental and Nonprofit Accounting, the use of fund accounting is a unique feature, allowing for the segregation of resources into distinct categories based on their source, restrictions, and purpose. True falsearrow_forwardSuppose your company raises funds from outsidelenders. What type of agency costs might occur?How might lenders mitigate the agency costs?arrow_forward
- A forprofit business has a focus on profit and loss and follows GAAP regulations A government entity follows GASB regulations A government entity will have focus on what is being done with the funds received and recommendations for improvement are usually not given Whereas a forprofit entity will be reviewed for how revenue is being recognized and if they follow GAPP regulations and recommendations are given on how to improve compliance with GAAParrow_forward1. The traditional business model of accountingis inadequate for governments and not-for-profitorganizations primarily because businesses differ fromgovernments and not-for-profit organizations in thata. They have different missionsb. They have fewer assetsc. Their assets are intangibled. Taxes are a major expenditure of businesses3. The primary objective of a not-for-profit organizationor a government is toa. Maximize revenuesb. Minimize expendituresc. Provide services to constituentsd. All of the above4. In governments, in contrast to businesses,a. Expenditures are driven mainly by the ability of theentity to raise revenuesb. The amount of revenues collected is a signal of thedemand for servicesc. There may not be a direct relationship between revenuesraised and the demand for the entity’s servicesd. The amount of expenditures is independent of theamount of revenues collected5. The organization responsible for setting accountingstandards for state and local governments is thea.…arrow_forwardDiscuss weaknesses in the public sector accounting and finance in the usage of resources that might hinder the social and public service deliveryarrow_forward
- How does using the accounting support fee to fund the FASB create more independence than using donations?arrow_forwardThe commercial business activities are governed by the market places then the government organizations activities are governed by___________ a. Fund financial statements b. Governmentwide financial statement c. None of the options d. Appropriations and encumbrancesarrow_forwardWhich of the following statements are correct? Fund accounting segregates financial resources with constraints or limitations. General purpose governments may have more than one General Fund. Special revenue funds are used for resources to be used to acquire capital assets. Special revenue funds are not used for resources for payments on long-term debt.arrow_forward
- What is an example of an organization that has not maintained proper financial management?arrow_forwardWhich of the following is not true regarding accounting and financial reporting for nongovernmental, not-for-profit organizations? Multiple Choice Expenses are classified as with or without donor restrictions. Expenses must be reported by function, either in the Statements of Activities or in the notes. Net assets are classified according to donor-imposed restrictions. All of the choices are true.arrow_forward4. The sales and collection cycle applies to: a. Non-profit organizations. b. Corporates. c. none of the mentioned answers. d. Governmental Bodiesarrow_forward
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