Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Question
Chapter 17, Problem 2P
To determine
Identify the correct option out of the given statements.
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City government officials are analyzing a complicated financial transaction. A GASB Implementation Guide seems to provide one reporting answer and a GASB Concepts Statement seems to provide a different answer. What reporting is most appropriate? Choose the correct.a. The government can use either method and still be in conformity with GAAP.b. Government officials should follow the guidance provided by the GASB Implementation Guide.c. The city’s financial statements must be in conformity with the GASB Concepts Statement.d. The city’s accountants should seek some type of compromise that takes both of these pronouncements into consideration.
Which of the following should not be included in the introductory section of a city's CAFR?
A.) Management discussion and analysis
B.) Letter of transmittal
C.) Government Finance Officer's certificate of achievement for excellence in financial reporting
D.) Photos of city officials
The City of Francois, Texas, has begun the process of producing its current comprehensive annual financial report (CAFR). Several organizations that operate within the city are related in some way to the primary government. The city’s accountant is attempting to determine how these organizations should be included in the reporting process.a. What is the major criterion for inclusion in a government’s CAFR?b. How does an activity or function qualify as a special purpose government?c. How is the legal separation of a special purpose government evaluated?d. How is the fiscal independence of a special purpose government evaluated?e. What is a component unit, and how is it normally reported on government-wide financial statements?f. How does a primary government prove that it can impose its will on a component unit?g. What is meant by the blending of a component unit?
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- Explain to a nonfinancial audience explaining how increasing scrutiny and demand for accountability by the public has influenced reporting for governmental entities. Explain why governments use fund accounting. Analyze the importance of budget and control of government resources. Explain how the GASB revenue and expense recognition model may improve the usefulness of the information governments report to the public. Format references according to APA guidelines.arrow_forwardIS IT AN ASSET OR A LIABILITY? During the long evolution of government accounting, many scholars have discussed its unique features. In the August 1989 issue of the Journal of Accountancy, R. K. Mautz described the reporting needs of governments and not-for-profit organizations (such as charities) in his essay “Not-For-Profit Financial Reporting: Another View.” To illustrate the governmental accounting challenges, Mautz examined the method by which a city should record a newly constructed high school building. Conventional business wisdom would say that such a property is an asset owned by the government. Thus, the cost should be capitalized and then depreciated over an estimated useful life. However, Mautz pointed to paragraph 26 of FASB Concepts Statement No. 6, which asserted that an essential characteristic of an asset is “a probable future benefit . . . to contribute directly or indirectly to future net cash inflows.” Mautz reasoned that the school building cannot be considered an…arrow_forwardThe accountants for a city are attempting to determine the proper reporting for a new transaction so that the financial statements are in conformity with generally accepted accounting principles. No authoritative answer can be found. What should happen next? Choose the correct.a. The city will receive a qualified audit report on its financial statements.b. The accountants can report the transaction in the way that they believe is best.c. The accountants should study other nonauthoritative sources such as GASB Concepts Statements and the official standards produced by FASB.d. The city will separate the transaction and report it separately in such a way as to draw attention to the method of reporting that was followed.arrow_forward
- Which of the following has the least amount of official authority for the financial reporting of state and local governments? Choose the correct.a. GASB Technical Bulletins.b. GASB Statements of Governmental Accounting Standards.c. GASB Concepts Statements.d. GASB Implementation Guides.arrow_forwardThe body currently responsible for developing local governmental accounting standards is the a. Financial Accounting Standards Board (FASB) b. Governmental Accounting Standards Board (GASB) c. National Council on Governmental Accounting (NCGA) d. Municipal Finance Officers Association (MFOA)arrow_forward1) State whether each of the following items should be classified as taxes, licences and permits, intergovernmental revenues, charges for services, fines and forfeits or miscellaneous revenue in a governmental fund. a) Sales and use taxes levied by the government. 2) Explain the income & expenditure and Receipts & payment? Draw the format with example? What is the difference of both the statement? b) Payments by citizens for use of the city pool. c) Building permits to construct a deck at a residencearrow_forward
- What is the significance of the Certificate of Achievement for Excellence in Financial Reporting awarded to the City of Phoenix by the Government Finance Officers Association?arrow_forwardJustify the presentation of the required accounting and financial reports to a city, when it uses funds, such as Capital project funds or Debt services funds, including the notes to the reports?arrow_forwardWhich of the following best identifies the purpose of the government-wide financial statements? Multiple Choice To provide an overview of how government would operate as a business-type entity. To provide detailed financial information on how the government’s financial performance compares to the prior reporting period. To provide an overview of the total government’s financial information. To To provide detailed financial information about different funds of government.arrow_forward
- A city constructs curbing in a new neighborhood and finances it as a special assessment. Under what condition should these transactions be recorded in an agency fund? Choose the correct.a. Never; the work is reported in the capital projects funds.b. Only if the city is secondarily liable for any debt incurred to finance construction costs.c. Only if the city is in no way liable for the costs of the construction.d. In all cases.arrow_forwardWhat benefits are derived from including the management’s discussion and analysis in state and local governmental financial reports? What information is required to be included in the MD&A?arrow_forwardThe organization primarily responsible for ensuring that public officials are using public funds efficiently, economically, and effectively is thea. Governmental Internal Audit Agency (GIAA).b. Central Internal Auditors (CIA).c. Securities and Exchange Commission (SEC).d. Government Accountability Office (GAO).arrow_forward
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