CGFO Accounting And Financial Reporting - Questions And Accurate Answers What are the two most important financial documents in both public and private organizations? Right Ans - Budget and annual financial report.What is the purpose of the accounting system? Right Ans - To provide a record-keeping framework in which to record (in journals) the transactions authorized by the budget and to reconcile (in ledgers) their cumulative financial impact.What are the six goals of accounting? Right Ans - Provide financial information that is: Understandable, reliable, relevant, comparable, consistent, and timely.What are generally accepted accounting principles (GAAP)? Right Ans - Standards adopted by the accounting profession for recording and reporting transactions.What is the role of the Governmental Accounting Standards Board (GASB)?Right Ans - To provide standards, interpretations, and technical bulletins for state and local governments.What are some topics of discussion concerning GAAP? Right Ans - Basis of accounting, treatment of fixed assets, and long-term debt.What is one benefit of standardizing the accounting system? Right Ans - Comparisons can be made across governments and conclusions drawn on the relative financial health of each.What is another benefit of standardizing the accounting system? Right Ans
- Users can interpret financial reports more easily.
What is the most important benefit of standardizing the accounting system?Right Ans - Assuring users that a common set of rules is being applied to reporting financial operations. 1 / 3
What is the purpose of the operating budget? Right Ans - To plan for spending and expected revenues.What is the purpose of the capital budget? Right Ans - To plan for spending on long-term assets.What is the purpose of the accounting system? Right Ans - To record financial transactions authorized by the budget.What is the purpose of journals in the accounting system? Right Ans - To record transactions.What is the purpose of ledgers in the accounting system? Right Ans - To reconcile the cumulative financial impact of transactions.What is the role of generally accepted accounting principles (GAAP)? Right Ans - To guide the recording, reconciling, and reporting of transactions.What is GAAP? Right Ans - Generally Accepted Accounting Principles What are the goals of GAAP? Right Ans - Accuracy, reliability, and consistency in reporting How do businesses and governments report their results differently? Right Ans - Businesses consolidate results, governments report by funds What is a fund in governmental accounting? Right Ans - A fiscal and accounting entity with a self-balancing set of accounts How do funds function in governmental accounting? Right Ans - Like self- contained businesses with their own accounts and financial reports What is Principle #1 of governmental accounting? Right Ans - Maintain accounts on a GAAP basis and comply with finance-related legal requirements What is Principle #2 of governmental accounting? Right Ans - Funds must be the basis for maintaining accounting records 2 / 3
What is Principle #3 of governmental accounting? Right Ans - Identify and define the eleven basic types of funds used in governmental accounting What is Principle #4 of governmental accounting? Right Ans - Maintain a minimum number of funds and only those required by law What is Principle #5 of governmental accounting? Right Ans - Maintain a distinction in accounting records among capital assets of different funds What is Principle #6 of governmental accounting? Right Ans - Maintain historical cost of capital assets and long-term debt in accounting records What is Principle #7 of governmental accounting? Right Ans - Record depreciation of capital assets in accounting records What is Principle #8 of governmental accounting? Right Ans - Maintain a clear distinction between long-term liabilities of specific funds and the general government What is Principle #9 of governmental accounting? Right Ans - Use accrual basis for government-wide financial statements and modified accrual basis for fund-specific financial statements What is Principle #10? Right Ans - Annual budget adoption and comparison with actual results.What is Principle #11? Right Ans - Recognition and reporting of interfund transfers depending on reciprocity.What is Principle #12? Right Ans - Use of common terminology and classification system.What is Principle #13? Right Ans - Preparation of interim financial reports and CAFR follows specified format.What is the difference between accounting methods in government and private sector? Right Ans - Government uses modified accrual method for certain funds.
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