Accounting For Governmental & Nonprofit Entities
18th Edition
ISBN: 9781259917059
Author: RECK, Jacqueline L., Lowensohn, Suzanne L., NEELY, Daniel G.
Publisher: Mcgraw-hill Education,
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Chapter 1, Problem 19.2EP
To determine
Identify the statement which stands true for both government and non-profit organization.
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Describe how monies received by an organization functioning as an agent, trustee, or intermediary, rather than as a donor or donee, are accounted for. What may be the rationale for the discrepancies?
Accounting purpose of Governmental and not-for-profit organizations are different from business organizations due to the following reasons EXCEPT:
a. Different purposes in society
O b. Financed by resource providers who do not expect benefits proportional to the resources they provide
c. Management has a special duty to be accountable for how resources are used in providing services
O d. Accountable to the stakeholders of an organization
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 GAAP
Chapter 1 Solutions
Accounting For Governmental & Nonprofit Entities
Ch. 1 - Prob. 1QCh. 1 - Prob. 2QCh. 1 - Prob. 3QCh. 1 - Prob. 4QCh. 1 - Explain the meaning and significance of...Ch. 1 - Prob. 6QCh. 1 - Prob. 7QCh. 1 - What are the three sections of a comprehensive...Ch. 1 - Prob. 9QCh. 1 - Prob. 10Q
Ch. 1 - Prob. 11CCh. 1 - Prob. 12CCh. 1 - Prob. 13CCh. 1 - Prob. 14CCh. 1 - Prob. 16CCh. 1 - Prob. 18EPCh. 1 - Prob. 19.1EPCh. 1 - Prob. 19.2EPCh. 1 - Prob. 19.3EPCh. 1 - Prob. 19.4EPCh. 1 - Prob. 19.5EPCh. 1 - Prob. 19.6EPCh. 1 - Prob. 19.7EPCh. 1 - Prob. 19.8EPCh. 1 - Prob. 19.9EPCh. 1 - The primary reason that not-for-profit (NFP)...Ch. 1 - Matching. (LO1-1, LO1-2, LO1-4, LO1-5) For each...Ch. 1 - Prob. 21EP
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Similar questions
- Argue that donated assets should not be reported in company’s balance sheet. Base your arguments on the conceptual framework.arrow_forwardA 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 Falsearrow_forwardHow does using the accounting support fee to fund the FASB create more independence than using donations?arrow_forward
- Explain the accounting for funds received by an organization acting as an agent, a trustee, or an intermediary, rather than as a donor or donee. What might be the reasoning for the differences?arrow_forwardIs there a difference between a balance sheet of a profit organization with a non-profit organization?arrow_forwardIf a reporting entity has a choice of either expensing or capitalizing an item of expenditure, and if the entity is subject to a high degree of political scrutiny, then what choice would be predicted by the political cost hypothesis of Positive Accounting Theory? Explain your answerarrow_forward
- Suppose your company raises funds from outsidelenders. What type of agency costs might occur?How might lenders mitigate the agency costs?arrow_forwardA governmental agency can best be described by which of the following statements? A. has a primary purpose of making a profit B. has a primary purpose of using taxpayer funds to provide services C. produces goods for sale to the public D. has regular shareholder meetingsarrow_forward3. Which of the following characteristics distinguishes a government or not-for-profit entity from a business? a. There is always a direct link between revenues generated and expenditures/expenses incurred. b. Capital assets are used to produce revenues and save costs. c. Revenues are always indicative of demand for goods and services. d. The mission of the entity may include goals other than maximizing profit.arrow_forward
- Which is not a scenario wherein revenue is recognized over time? a. The customer simultaneously receives and consumes the benefits by the entity’s performance b. The entity’s performance creates or enhances an asset that will be transferred to the customer at a future date c. The entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date d. All of the above are scenarios wherein revenue is recognized over time e. None of the abovearrow_forward6. It is a redistribution of income and wealth through government making a payment,without goods or services being received in return a. Capital expenditure b. Consumption c. Utilization d. Transfer payments 7. The funds allocated to products and services used to satisfy citizens' needs are classified as ___________________ expenditures. a. Capital expenditure b. Consumption c. Utilization d. Transfer payments 8. Retirement programs, unemployment benefits, financial aid and other expenses that involve transfers of money are considered _________________. a. Capital expenditure b. Consumption c. Utilization d. Transfer payments 9. Transfer payments are included in the gross domestic product or GDP. a. True b. False c. Maybe 10.Which statement is NOT true? a. Government expenditure has direct control of a country's economic growth and businesses. b. investments in education and infrastructure are not likely to boost economic growth and labor productivity in the long run. c. Government…arrow_forwardWhich of the following factors, if present, would indicate that a transaction is not a contribution? a. The resource provider entered into the transaction voluntarily. b. The resource provider received value in exchange. c. The transfer of assets was unconditional. d. The organization has discretion in the use of the assets received.arrow_forward
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