Question

7. The independent authority or board for accounting and reporting that sets the standard for state and      local government in the US is:

1. Financial Accounting and Standards Board (FASB)
2. Federal Accounting Standards Advisory Board (FASAB)
3. Governmental Accounting Standards Board (GASB)
4. Internal Revenue Service

_______8. Which type of estimating solvency is measured by operating ratio: total revenue/total expenses?

1. Cash Solvency
2. Long –Run Solvency
3. Service Level Solvency
4. Budget Solvency

Answer 1

7) Answer: C

The Governmental Accounting Standards Board (GASB) is the source of generally accepted accounting principles (GAAP) used by state and local governments in the United States. As with most of the entities involved in creating GAAP in the United States, it is a private, non-governmental organization. The GASB has issued Statements, Interpretations, Technical Bulletins, Concept Statements and Implementation Guides defining GAAP for state and local governments since 1984.