Question

T/F

1. If an entity adopts a full accrual basis of accounting, its measurement focus will automatically be on cash.

2. The objective of a typical government or not-for-profit entity includes goals that are difficult to quantify

3.Income taxes are classified as ad valorem taxes.

4. Most infrastructure assets are the responsibility of the federal government, not state and local governments.

Answer 1

Solution. 1.The given statement is False.

Explanation: If an entity adopts a full accrual basis of accounting, its measurement focus will automatically be not only on cash but on all economic resources of an organization.

2.The given statement is True.

Explanation: Government or not-for-profit entity raise capital in form of donations or other measures, to serve for growth and development of society and people at large, for instance, eradication of unemployment or a certain disease, to help people on mass basis, from unwanted future outcomes. So, we can conclude, objective of a typical government or not-for-profit entity includes goals that are difficult to quantify.

3.The given statement is False.

Explanation: Ad valorem taxes are generally levied on property or service value or amount of transaction value and are indirect taxes. Whereas, income tax is a direct tax levied on individual's income during an accounting period.

4.The given statement is True.

Explanation: Federal government has major share in infrastructure investment budget than state and local governments, for economic growth and development of society and to sustain in global market.