Question

Governments and nonprofit entities are similar in many ways. Which of the following statements is not truc? MC1-10. LO 1 a. Neither governments nor nonprofit entities have a profil modve. D. Both govemments and nonprofit entities provide services. C. Both govemments and nonprofit entities assess tases. 4. Boin govemments and nonprofit entities often report restricted resources. MC1-11. Why do govemments and nonprofit entities use fund accounting a. 1o help ensure restricted resources are spent for their intended purpose. 0. To help limit errors when posting general journal entries to the general ledger. c. To allow managers more flexibility when budgeting. d. To better match revenues and expenses. LO 2 MC1-12. Which of the following is generally the major source of revenues for governments? a. Voluntary donations. b. Revenue from exchange transactions. с. Тахек. d. Revenue from investments MCI-13. Successful entities prepare budgets. Which of the following entities is generally required by law to prepare a budget? a. Commercial business enterprises. b. Govermments. c. Nonprofit entities. d. All of the above are required by law to prepare a budget. LO 1 MI Users of governmental and nonprofit financial reports use financial statements to answer a number of questions. Which of the following can at least partially be answered by reading a government or nonprofit's financial statements? a. Does the entity have sufficient financial resources to provide a reasonable cushion against near-term revenue shortfalls caused by economic contraction? b. What is the likelihood of the entity's ability to pay its shorn-term and long-term financial obligations? c. What is the entity's ability to continue to provide a particular level of services? d. Financial statements can be used to answer all of the aforementioned questions. e. None of the above. MC1-14. LO 2 Which of the following type of entities commonly uses fund accounting for intermal reporting purposes? a. State and local govemments. b. Business enterprises. c. Nonprofit entities. d. Both a and b. e. Both a and c. LO 3 MCI-15. Which of the following type of entities prepares financial statements using both the modified accrual basis of accounting and the accrual basis of accounting? a. State and local governments. b. Business enterprises. c. Nonprofit entities. d. Federal government. Which of the following type of entities prepares both entity-wide and fund financial statements? LO 3 MCI-16. LO 3 MC1-17. a. State and local governments. b. Business enterprises. c. Nonprofit entities. d. Federal government.

Answer 1

MCI-10.C

MCI-11.D

MCI-12.C

MCI-13.B

MCI-14.D

MCI-15.E

MCI-16.A

MCI-17.C