1. Identify and describe the five environmental differences between governments and for-profit business enterprises as identified in the Governmental Accounting Standards Boards “Why Governmental Accounting and Financial Reporting Is—and Should Be—Different.
2. Identify and briefly describe the three organizations that set standards for state and local governments, the federal government, and nongovernmental not-for-profit organizations.
3. Accounting and financial reporting for state and local governments use, in different places, either the economic resources measurement focus and the accrual basis of accounting or the current financial resources measurement focus and the modified accrual basis of accounting. Discuss the difference in measurement focus and basis of accounting related to (a) the conceptual differences, (b) differences in revenue recognition, (c) differences in expense expenditure recognition, (d) differences in recognition of fixed assets, and (e) differences in the recording of long-term debt.
4. GASB considers budgetary accounting and reporting to be important. List the principles outlined by GASB related to budgetary accounting and reporting
5. For each of the items below, identify which funds would be used to account for the item and provide a justification for your answer
A. A city government issued general obligation bonds to finance the construction of a new jail
B. A tax of 1.00 per resident phone number is collected by a city government from the phone company. This amount is required by state law to be used for the operation of the 911 emergency phone systems.
C. A county government expended $1 million to expand the water treatment plant.
D. A donor provided investments totaling $4 million to create an endowment, the earnings of which will be used to provide scholarships.
E. A donor provided 50,000 to be used to purchase newspaper and magazine subscriptions for the public library. There is no requirement that the original principal may not be spent.
F. A city government sold surplus street maintenance trucks for 10,000
G. A city government contributed 500,000 to a pension plan administered by the city for its teachers, public safety employees, and employee of the water department.