What justifies the different accounting & financial reporting practices of gave. & not-for-profit organizations as compared with business organizations? The fact that governments may have a monopoly on the services that they provide and the taxpayers must provide resources to them regardless of what they are, and efficiency Is hard to measure as well as the quantity or quality of the services. 2) Describe the principal differences that distinguish governmental and not-for- profit organizations from business organizations. Unlike business organizations, governments and not-for-profit organizations: Do not provide benefits that are proportional to the resources provided to them Lack a profit motive Do not have transferable owner rights 1-4) The standard setting bodies for establishing accounting and reporting standards are as follows: state and local governments: GABS (Governmental Accounting
Standards Board) business organizations: FAST (Financial Accounting Standards Board) not-for-profit organizations: FAST for non-government not-for-profit GABS for governmental not-for-profit 4. Federal government/agencies: FAST (Federal Accounting Standard Advisory Board) 1-5) Is interpreted equity the cornerstone of all financial reporting in government? Why or why not? No. Because accountability Is the cornerstone. -6) Dullness’s between fiscal accountability and operational accountability and explain which basic financial statements are intended to assist financial statement users in assessing each type of accountability. Operational accountability is to determine if the government used the resources effectively and efficiently while fiscal accountability Is to determine if the government raised and spent the resources according to budget. The government wide statements assist users in assessing operational accountability and include: Statement of Net Assets Statement of Activities.
Balance Sheet- governmental funds Statement of revenues, expenses, and changes in fund balances- governmental funds Statement of Net Assets – proprietary funds Statements of revenues, expenses, and changes in fund net assets- proprietary fund Statement of Cash Flow- proprietary funds Statement of fiduciary net assets Statement of changes in fiduciary net assets 1-7) What are the 3 sections of a comprehensive annual financial report (CAFE)?