ACC 410 WEEK 3 QUIZ 2

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Chapter 3

Issues of Budgeting and Control

TRUE/FALSE (CHAPTER 3)

1. Capital budgets focus on plans for the acquisition and construction of fixed assets.
2. The accounting cycle for most governments is two to three years, consistent with the terms of elected officials.
3. Most budgets are prepared on a cash or modified cash basis.
4. Neither the GASB nor the FASB sets standards for budgetary accounting.
5. State and local governments must prepare their GAAP budgetary comparisons on the modified accrual basis of accounting.
6. When budgets are integrated into a government’s accounting system, estimated revenues are debited.
7. Encumbrances and expenditures both reduce total fund balances of state and local governments.
8. Not-for-profit budgets focus first on revenues and secondarily on expenditures.
9. State and local governments’ budget-to-actual comparisons present both original and final budget amounts.
10. Cash-basis budgets help governments focus on interperiod equity.
11. Reserve for encumbrances accounts should be closed at year-end.
12. Capital budgets concentrate on long-lived assets.

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