ACC week essay

Government and Not-For-Profit Accounting Comprehensive Annual Financial Report and Budget Stephanie Wallis AC 460 Neil Fischer April 21, 2015 Exercise 1-1 Question 1, 3, 4, 5, 7, and 8 1 .

(1 . ) The traditional business model of accounting is inadequate for governments and not-for-profit organizations primarily because businesses differ from governments and not-for-profit organizations in that Answer: A. They have different missions 2. (3. ) The primary objective of a not-for-profit organization or a government is to Answer: D. All of the above .In governments, in contrast to Answer: C.

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There may not be a direct relationship between revenues raised and the demand for entity’s service 4. (5. ) The organization responsible for setting accounting standards for State and local governments is the Answer: B. GABS 5.

(7. ) Governments differ from businesses in that they Answer: D. They do not issue common stock 6. (8. ) Interpreted equity refers to a condition whereby Answer C.

Current-year revenue are sufficient to pay for current year services Questions for Review and DiscussionWhy is it more difficult to distinguish between internal and external users in governments than in businesses? Because the external, which are the taxpayers, may have a significant roles in creating policies that are often considered within managers. Nevertheless, legislators which are the internal are the ones that set the policies, but the external of executive branch must report to the legislative branch. Differentiating beјen a budget and a comprehensive annual financial report (CAFE) A budget is a statement of the future expenses upon the sequence of the upcoming year.The income reserve will be consumed by the expenses. A description of a budget is a cash basis of what is needed in the activities that will be performing for the upcoming year. Each year the budget changes because there will be more or less activities that will incur from one year to another. A comprehensive annual financial report (CAFE) is to look back on the activities of what happen the prior year.

There is items that are provided in the CAFE that is not in the cash based budget. The budget is more for short-term, but when looking at he long-term budget would be using CAFE.There are more in the CAFE because they provide additional items and some other expenditures that is not one the budget that would be on the CAFE.

The liabilities for the future would not have knowledge to. The reason why net difference from revenue and expenses is called change in net assets is because of CAFE is using the balance sheet to report but the budget does not show all the items that the CAFE. Exercise 3-2 Question l, 2, 3, 6, 8, and 9 1. Upon ordering supplies a government should Answer: A. Debt encumbrance and credit reserve for encumbrances 2.

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