1. Which of the following is not a typical step in the budgeting


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1. Which of the following is not a typical step in the budgeting process for a state or local government? (Points : 4) Request by management for input on the budget Review and revisions of the budget by the administrative staff of each unit Public hearings for citizen input Approval by a majority vote of the citizenry Question 2. 2. The schedule of legally required events in the budgeting process is generally referred to as the (Points : 4) Budget docket. Legal timetable. Hearing schedule. Budget calendar. Question 3. 3. When a not-for-profit (nongovernmental) organization spends money for the purpose for which an external donor intended, then the expense is reported as a (Points : 4) Decrease in temporarily restricted net assets Decrease in unrestricted net assets Decrease in permanently restricted net assets Decrease in current-restricted fund balance Question 4. 4. A significant deficiency of such magnitude that internal control components do not reduce the risk of detection or prevention of material misstatement to an acceptably low level is called a(an): (Points : 4) Material weakness and significant deficiency. System design deficiency. Unacceptable reportable condition. Audit alert item. Question 5. 5. Which of the following financial concepts has been defined by the GASB as “the probability that a government will meet both its financial obligations to creditors, consumers, employees, taxpayers, suppliers, constituents, and others as they become due and its service obligation to constituents, both currently and in the future?” (Points : 4) Liquidity Financial position Financial leverage Financial condition Question 6. 6. The responsibility of governments to justify that their actions in the current period have complied with public decisions concerning the raising and spending of public monies in the short-term is known as: (Points : 4) Operational accountability. Fiduciary responsibility. Legal accountability. Fiscal accountability. Question 7. 7. In budgeting revenues, state and local government administrators should (Points : 4) Be careful not to utilize unauthorized sources or exceed authorized ceilings on revenues from specific sources. Ensure that at least the amount of revenues needed to meet spending needs are raised, even if authorized ceilings on some revenue sources must be exceeded. Utilize all authorized revenues sources and at the maximum amount allowed by law. Ignore “other financing sources” since these resource inflows are not available for appropriation. Question 8. 8. The AICPA Audit and Accounting Guide Health Care Organizations requires that the following statements be prepared for health care organizations: (Points : 4) Balance sheet, statement of activities, statement of changes in equity, statement of cash flows Balance sheet, statement of revenues and expenses, statement of changes in equity, statement of cash flows Balance sheet, statement of operations, statement of changes in equity, statement of cash flows Balance sheet, statement of operations, statement of changes in equity, statement of cash flows, statement of functional expenses Question 9. 9. The comprehensive annual financial report (CAFR) of a government should contain a statement of revenues, expenses, and changes in net assets for (Points : 4) Both proprietary and governmental funds. Proprietary but not governmental funds. Governmental but not proprietary funds. Neither governmental nor proprietary funds. Question 10. 10. A hospital has not transferred risk on malpractice claims to a third-party insurer. Which of the following statements best expresses the general rule regarding the reporting of liabilities for malpractice claims on the face of the balance sheet (or statement of net position)? (Points : 4) They should be reported only to the extent that judgments and settlements are due a…

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