Essay Week 2 Ind assignment

1119 WordsDec 18, 20145 Pages
CH. 1 Exercise 1-1 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 A. They have different missions CH. 1 Questions 1. What is the defining distinction between for-profit businesses and not-for-profit entities, including governments? What are the implications of this distinction for financial reporting? The defining distinction is that for profit businesses focus on generating a profit every year, whereas government entities and not-for-profit organizations focus on improving and enhancing the quality of life in their communities. 3. How and why might the importance of the budget…show more content…
Overall strength does not necessarily refer to what is owned but also what can be accessed. CH. 2 Question for Review 12. What is a CAFR? What are its main components? A CAFR is a Comprehensive Annual Financial Report. The main components of a CAFR are the introductory section, financial section, and Statistical section. A budget outlines where funds are going to come from and how those funds will be used. It will specify what funds will be used to pay for specific expenditures. A CAFR includes, in the introductory section, an overview of how the government is divided, a letter from the chief executive, and a summary of the financial section. The financial section contains financial reports for each fund. It also contains an overview of financial performance for the year, and the financial position of the entity at the end of the year. The statistical section contains current and historical data for the entity. This data could be demographical data on the area, tax rates, and any debt still remaining unpaid. A budget contains information for the upcoming year and a CAFR contains information for the past year. CH. 3 Exercise 3-2 1. Upon ordering supplies a government should a. Debit encumbrances and credit reserve for encumbrances 2. Upon receiving supplies that had previously been encumbered a government should a. Debit reserve for encumbrances and credit encumbrances 3. Upon

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