Authoritative GAAP for state and local governments divided into two categories with the first category having more authority than the second. Explain the sources of GAAP found in both of these categories.
Explanation of Solution
Two categories of authoritative GAAP for local and state governments are Category A and Category B. Where category A is build up from GASB official statements and also interpretations that released previously still remain in effect and highest level of authority are also included. To provide the guidance of this type about U.S GAAP other method used by board. Category B is build up from GASB technical bulletins, any literature of AICPA, and implementation guides of GASB which has been cleared by GASB. Auditors and accountants in order to establish proposed reporting treatment validity they look first category A then category B in case of answer is not found.
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Chapter 17 Solutions
ADVANCED ACCTG W/CONNECT CODE >BI<
- Which of the following is necessary for a special purpose local government to be viewed as a primary government for reporting purposes? It must have a separately elected governing body. It must have specifically defined geographic boundaries. It must be fiscally independent. It must have corporate powers to prove that it is legally independent.arrow_forwardWhy have accountability and control been so important in the traditional accounting for state and local government units?arrow_forwardWhich of the following has the least amount of official authority for the financial reporting of state and local governments? Choose the correct.a. GASB Technical Bulletins.b. GASB Statements of Governmental Accounting Standards.c. GASB Concepts Statements.d. GASB Implementation Guides.arrow_forward
- How has the dual system of financial statements impacted the financial reporting of state and local governments?arrow_forwardWhich of the following is not necessary for a special purpose local government to be viewed as a primary government for reporting purposes? Choose the correct.a. It must have a separately elected governing body.b. It must have specifically defined geographic boundaries.c. It must be fiscally independent.d. It must have corporate powers to prove that it is legally independent.arrow_forwardA primary government can be either a general purpose government or a special purpose government. What is the difference in these two? How does an activity qualify as a special purpose government?arrow_forward
- Which of the following best describes a “primary government”? Select one: A. A primary government must be both legally separate and fiscally independent. B. A primary government, although legally separate, may be fiscally dependent upon another governmental entity. C. Although a primary government has a separately elected governing body, it may not be a legally separate entity. D. The only requirement is for a primary government to have a separately elected governing body; It does not have to be either legally separate or fiscally independent.arrow_forwardExplain the different purposes of the fund-based and government-wide financial statements of a state or local government and the primary differences between the fund-based and government-wide operating statements.arrow_forwardWhich of the following is true regarding the government-wide financial statements? a. The government-wide financial statements include the statement of net position and the statement of activities. b. The government-wide financial statements are to be prepared using the economic resources measurement focus and the accrual basis of accounting. c. The government-wide financial statements include information for governmental activities, business-type activities, the total primary government, and its component units. d. All of the above are true.arrow_forward
- Discuss state and local governments financial statements and what are the potentials changes to them?arrow_forwardUsing information in the relevant IPSASs, give a comprehensive definition (with examples) of revenue and expenditure appropriate for a Central Government.arrow_forwardMultiple choice:  In the reporting of governmental activities, fiscal accountability is demonstrated by: a. Both fund and government-wide financial statements. b. Government-wide financial statements. c. Neither fund nor government-wide financial statements. d. Fund financial statements.arrow_forward