Exam study Guide Government and Not for profit Accounting – Chapter 9 My Book Details are: To answer these questions, Book Link is below: https://reader.yuzu.com/#/ Login – XXXXXXXXXX...

GOVERNMENT AND NON PROFIT ACCOUNTING
    
Q1. Primary government, component units (blended and discrete presentation; presentation in both the governmental and government-wide financial statements).
Ans: Primary government is any kind of state government or any local government with a special purpose. A component unit is a separate government, but is managed by the Primary government officials. If discrete presentation is followed, in government wide statements, component units are mentioned separately than the total column of the primary government. If blending is followed, in government wide statements component units are not shown separately and are blended with the financial statement of the government.
Q2. Parts of the CAFR.
Ans: The parts of CAFR are:
1) Introductory section
a) Cover, title page,
) Content table,
c) Transmittal letter,
d) If management approve any other document.
2) Financial section
a) Report of the auditor,
) Discussion and analysis of the management,
c) Basic financial statements,
d) Any other information that is required,
e) Combining statements, individual statements, and schedules.
3) Statistical section.
Q3. What conditions are necessary for a government to be considered financially independent?
Ans: If the following tasks can be performed by the government without any other government’s approval then the government can be considered as financially independent:
· Determine its budget
· Determine rates and charges and levy taxes
· Can issue bonds.
Q4. Concepts Statement No. 4 definitions of assets and defe
ed outflows; how is prepaid insurance, long term leases, and advances made on reimbursement grants treated?
Ans: Assets are resources that are used by government to provide service in the nature and manner as prescribed by Government. Defe
ed outflow of resources means government uses a resource in one period but the benefit from it comes in some other period. Prepaid insurance will be treated as an asset. Long term lease value is recognized as an asset or a liability. Advances made on reimbursement grants are a defe
ed outflow.
Q5. Consumption method for reporting supplies inventory and prepaid insurance amounts reported for pension expense/pension expenditure.
Ans: Using the consumption method, government report supplies, inventory for pension expense/pension expenditure as asset only but they can only be spend for the purpose of pension and for no other purpose. Using the consumption method, prepaid insurance amounts for pension expense/pension expenditure is recorded at the time they are purchased but are shown as expenditure over the time they are used and deduct the balance as per the amount recognized.
Q6. Reporting the acquisition and depreciation of long term assets for government-wide and fund financial statement reporting.
Ans: Long term assets when acquired are reported in government wide statement at the acquired value and the depreciation is deducted each year and the asset is shown at a net value, depreciation is not shown separately. In fund financial statement only increase and decrease in asset on a whole is reported, so when it is acquired it will be mentioned as an addition, depreciation will...