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If the U.S. Department of the Treasury, GAO, or OMB objects to a FASAB standard, it is returned to the FASAB for reconsideration.

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When the federal government makes a direct loan at an interest rate below the prevailing Treasury rate (a subsidized loan) , an asset should be recorded for which of the following amounts?


A) The face amount of the loan.
B) The present value of the future principal and interest payments discounted at the stated rate.
C) The present value of the future principal and interest payments discounted at the comparable Treasury rate.
D) No asset should be recorded.

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Federal government trust funds are


A) Composed of funds restricted by the donor/contributor.
B) Like endowment funds-only the income, not the principal, can be expended.
C) Any funds designated by law as trust funds.
D) Composed of funds that by law are dedicated to certain activities or programs.

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Which of the following is NOT a main section of the Financial Report of the United States Government?


A) Introductory section including letter of transmittal and MD&A.
B) Other stewardship information section.
C) Required supplemental information section.
D) Statistical section.

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Which of the following is NOT one of the basic government-wide federal financial statements?


A) Balance sheet.
B) Statement of operations and changes in net position.
C) Statement of net cost
D) Statement of custodial assets.

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Why is the FASAB named an "advisory board"? What happens if the GAO or the OMB rejects one of its standards?

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The board is titled "advisory" because t...

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Which of the following is NOT a basic financial statement for a federal agency?


A) Balance sheet.
B) Statement of budgetary esources.
C) Statement of financing.
D) Statement of stewardship assets.

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Which of the following funds is/are included in the category federal trust funds?


A) Old-Age and Survivors Insurance Fund (Social Security) .
B) Supplementary Medical Insurance Fund (Medicare) .
C) Neither (a) nor (b) .
D) Both (a) and (b) .

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One of the major problems encountered by the FASAB in setting standards for the federal government-wide financial statements is how to classify future benefit payments to social security beneficiaries. What are the underlying issues related to social security? How has the FASAB resolved the issues? How is social security information presented in federal financial statements?

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In large measure the accounting controve...

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When the federal government makes a direct loan at an interest rate below the prevailing Treasury rate (a subsidized loan) , an expense should be recorded for which of the following amounts?


A) The difference between the face value of the loan and the present value of the estimated net cash receipts.
B) The difference between the present value of the estimated net cash receipts at the stated rate of interest and the present value of the net cash receipts at the prevailing interest rate.
C) The fair value of the loans.
D) No expense is recognized.

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The FASAB has explained that government liabilities are attributable to "events." What are "events"? What types of events has FASAB identified? Give some examples of each type. When should liabilities be recognized for each type of event?

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The FASAB has explained that "events" en...

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A federal agency established to provide direct loans for older Americans enrolled in school or college made a three-year, 3 percent direct loan of $3,000 to be repaid in three equal annual installments of $1,060.59. The prevailing Treasury rate on short- and intermediate-term securities is 6 percent. REQUIRED: Prepare journal entries to record the loan and the three payments. If no entry is required, write "No entry required." Present value factors, if needed Present value of an annuity for 3 periods @ 6% = 2.67301 Present value of an annuity for 3 periods @ 3% = 2.82861 Present value of $1, @ 6%, 3 periods = .83962 Present value of $1, @ 3%, 3 periods = .91513

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a)
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(Present value of expected payment...

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What is meant by a "unified budget"? Why are Social Security and Postal Service receipts and disbursements not included in the unified budget?

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The unified budget encompasses all four ...

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The unified budget of the federal government was originally intended to include which of the following fund types?


A) General fund, all special funds, all trust funds, and all revolving funds.
B) General fund, all special funds, some trust funds, and all revolving funds.
C) General fund, some special funds, some trust funds, and all revolving funds.
D) General fund, all special funds, and all revolving funds.

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Stewardship assets are long-lived assets that are not given balance sheet recognition by the federal government.

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Which of the following is a NOT a true statement with regard to accounting and reporting for federal government agencies versus accounting and reporting for state and local governments?


A) In their respective government-wide statements, state and local governments use the accrual basis of accounting whereas federal agencies use the cash basis of accounting.
B) State and local governments record appropriations whereas federal agencies record apportionments.
C) Federal agencies use a dual-track method of accounting for proprietary accounts and budgetary accounts; state and local governments use both budgetary and proprietary accounts only in governmental funds.
D) The budget is recorded in the general ledger of a state or local government, but not in the general ledger of a federal agency.

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Which of the following has the responsibility for auditing all federal agencies and programs?


A) OMB.
B) FASAB.
C) GAO.
D) The Department of the Treasury.

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Which of the following is a true statement about the Federal Accounting Standards Advisory Board?


A) It is a sub-agency of the OMB.
B) It is a shared jurisdiction board created following an agreement by three federal agencies.
C) It is an executive office function.
D) It was created by and reports to Congress.

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Amounts due to social security beneficiaries should be "booked" (recorded as a liability)


A) As beneficiaries earn benefits.
B) When beneficiaries reach the eligibility age for benefits..
C) When benefits become due and payable.
D) When the government formally acknowledges that benefits are due and payable.

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The FASAB requires that federal government agencies accrue nonexchange revenues when a specifically identifiable, legally enforceable claim to resources arises, to the extent that collection is probable and the amount is measurable. Thus, fines and penalties should be accrued


A) Upon expiration of the period during which the offender may contest a court summons.
B) When the offender pays the fine before a court date.
C) When the court imposes a fine.
D) Any of the above would meet the criteria.

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