Question

The GASB establishes financial reporting standards for state and local governmental entities. An entity created by a government possessing one or more of the following characteristics should follow GASB standards:
A) Only a and b
B) The potential that another government could unilaterally dissolve the entity and assume their assets and liabilities
C) Any of the above.
D) The power to enact and levy a tax.
E) The power to directly issue debt, for which its interest is exempt from federal taxation

Answer 1

Answer:

C) Any of the above (or below)

• B) The potential that another government could unilaterally dissolve the entity and assume their assets and liabilities
• D) The power to enact and levy a tax.
• E) The power to directly issue debt, for which its interest is exempt from federal taxation

Explanation:

Government Accounting Standards Board (GASB) is a private non-governmental organization that develops accounting standards that state and local governments must follow. The GASB works along with the Federal Accounting Standards Advisory Board (FASB), which is the organization that develops accounting standards for the federal government.

Both the GASB and the FASB help to ensure that financial information regarding the use of public funds is standard across different government entities.