Which of thefollowing is true regarding the use of Special Revenue Funds? a. Special Revenue Funds may be used whenever a government wishes tosegregate income for specific purposes. b. Assigned resources may be accounted for in a Special Revenue Fund. c. Special Revenue Funds may only be used when a substantial portion ofthe resources are provided by restricted or committed revenue sources. d. Once a Special Revenue Fund is established, it will continue to be aSpecial Revenue Fund until all resources are exhausted.
c. Special Revenue Funds may only be used when a substantial portion of
Which of the following statements is not true regarding modified accrual accounting? A. Expenditures and fund liabilities are
recorded when goods and services are received.
B. Debt service expenditures for principal and interest are accrued.
C. Expenditures for claims and judgments
and landfill postclosure care costs of governmental funds should be recognized to the extent that the liabilities are going to be paid with available resources.
D. Compensated absences and special
termination benefits of governmental funds that will not be paid with available resources should be reported as liabilities in the government-wide statements.
B. Debt service expenditures for principal and interest areaccrued.
Regarding interfund transactions, which of the following is not correct?
A. Transaction between funds are not
assumed to be arm's length in nature.
B. Failure to properly report interfund transactions will result in two funds being misstated.
C. Interfund transaction must be repaid.
D. Interfund reimbursement is a payment
by one fund to second fund to repay it for a purchase which belongs in the first fund.
C. Interfund transaction must be repaid.
Which of the following is an interfund transaction?
A. Interfund services provided and used
Which of the following statements is not correct?
A. Transactions between funds of the same government may not be assumed to be arms' length in nature.
B. Most interfund transactions are
eliminated in the government-wide statements.
C. Interfund reimbursements are classified as other financing sources or uses.
D. Interfund transfers are classified as other financing sources or uses.
C. Interfund reimbursements are classified as otherfinancing sources or uses.
The journal entry to record the budget would include:
journal entry
C. A debit to Estimated Revenues Control
The journal entry to record the re-establishment of encumbrances that were outstanding at the close of the prior period would include:
D. A and B would both be included in the journal entry
The journal entry to record the prior year's deferred property taxes (those expected to be collected more than 30 days beyond year end) as revenue in the current year would include:
D. B and C would both be included in the journal entry
The journal entry to record an encumbrance would include:
D. A and C would both be included in the journal entry
The journal entry to record the property tax levy for a municipality would include:
B. A credit to Revenues Control
Reciprocal interfund activity:
A. Is the internal counterpart to exchange transactions
Nonreciprocal interfund activity:
B. Includes interfund transfers and reimbursements
Which of the following is true with respect to Special revenue funds?
A. Special revenue funds are used when it is desirable to provide separate reporting of resources that are designated
for specific purposes.
B. Special revenue funds are used when it is desirable to provide separate reporting for capital projects.
C. Special revenue funds are used when
it is desirable to provide funding for debt service.
D. Special revenue funds are used when it is desirable toprovide separate reporting of resources that are restricted or committed as toexpenditure for purposes other than debt service or capital projects.
D. Special revenue funds are used when it is desirable toprovide separate reporting of resources that are restricted or committed as toexpenditure for purposes other than debt service or capital projects.
Which of the following is not true with respect to Special revenue funds?
A. Special revenue funds may be used for any designatedpurpose to segregate revenues and ensure compliance with restrictions.
Which of the following is not correct with respect to accounting for supplies inventories in a governmental fund?
A. Typically, supplies inventory is a significant portion of governmental fund balances.
B. Supplies inventories may be recorded
using either the purchase method or the consumption method.
C. An amount equal to the ending balance
of supplies is reported as Nonspendable Fund Balance.
D. The consumption method is preferable over the purchase method since it requires no adjustment to supplies expense when preparing the government-wide statements.
A. Typically, supplies inventory is a significant portion ofgovernmental fund balances.
Under the modified accrual basis of accounting, GASB standards for property tax revenue recognition provide that revenue should not be recognized for property taxes collected:
A. After fiscal year end.
B. More than 30 days after fiscal year
end.
C. More than 60 days after fiscal year end.
D. More than 90 days after fiscal year
end.
C. More than 60 days after fiscal year end.
Which of the following is true regarding modified accrual accounting?
A. Modified accrual accounting requires
that all expenditures be recognized on the cash basis.
B. Revenues are recognized in the period in which they
become available and measurable, and expenditures are recognized at the time a liability is incurred, except for principal and interest on long-term debt.
C. Modified accrual accounting is
required for all fund financial statements.
D. All of the above.
B. Revenues are recognized in the period in which theybecome available and measurable, and expenditures are recognized at the time aliability is incurred, except for principal and interest on long-term debt.
When payrolls and other liabilities are incurred and must be paid before substantial amounts of cash will be collected, what type of short-term note is desirable and secured by a government's power to tax?
C. Tax Anticipation Note Payable.
What is a Special Revenue Fund?
A. Fund created to account for all
resources and revenues to be used for the construction or acquisition of capital assets.
B. Fund used to account for all revenue
transactions of a governmental unit that are not accounted for in another fund.
C. Fund used to account for revenues from general taxes or other revenue sources that finance general activities of the government.
D. Fund used to account for revenues from specific taxes or other revenue sources that are restricted or committed to particular activities of the government other than capital projects.
D. Fund used to account for revenues from specific taxes or other revenue sources that are restricted or committed to particular activities of the government other than capital projects.
Expenditures are generally recorded and fund liabilities are recognized
D. When goods and services are received, regardless ofwhether or not resources are available in the fund.
When would a special revenue fund be deemed to have satisfied the eligibility requirement of a reimbursement-type federal grant, under GASB Statement 33?
C. Only as work is completed for a project.
The entry to re-establish encumbrances related to purchaseorders from the prior year would include:
Reserved for Encumbrances.
D. None of the above.
C. A debit to Encumbrances Control.
Which of the following is not likely to be recorded in a special revenue fund?
A. Phone fees restricted to supporting the
emergency 911 access system.
B. Hotel taxes restricted to promoting tourism.
C. Sales taxes restricted to courthouse additions.
D. State motor fuel tax restricted to road maintenance
C. Sales taxes restricted to courthouse additions.
Indicate which of the following use Modified Accrual Accounting?
D. Option A - yes-no-yes-no
Short-term loans which are backed by the taxing power of the governmental unit and used to meet working capital requirements are called:
B. Tax anticipation notes.
A local government was awarded a federal grant in the amount of $1,200,000 to provide for a summer employment program for young people. The grant was a reimbursement grant and was awarded on April 30, 2012. The local government expended the resources as follows: June, 2012, $440,000; July 2012, $400,000; August, 2012, $360,000. The federal government provided the funds the following months. The local government would recognize revenues for the fiscal year ended June 30, 2012 in which amount?
A. $440,000
A donor pledged $200,000 to the fund raising drive of a local government to assist its police officers in obtaining the latest technology. The pledge was made on July 16, 2011 but was conditioned on the government raising an additional $200,000 from other donors. By the fiscal year-end of June 30, 2012, the local government had raised only $5,000 from other donors. What entry would be made for the initial pledge by the local government during the year ended June 30, 2012?
B. No entry is required.
Which of the following is true regarding modified accrual accounting?
B. Expenditures for services used by General Fund departments should be recognized when those services are received, regardless of whether or not resources are available in the fund.
The General Fund of the City of Lexington approved a tax levy for the calendar year 2012 in the amount of $2,000,000. Of that amount, $30,000 is expected to be uncollectible. During 2012, $1,750,000 was collected. During 2013, $100,000 was collected during the first 30 days, $70,000 was collected during the next 30 days, and $50,000 was collected during the next 30 days. During the postaudit, you discovered that the City showed $2,000,000 in revenues. What adjusting entry would you need to make, assuming you decided to allow the maximum amount of revenues for 2012, using modified accrual accounting?
C. Debit Revenues and Credit Deferred Revenues in the amountof $50,000.
TheCity of Brownsville had a balance in the Budgetary Fund Balance -- Reserve forEncumbrances account at the end of 2011 in the amount of $30,000. During 2012,all purchase orders related to the $90,000 were filled, and the invoice amountwas $91,200. Which of the following would be true regarding the Statement of Revenues, Expenditures, and Changes in Fund Balances for 2012? (assumeencumbrances do not lapse)
A. The amount shown for Expenditures would include the $91,200.
Under modified accrual accounting, revenues are recognized when measurable and:
C. Available.
When accounting for the General Fund, the Encumbrances Control account is credited when:
A. A purchase order is filled or canceled.
The City of Pine Cove levied property taxes for the fiscal year ended June 30, 2012 in the amount of $9,000,000. It is estimated that 2% will not be collected. During the year ended June 30, 2012, $8,100,000 in property taxes was collected. It is estimated that $500,000 will be collected during the next 60 days, $265,000 will be collected after 60 days, and $160,000 will not be collected. What is the maximum amount Lonesome Pines can recognize as property tax revenue for the fiscal year ended June 30, 2012 in its Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances, assuming there were no unpaid property taxes at the end of the previous year?
B. $8,600,000.
What is the effect on the General Fund's fund balance when capital assets are purchased during a year from General Fund revenues?
B. Fund balance is decreased.
The initial transfer of cash from the General Fund to establish a motor pool internal service fund would require the General Fund to credit cash and debit:
A. Other Financing Uses-Transfers Out Control.
When supplies ordered by a governmental unit are received at an actual price which is more than the estimated price on the purchase order, the Encumbrance Control account is: A. Credited for the original estimated price for the supplies received.
B. Credited for the actual price on the purchase order.
C. Debited for the estimated price on the purchase order.
D. Debited for the actual price for the supplies received.
A. Credited for the original estimated price for thesupplies received.
Which of the following accounts of a governmental unit is debited when supplies previously ordered are received? A. Encumbrances Control.
B. Reserve for Supplies.
C. Budgetary Fund Balance -- Reserve for Encumbrances.
D. Appropriations.
C. Budgetary Fund Balance -- Reserve for Encumbrances.
Which of the following accounts of a governmental unit is credited to close it at the end of the fiscal year?
B. Encumbrances Control.
The Expenditures control account in the General Fund is debited when:
C. Equipment previously ordered is received.
Which of the following accounts in the General Fund is credited when a purchase order is approved?
C. Budgetary Fund Balance -- Reserve for Encumbrances.
A transfer should be reported in the operating statement of the General Fund as a(an):
of the above, it is a direct increase or decrease to fund balance.
A. Other Financing Source or Use.
The Revenues Control account of the General Fund is debited when:
D. None of the above.
The asset, equipment, used by a department accounted for by the General Fund of a governmental unit should be reported in the:
B. Government-Wide Statements.
Liabilities incurred, such as for accrued payroll, but still unpaid at year-end, should be recorded in the General Fund by a debit to which one of the following accounts?
D. Expenditures Control.
The following items were included in the City of Wilson's General Fund expenditures for the year ended June 30, 2012:
Personal Computer for city clerk - 9000 Furniture for Controllers Office - 15000
How much should be classified as capital assets in Wilson's General Fund balance sheet at June 30, 2012?
A. $-0-.
What would be the effect on the General Fund Fund Balance at the end of the current fiscal year of recording the purchase of a $15,000 new computer?
B. Reduce the General Fund's Fund Balance $15,000.
A local government was awarded a federal grant in the amount of $800,000 to provide for a summer youth employment program for young people. The grant was a reimbursement grant, and a notification of the grant award was received on Apri1 30, 2012. The local government expended the resources as follows:
The federal government sent the funds in the month following the expenditure. The local government would recognize revenues for the fiscal year ended June 30, 2012 in which amount?
D. $350,000.
The General Fund of the City of Bangor purchased water from its Water Utility Fund in the amount of $20,000. The General Fund would debit:
A. Expenditures Control.
General Fund resources were expended in the amount of $180,000 to purchase a new fire truck. The General Fund would debit:
A. Expenditures Control.
Which of the following is true regarding modified accrual accounting?
C. Both (a) and (b) above.
The City of Corning General Fund reported the following at year-end, prior to closing entries: Revenues, $11,000,000; Expenditures, $9,900,000; Other Financing Uses, $500,000; Other Financing Sources, $300,000; Encumbrances, $600,000. Assume the beginning unassigned fund balance was $1,000,000, what is the amount that would be reported as ending unassigned fund balance?
D. Cannot be determined without information concerning constraints placed on the fund's resources.
When recording property taxes, the estimated uncollectible amount of property taxes is:
B. Recognized as a reduction of revenue.
Interfund services provided and used are recognized as:
of the above.
D. Revenues or expenditures.
A December 2012 year-end government should record which of the following as expenditures:
& B.
A. Salaries Payable due January 20, 2013
When delinquent taxes are written off:
B. Fund balance will be unaffected.
In February, X City ordered $500,000 of supplies. On March 17th it received all of the ordered supplies and an invoice of $492,000. Which of the following would be recorded upon receipt of the supplies and invoice?
D. Debit Budgetary Fund Balance -- Reserve for Encumbrances for $500,000.
Which of the following is true regarding accounting for inventories?
A. GAAP permits use of either the consumption method or the purchases method.
B. If inventories are significant, GAAP requires that an asset account be credited in
order to record a fund balance reserve.
C. Under the consumption method, Expenditures equal the amount of inventory received during the period.
D. All of the above are true.
A. GAAP permits use of either the consumption method or the purchases method.
The year end closing entries involve:
D. All of the above.
Debt service expenditures for principal and interest are:
year end if debt service due date is less than 60 days after year.
D. Reported in the government-wide statements
only.
B. Recorded when due but may be accrued at year end if debt service due date is less than 30 days after year end.
When closing out the General Fund and Special Revenue Funds of a state or local governmental unit, the balance of the operating statement accounts and the balances of the budgetary accounts are closed to:
