Question 1

Governments generally do not have to get formal legislative approval for enterprise fund budgets or incorporate them into their accounting systems.

Accepted Answer

A) True 
 B)False

Question 2

The operating statement required as one of the three basic financial statements for proprietary funds is called the statement of revenues,expenditures,and changes in net position.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following are required basic statements of a proprietary fund?

Accepted Answer

A) Balance sheet and income statement. 
B) Balance sheet;statement of revenues,expenses,and changes in retained earnings;and statement of cash flows. 
C) Statement of net assets and statement of revenues,expenses,and changes in fund net assets. 
D) Statement of net position;statement of revenues,expenses,and changes in net position;and statement of cash flows. 
A) Balance sheet and income statement. 
B) Balance sheet;statement of revenues,expenses,and changes in retained earnings;and statement of cash flows. 
C) Statement of net assets and statement of revenues,expenses,and changes in fund net assets. 
D) Statement of net position;statement of revenues,expenses,and changes in net position;and statement of cash flows.

Question 4

During the current year,the Adams County Solid Waste Landfill,which is accounted for in an enterprise fund,installed wells designed to assist in the ground water monitoring process after closure of the landfill.The landfill has reached 40 percent of its capacity and is expected to continue to accept waste until 2016.The wells cost $80,000 to acquire and install.The appropriate entry to record the addition is a credit to Cash for $80,000 and an $80,000 debit to

Accepted Answer

A) Landfill assets. 
B) Landfill expenses. 
C) Liability for landfill costs. 
D) Deferred outflow of resourcs. 
A) Landfill assets. 
B) Landfill expenses. 
C) Liability for landfill costs. 
D) Deferred outflow of resourcs.

Question 5

The revenues of an internal service fund are the expenditures and expenses of other funds of that government.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not a proprietary fund?

Accepted Answer

A) City Water Enterprise Fund. 
B) City Motor Pool Internal Service Fund. 
C) City Hall Capital Projects Fund. 
D) None of the above.They are all proprietary funds. 
A) City Water Enterprise Fund. 
B) City Motor Pool Internal Service Fund. 
C) City Hall Capital Projects Fund. 
D) None of the above.They are all proprietary funds.

Question 7

Any internal service fund balances that are not eliminated in the consolidation process should generally be presented on the government-wide financial statements

Accepted Answer

A) In the business-type activities column. 
B) In the internal service fund column. 
C) In the governmental activities column. 
D) These balances should not be presented on the government-wide financial statements. 
A) In the business-type activities column. 
B) In the internal service fund column. 
C) In the governmental activities column. 
D) These balances should not be presented on the government-wide financial statements.

Question 8

Jona City has designated an internal service fund as the single fund to account for its self-insurance activities.Most of the insured activities,such as the police department,fire department,and general government functions,are accounted for in the general fund.What is the maximum amount that can be charged to expenditure in the general fund related to the self-insurance activities?

Accepted Answer

A) The amount of "premium" charged to the general fund by the internal service fund. 
B) The amount of actual losses incurred by the insurance activity. 
C) The actuarially determined amount necessary to cover claims,expenditures,and catastrophic losses. 
D) The amount transferred from the general fund to the internal service fund for self-insurance purposes. 
A) The amount of "premium" charged to the general fund by the internal service fund. 
B) The amount of actual losses incurred by the insurance activity. 
C) The actuarially determined amount necessary to cover claims,expenditures,and catastrophic losses. 
D) The amount transferred from the general fund to the internal service fund for self-insurance purposes.

Question 9

Linden County operates a solid waste landfill that is accounted for in an enterprise fund.The county calculated this year's portion of the total closure and postclosure costs associated with the landfill to be $300,000.The entryies)to record this cost should be

Accepted Answer

A) Debit landfill expense $300,000;Credit liability for landfill costs $300,000 
B) Debit landfill expense $300,000;Credit liability for landfill costs $300,000 AND include an addition of $300,000 on the schedule of changes in long-term obligations. 
C) Show only an addition of $300,000 on the schedule of changes in long-term obligations. 
D) No entry in the fund;No addition on the schedule of changes in long-term obligations. 
A) Debit landfill expense $300,000;Credit liability for landfill costs $300,000 
B) Debit landfill expense $300,000;Credit liability for landfill costs $300,000 AND include an addition of $300,000 on the schedule of changes in long-term obligations. 
C) Show only an addition of $300,000 on the schedule of changes in long-term obligations. 
D) No entry in the fund;No addition on the schedule of changes in long-term obligations.

Question 10

In which of the following circumstances must an enterprise fund be used to account for the activity?

Accepted Answer

A) A newly created electric utility fund will finance its operations by a charge to users based on kilowatt hours used. 
B) To finance the acquisition of plant facilities,a newly created electric utility issues general obligation debt. 
C) To finance the acquisition of plant facilities,a newly created electric utility issues revenue bonds that will be repaid solely from operations of the electric utility. 
D) To acquire needed plant facilities,a newly created electric utility enters into long-term lease agreements. 
A) A newly created electric utility fund will finance its operations by a charge to users based on kilowatt hours used. 
B) To finance the acquisition of plant facilities,a newly created electric utility issues general obligation debt. 
C) To finance the acquisition of plant facilities,a newly created electric utility issues revenue bonds that will be repaid solely from operations of the electric utility. 
D) To acquire needed plant facilities,a newly created electric utility enters into long-term lease agreements.

Question 11

Fennell County operates a solid waste landfill that is accounted for in a governmental fund.The county calculated this year's portion of the total closure and postclosure costs associated with the landfill to be $600,000.The entry to record this cost should be

Accepted Answer

A) Debit landfill expenditure $600,000;Credit liability for landfill costs $600,000 
B) Debit landfill expenditure $600,000;Credit liability for landfill costs $600,000 AND include $600,000 as an addition on the schedule of changes in long-term obligations. 
C) No entry in the fund;include $600,000 on the schedule of changes in long-term obligations. 
D) No entry in the fund;no addition on the schedule of changes in long-term obligations. 
A) Debit landfill expenditure $600,000;Credit liability for landfill costs $600,000 
B) Debit landfill expenditure $600,000;Credit liability for landfill costs $600,000 AND include $600,000 as an addition on the schedule of changes in long-term obligations. 
C) No entry in the fund;include $600,000 on the schedule of changes in long-term obligations. 
D) No entry in the fund;no addition on the schedule of changes in long-term obligations.

Question 12

A government operates a landfill.In the Landfill Enterprise Fund financial statements,which of the following would be reported as a restricted asset?

Accepted Answer

A) Cash received from the sale of bonds that must,based on the debt covenant,be spent only on building a new landfill runoff treatment plant. 
B) Cash that management has voted to use only for landfill expansion. 
C) Cash received from the general fund that will be used only to expand the landfill. 
D) None of the above. 
A) Cash received from the sale of bonds that must,based on the debt covenant,be spent only on building a new landfill runoff treatment plant. 
B) Cash that management has voted to use only for landfill expansion. 
C) Cash received from the general fund that will be used only to expand the landfill. 
D) None of the above.

Question 13

The FASB mandates that entities report their cash flows from operations using the direct method.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a valid reason for governments to engage in business-type activities?

Accepted Answer

A) The government does not want control over the activity. 
B) The activity competes with general government activities. 
C) The government does not want to subsidize the activity. 
D) The government can provide the services more cheaply or efficiently than can a private firm. 
A) The government does not want control over the activity. 
B) The activity competes with general government activities. 
C) The government does not want to subsidize the activity. 
D) The government can provide the services more cheaply or efficiently than can a private firm.

Question 15

In a statement of net position,the net position of a proprietary fund should be displayed in which of the following categories?

Accepted Answer

A) Unrestricted fund balance;restricted fund balance;invested in capital assets,net of related debt. 
B) Unrestricted net position;restricted net position;invested in capital assets,net of related debt. 
C) Unrestricted net assets;restricted net assetsRestricted net assets;retained earnings;unrestricted net assets. 
A) Unrestricted fund balance;restricted fund balance;invested in capital assets,net of related debt. 
B) Unrestricted net position;restricted net position;invested in capital assets,net of related debt. 
C) Unrestricted net assets;restricted net assetsRestricted net assets;retained earnings;unrestricted net assets.

Question 16

Which of the following is the best rationale/justification for reporting the business-type activities of a government in a separate fund?

Accepted Answer

A) Laws or regulations require that the activity's costs of providing services be recovered by fees and charges rather than by general purpose taxes or similar charges. 
B) Separate funds facilitate budgeting,planning,and control. 
C) Separate funds facilitate an assessment of the activity's performance. 
D) Separate funds facilitate an assessment of the activity's fiscal status. 
A) Laws or regulations require that the activity's costs of providing services be recovered by fees and charges rather than by general purpose taxes or similar charges. 
B) Separate funds facilitate budgeting,planning,and control. 
C) Separate funds facilitate an assessment of the activity's performance. 
D) Separate funds facilitate an assessment of the activity's fiscal status.

Question 17

A statement of revenues,expenses,and changes in net position of a proprietary fund should include which of the following in addition to operating revenues,operating expenses,and ending net position?

Accepted Answer

A) Nonoperating revenues and expenses. 
B) Nonoperating revenues and expenses;other changes in net position. 
C) Nonoperating revenues and expenses;capital contributions and other changes in net position;beginning net assets. 
D) None of the above. 
A) Nonoperating revenues and expenses. 
B) Nonoperating revenues and expenses;other changes in net position. 
C) Nonoperating revenues and expenses;capital contributions and other changes in net position;beginning net assets. 
D) None of the above.

Question 18

Jay County has designated the General Fund as the single fund to account for its self-insurance activities.What is the maximum amount that can be charged to expenditure in the general fund related to the self-insurance activities?

Accepted Answer

A) The amount of "premium" charged to the other funds. 
B) The amount of actual claims expenditures. 
C) The actuarially determined amount necessary to cover claims,expenditures,and catastrophic losses. 
D) The amount transferred from other funds and activities to the general fund for self-insurance purposes. 
A) The amount of "premium" charged to the other funds. 
B) The amount of actual claims expenditures. 
C) The actuarially determined amount necessary to cover claims,expenditures,and catastrophic losses. 
D) The amount transferred from other funds and activities to the general fund for self-insurance purposes.

Question 19

GASB Statement No.34 mandates that governments report their cash flows from operations using the indirect method.

Accepted Answer

A) True 
 B)False

Question 20

Governments must account for an activity in an enterprise fund only if local laws specifically require use of an enterprise fund.

Accepted Answer

A) True 
 B)False

Governments generally do not have to get formal legislative approval for enterprise fund budgets or incorporate them into their accounting systems.

The operating statement required as one of the three basic financial statements for proprietary funds is called the statement of revenues,expenditures,and changes in net position.

Which of the following are required basic statements of a proprietary fund?

The revenues of an internal service fund are the expenditures and expenses of other funds of that government.

Which of the following is not a proprietary fund?

Any internal service fund balances that are not eliminated in the consolidation process should generally be presented on the government-wide financial statements

Linden County operates a solid waste landfill that is accounted for in an enterprise fund.The county calculated this year's portion of the total closure and postclosure costs associated with the landfill to be $300,000.The entryies)to record this cost should be

In which of the following circumstances must an enterprise fund be used to account for the activity?

Fennell County operates a solid waste landfill that is accounted for in a governmental fund.The county calculated this year's portion of the total closure and postclosure costs associated with the landfill to be $600,000.The entry to record this cost should be

A government operates a landfill.In the Landfill Enterprise Fund financial statements,which of the following would be reported as a restricted asset?

The FASB mandates that entities report their cash flows from operations using the direct method.

Which of the following is a valid reason for governments to engage in business-type activities?

In a statement of net position,the net position of a proprietary fund should be displayed in which of the following categories?

Which of the following is the best rationale/justification for reporting the business-type activities of a government in a separate fund?

A statement of revenues,expenses,and changes in net position of a proprietary fund should include which of the following in addition to operating revenues,operating expenses,and ending net position?

Jay County has designated the General Fund as the single fund to account for its self-insurance activities.What is the maximum amount that can be charged to expenditure in the general fund related to the self-insurance activities?

GASB Statement No.34 mandates that governments report their cash flows from operations using the indirect method.

Governments must account for an activity in an enterprise fund only if local laws specifically require use of an enterprise fund.

The Government and Not-For-Profit Environment

Fund Accounting

Issues of Budgeting and Control

Recognizing Revenues in Governmental Funds

Recognizing Expenditures in Governmental Funds

Accounting for Capital Projects and Debt Service

Capital Assets and Investments in Marketable Securities

Long-Term Obligations

Fiduciary Funds and Permanent Funds

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Not-For-Profit Organizations

Federal Government Accounting

Filters

Exam 9: Business-Type Activities

Governments generally do not have to get formal legislative approval for enterprise fund budgets or incorporate them into their accounting systems.

The operating statement required as one of the three basic financial statements for proprietary funds is called the statement of revenues,expenditures,and changes in net position.

Which of the following are required basic statements of a proprietary fund?

The revenues of an internal service fund are the expenditures and expenses of other funds of that government.

Which of the following is not a proprietary fund?

Any internal service fund balances that are not eliminated in the consolidation process should generally be presented on the government-wide financial statements

Linden County operates a solid waste landfill that is accounted for in an enterprise fund.The county calculated this year's portion of the total closure and postclosure costs associated with the landfill to be $300,000.The entryies)to record this cost should be

In which of the following circumstances must an enterprise fund be used to account for the activity?

Fennell County operates a solid waste landfill that is accounted for in a governmental fund.The county calculated this year's portion of the total closure and postclosure costs associated with the landfill to be $600,000.The entry to record this cost should be

A government operates a landfill.In the Landfill Enterprise Fund financial statements,which of the following would be reported as a restricted asset?

The FASB mandates that entities report their cash flows from operations using the direct method.

Which of the following is a valid reason for governments to engage in business-type activities?

In a statement of net position,the net position of a proprietary fund should be displayed in which of the following categories?

Which of the following is the best rationale/justification for reporting the business-type activities of a government in a separate fund?

A statement of revenues,expenses,and changes in net position of a proprietary fund should include which of the following in addition to operating revenues,operating expenses,and ending net position?

Jay County has designated the General Fund as the single fund to account for its self-insurance activities.What is the maximum amount that can be charged to expenditure in the general fund related to the self-insurance activities?

GASB Statement No.34 mandates that governments report their cash flows from operations using the indirect method.

Governments must account for an activity in an enterprise fund only if local laws specifically require use of an enterprise fund.

The Government and Not-For-Profit Environment

Fund Accounting

Issues of Budgeting and Control

Recognizing Revenues in Governmental Funds

Recognizing Expenditures in Governmental Funds

Accounting for Capital Projects and Debt Service

Capital Assets and Investments in Marketable Securities

Long-Term Obligations

Fiduciary Funds and Permanent Funds

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Not-For-Profit Organizations

Federal Government Accounting

Filters