Question 1

The risk that changes in interest rates will adversely affect the fair value of an investment is

Accepted Answer

A) Interest rate risk. 
B) Credit risk. 
C) Concentration of credit risk. 
D) Foreign currency risk. 
A) Interest rate risk. 
B) Credit risk. 
C) Concentration of credit risk. 
D) Foreign currency risk.

Question 2

For governments,a capital asset is considered impaired

Accepted Answer

A) When its service capacity has declined significantly and unexpectedly. 
B) When it is reported in a governmental fund. 
C) When it no longer generates any cash flows. 
D) When it no longer generates the cash flows expected of it. 
A) When its service capacity has declined significantly and unexpectedly. 
B) When it is reported in a governmental fund. 
C) When it no longer generates any cash flows. 
D) When it no longer generates the cash flows expected of it.

Question 3

Governments do not have to depreciate infrastructure assets if governments can demonstrate they are preserving these assets at a specified condition level.

Accepted Answer

A) True 
 B)False

Question 4

The government-wide financial statements report capital assets:

Accepted Answer

A) At estimated fair value 
B) At depreciated historical cost,including ancillary charges 
C) Only in the notes,if they are infrastructure assets 
D) Only in the notes,if they are donated capital assets 
A) At estimated fair value 
B) At depreciated historical cost,including ancillary charges 
C) Only in the notes,if they are infrastructure assets 
D) Only in the notes,if they are donated capital assets

Question 5

Which of the following costs will NOT be included in the cost of capital assets on the government-wide financial statements?

Accepted Answer

A) Purchase price invoice amount). 
B) Cost of demolishing existing structures that cannot be used. 
C) Interest on self-constructed items. 
D) Engineering costs. 
A) Purchase price invoice amount). 
B) Cost of demolishing existing structures that cannot be used. 
C) Interest on self-constructed items. 
D) Engineering costs.

Question 6

Which of the following is true with regard to deferred maintenance?

Accepted Answer

A) Deferred maintenance costs are delayed repair,or upkeep,measured by the outlay required to restore a plant or individual asset to full operating characteristics. 
B) Deferred maintenance costs should be measured as the amount necessary to bring the assets up to their expected operating condition. 
C) Deferred maintenance costs may be interpreted as a potential call upon government resources-an obligation that is being passed on to taxpayers of the future. 
D) Deferred maintenance costs are not useful information to readers of financial statements because they are not objective and verifiable and thus violate one of the basic qualitative characteristics of accounting information. 
A) Deferred maintenance costs are delayed repair,or upkeep,measured by the outlay required to restore a plant or individual asset to full operating characteristics. 
B) Deferred maintenance costs should be measured as the amount necessary to bring the assets up to their expected operating condition. 
C) Deferred maintenance costs may be interpreted as a potential call upon government resources-an obligation that is being passed on to taxpayers of the future. 
D) Deferred maintenance costs are not useful information to readers of financial statements because they are not objective and verifiable and thus violate one of the basic qualitative characteristics of accounting information.

Question 7

The risk that changes in currency exchange rates will adversely affect the fair value of an investment is

Accepted Answer

A) Interest rate risk. 
B) Credit risk. 
C) Concentration of credit risk. 
D) Foreign currency risk. 
A) Interest rate risk. 
B) Credit risk. 
C) Concentration of credit risk. 
D) Foreign currency risk.

Question 8

Donated assets are reported in the government-wide financial statements at

Accepted Answer

A) Historical cost to the donor. 
B) Book value in the hands of the donor. 
C) Fair value on date of donation. 
D) Zero value because they were not purchased. 
A) Historical cost to the donor. 
B) Book value in the hands of the donor. 
C) Fair value on date of donation. 
D) Zero value because they were not purchased.

Question 9

Which of the following are NOT infrastructure assets?

Accepted Answer

A) Roads. 
B) Sidewalks. 
C) Buildings. 
D) Bridges. 
A) Roads. 
B) Sidewalks. 
C) Buildings. 
D) Bridges.

Question 10

The "restoration cost" approach to determining the extent of a capital asset impairment

Accepted Answer

A) First calculates the percentage decline in the number of service units caused by the impairment. 
B) First determines the current cost of an asset that would provide the current impaired)level of service. 
C) Estimates the cost to restore the utility of an impaired asset. 
D) Estimates the change in future cash flows generated by an impaired asset. 
A) First calculates the percentage decline in the number of service units caused by the impairment. 
B) First determines the current cost of an asset that would provide the current impaired)level of service. 
C) Estimates the cost to restore the utility of an impaired asset. 
D) Estimates the change in future cash flows generated by an impaired asset.

Question 11

To elect not to capitalize works of art and similar assets,a government must see that the assets meet all of the following criteria EXCEPT

Accepted Answer

A) The assets must be held for public exhibition,education,or research in furtherance of public service,rather than for financial gain. 
B) The assets must be protected,kept unencumbered,cared for,and preserved. 
C) The assets must be subject to an organizational policy that requires the proceeds from sales of the collection items be used to acquire very similar items for the collection. 
D) The assets must be subject to an organizational policy that requires the proceeds from sales of the collection items be used to acquire other items for the collection. 
A) The assets must be held for public exhibition,education,or research in furtherance of public service,rather than for financial gain. 
B) The assets must be protected,kept unencumbered,cared for,and preserved. 
C) The assets must be subject to an organizational policy that requires the proceeds from sales of the collection items be used to acquire very similar items for the collection. 
D) The assets must be subject to an organizational policy that requires the proceeds from sales of the collection items be used to acquire other items for the collection.

Question 12

In governmental funds,the costs of capital assets are reported as expenses when the assets are acquired.

Accepted Answer

A) True 
 B)False

Question 13

If a government elects the modified approach with regard to capitalization of infrastructure

Accepted Answer

A) Costs to preserve infrastructure assets are expensed as incurred with no additional disclosure required. 
B) Costs to preserve infrastructure assets are expensed as incurred and disclosure of assessed condition is required. 
C) Costs to preserve infrastructure assets are capitalized as incurred and depreciated over the estimated useful with no additional disclosure required. 
D) Costs to preserve infrastructure assets are capitalized as incurred and are not depreciated,but disclosure of assessed condition is required. 
A) Costs to preserve infrastructure assets are expensed as incurred with no additional disclosure required. 
B) Costs to preserve infrastructure assets are expensed as incurred and disclosure of assessed condition is required. 
C) Costs to preserve infrastructure assets are capitalized as incurred and depreciated over the estimated useful with no additional disclosure required. 
D) Costs to preserve infrastructure assets are capitalized as incurred and are not depreciated,but disclosure of assessed condition is required.

Question 14

If a government elects to capitalize certain works of art and similar assets,which of the following statements is true relative to depreciation on those assets?

Accepted Answer

A) Donated assets cannot be depreciated. 
B) All of the capitalized assets must be depreciated. 
C) All exhaustible works of art and similar assets must be depreciated. 
D) The government may elect to omit all depreciation. 
A) Donated assets cannot be depreciated. 
B) All of the capitalized assets must be depreciated. 
C) All exhaustible works of art and similar assets must be depreciated. 
D) The government may elect to omit all depreciation.

Question 15

Joshua County bought a new backhoe using general fund cash.When the asset was acquired,what was the appropriate entry in the general fund,assuming that the entity maintains its books and records in a manner to facilitate the preparation of fund financial statements?

Accepted Answer

A) Debit Equipment;Credit Cash. 
B) Debit Equipment;Credit Investment in capital assets. 
C) Debit Expenditures;Credit Cash. 
D) Debit Expenditures;Credit Investment in capital assets. 
A) Debit Equipment;Credit Cash. 
B) Debit Equipment;Credit Investment in capital assets. 
C) Debit Expenditures;Credit Cash. 
D) Debit Expenditures;Credit Investment in capital assets.

Question 16

GASB has no authority to set standards for the investment practices of governments.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following can be referred to as a derivative?

Accepted Answer

A) A reference rate,such as a prevailing interest rate. 
B) A security whose value depends on is derived from)that of some underlying asset,such as a share of stock. 
C) An index,such as the Standard & Poor's index of stock prices. 
D) All of the above. 
A) A reference rate,such as a prevailing interest rate. 
B) A security whose value depends on is derived from)that of some underlying asset,such as a share of stock. 
C) An index,such as the Standard & Poor's index of stock prices. 
D) All of the above.

Question 18

If a government receives donations of works of art,the government must recognize revenue in its government-wide financial statements

Accepted Answer

A) Only if it elects to capitalize its collection. 
B) Only if it elects NOT to capitalize its collection. 
C) On all donations of works of art. 
D) It is not permitted to recognize revenue from donations. 
A) Only if it elects to capitalize its collection. 
B) Only if it elects NOT to capitalize its collection. 
C) On all donations of works of art. 
D) It is not permitted to recognize revenue from donations.

Question 19

The amount of gain or loss that should be recognized on this transaction in the general fund financial statements is:

Accepted Answer

A) $0. 
B) $1,000 loss. 
C) $4,000 gain. 
D) $15,000 loss. 
A) $0. 
B) $1,000 loss. 
C) $4,000 gain. 
D) $15,000 loss.

Question 20

The amount of gain or loss that should be recognized on this transaction in the government-wide financial statements is

Accepted Answer

A) $0. 
B) $1,000 loss. 
C) $3,000 gain. 
D) $12,000 loss. 
A) $0. 
B) $1,000 loss. 
C) $3,000 gain. 
D) $12,000 loss.

The risk that changes in interest rates will adversely affect the fair value of an investment is

For governments,a capital asset is considered impaired

Governments do not have to depreciate infrastructure assets if governments can demonstrate they are preserving these assets at a specified condition level.

The government-wide financial statements report capital assets:

Which of the following costs will NOT be included in the cost of capital assets on the government-wide financial statements?

Which of the following is true with regard to deferred maintenance?

The risk that changes in currency exchange rates will adversely affect the fair value of an investment is

Donated assets are reported in the government-wide financial statements at

Which of the following are NOT infrastructure assets?

The "restoration cost" approach to determining the extent of a capital asset impairment

To elect not to capitalize works of art and similar assets,a government must see that the assets meet all of the following criteria EXCEPT

In governmental funds,the costs of capital assets are reported as expenses when the assets are acquired.

If a government elects the modified approach with regard to capitalization of infrastructure

If a government elects to capitalize certain works of art and similar assets,which of the following statements is true relative to depreciation on those assets?

Joshua County bought a new backhoe using general fund cash.When the asset was acquired,what was the appropriate entry in the general fund,assuming that the entity maintains its books and records in a manner to facilitate the preparation of fund financial statements?

GASB has no authority to set standards for the investment practices of governments.

Which of the following can be referred to as a derivative?

If a government receives donations of works of art,the government must recognize revenue in its government-wide financial statements

The amount of gain or loss that should be recognized on this transaction in the general fund financial statements is:

The amount of gain or loss that should be recognized on this transaction in the government-wide financial statements is

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

Long-Term Obligations

Business-Type Activities

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 7: Capital Assets and Investments in Marketable Securities

The risk that changes in interest rates will adversely affect the fair value of an investment is

For governments,a capital asset is considered impaired

Governments do not have to depreciate infrastructure assets if governments can demonstrate they are preserving these assets at a specified condition level.

The government-wide financial statements report capital assets:

Which of the following costs will NOT be included in the cost of capital assets on the government-wide financial statements?

Which of the following is true with regard to deferred maintenance?

The risk that changes in currency exchange rates will adversely affect the fair value of an investment is

Donated assets are reported in the government-wide financial statements at

Which of the following are NOT infrastructure assets?

The "restoration cost" approach to determining the extent of a capital asset impairment

To elect not to capitalize works of art and similar assets,a government must see that the assets meet all of the following criteria EXCEPT

In governmental funds,the costs of capital assets are reported as expenses when the assets are acquired.

If a government elects the modified approach with regard to capitalization of infrastructure

If a government elects to capitalize certain works of art and similar assets,which of the following statements is true relative to depreciation on those assets?

Joshua County bought a new backhoe using general fund cash.When the asset was acquired,what was the appropriate entry in the general fund,assuming that the entity maintains its books and records in a manner to facilitate the preparation of fund financial statements?

GASB has no authority to set standards for the investment practices of governments.

Which of the following can be referred to as a derivative?

If a government receives donations of works of art,the government must recognize revenue in its government-wide financial statements

The amount of gain or loss that should be recognized on this transaction in the general fund financial statements is:

The amount of gain or loss that should be recognized on this transaction in the government-wide financial statements is

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

Long-Term Obligations

Business-Type Activities

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