Exam 5: Recognizing Expenditures in Governmental Funds

State Community College,a public college,grants faculty members a one-year sabbatical leave after each seven years of service.There are no requirements for research,study,or service during the compensated sabbatical leave.A particular faculty member earns $40,000 per year.Assuming that the college maintains its books and records in a manner that facilitates the preparation of government-wide financial statements and assuming that any appropriate accruals have been made,what is the appropriate entry to record the employee's salary paid while on sabbatical?

The City of Roswell has a 6/30 fiscal year-end.The city uses the consumption method for recognizing inventories and prepayments.On July 1,2014,the city leased computer equipment for use in the city's general activities.The lease is a three-year lease that qualifies as an operating lease.The city prepaid the entire three-year rental fee of $45,000.At June 30,2015,the appropriate account balances in the general fund associated with this transaction would be

Which of the following items is NOT an example of an item that would be reported as Other Financing Sources/Uses in the general fund?

Pocahontas School District,an independent public school district,financed the acquisition of a new school bus by signing a note for $105,000 plus interest on the unpaid balance at 6 percent.Annual principal payments of $35,000,plus interest,are due each July 1.Assuming that the district maintains its books and records in a manner that facilitates the preparation of the government-wide financial statements,the appropriate entry at the date of acquisition is

Other financing sources/uses would appear on which of the following statements?

The City of Upper Falls accounts for its inventory using the purchases method.During the year the city bought $500,000 of supplies,for which it owed $100,000 at year-end.The city will pay for the supplies from available expendable financial resources.The entry that should be recorded in the city's general fund is

In a governmental fund,expenditures for wages and salaries should be recognized in the period in which the employees earn them.

Several years ago,Grant County was sued by a former county employee for wrongful discharge.Although it was to be contested by the county,at the time of the lawsuit the attorneys believed that the county was likely to lose the suit and the estimated amount of the ultimate judgment would be $100,000.This year,the case was finally settled with a judgment against the county of $150,000,which was paid.Assuming that the county maintains its books and records in a manner to facilitate the preparation of its fund financial statements,the entry in the current year should be

Campbell County uses the consumption method to record all inventories and prepayments.The County has a 9/30 fiscal year-end.On April 1,2015,the county purchased a two-year insurance policy at a total cost of $400,000,paying for the policy out of the general fund.In the fund financial statements,the amount of insurance expenditures for the fiscal year ended 9/30/15 would be

Pocahontas School District,an independent public school district,financed the acquisition of a new school bus by signing a note for $105,000 plus interest on the unpaid balance at 6 percent.Annual principal payments of $35,000,plus interest,are due each July 1.Assuming that the district maintains its books and records in a manner that facilitates the preparation of the fund financial statements,the appropriate entry in the general fund at the date of acquisition is

Employees of the general fund of Scott City earn ten days of vacation for each 12 months of employment.The city permits employees to carry the vacation days forward as long as they wish.During the current year employees earned $800,000 of vacation benefits,of which the city estimates $500,000 will be taken in the next year and the balance will be carried forward.Assuming that the city maintains its books and records in a manner that facilitates the preparation of government-wide financial statements,which of the following entries should be made to record the vacation pay earned during the current period?

Employees of the City of Orleans earn ten days paid leave for each 12 months of employment.The city has a policy that employees must take their vacation days during the year following the year in which they are earned.If they do not take vacation in the allotted period,they forfeit the vacation pay benefit.Traditionally,employees have taken 80 percent of the vacation days earned.During the current year,city employees earned $600,000 in vacation pay.Assuming the city maintains its books and records in a manner to facilitate the preparation of fund financial statements,which of the following entries should be made in the general fund to record the vacation pay earned during the current period?

Culver City recognizes as revenues/expenditures those amounts collected/paid during the year or within 60 days of fiscal year-end.The city offers a pension benefit to its employees who meet certain age and years of employment criteria.The city participates in the State Pension Plan.Per its contractual arrangement,the city's required contribution to the State Pension Plan for the fiscal year ended 6/30/15 is $5 million.Due to cash inflow shortages the city,which budgeted $5 million for pension contributions,paid only $4 million in the fiscal year ended 6/30/15.The city paid the remaining amount on September 30,2015.Assuming the city maintains its books and records in a manner that facilitates the preparation of its fund financial statements,how should the city record the pension contribution and any associated liability for the year ended 6/30/15?

Which of the following funds would use the accrual basis of accounting in preparing its fund financial statements?

State University,a public university,has a policy of granting faculty members a one-year paid sabbatical leave after a period of seven years continuous employment.The leave is for further study,research,or public service.A particular faculty member earns $90,000 per year.Assuming that the college maintains its books and records in a manner that facilitates the preparation of government-wide financial statements and assuming that any appropriate accruals have been made,what is the appropriate entry to record the employee's salary paid while on sabbatical leave?

Proceeds of debt intended to finance general capital assets should be reported in the fund financial statements as a fund liability.

Banker County has outstanding $4 million of term bonds that bear interest at 6 percent payable semiannually each January 30 and July 30.The county's fiscal year-end is 12/31.On December 28,2015,the County transferred $240,000 to a debt service fund.At December 31,the maximum amount the debt service fund may recognize as interest expenditure is

Sugar City uses the purchases method to record all prepayments.The city has a 6/30 fiscal year-end.On 12/31/14,the city purchased a three-year insurance policy covering all city owned vehicles acquired by the general fund to be used in general government activities.Cost of the policy was $360,000.After the 6/30/15 closing entries,the appropriate balance sheet accounts and balances in the city's general fund associated with this transaction are

The amount of pension expense that a government should recognize in its government-wide financial statements during the current year is

Bay City uses the purchases method to account for supplies.At the beginning of the year the city had no supplies on hand.During the year the city purchased $600,000 of supplies for use by activities accounted for in the general fund.The city used $400,000 of those supplies during the year.Assuming that the city maintains its books and records in a manner that facilitates the preparation of its fund financial statements,at fiscal year-end the appropriate account balances related to supplies expenditures and supplies inventory would be