Exam 5: Recognizing Expenditures in Governmental Funds

The City of Holbrook transferred $100,000 from the general fund to a debt service fund for payment of interest.The appropriate entry in the debt service fund to record this transfer would be

Shoshone County uses the consumption method to account for supplies.At the beginning of the year the city had no supplies on hand.During the year the city purchased $450,000 of supplies for use by activities accounted for in the general fund.The city used $300,000 of those supplies during the year.At fiscal year-end the appropriate account balances on the government-wide financial statements would be

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 fund 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?

Governmental fund liabilities are considered current only when they must be liquidated with expendable available financial resources-not,as in businesses and in the government-wide statements,when they must be paid within a year.

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 government-wide financial statements,which of the following entries should be made to record the vacation pay earned during the current period?

The City of Hiawatha issued $10 million of term bonds as of April 1,2014.The bonds bear interest at 6 percent,due and payable each October 1 and April 1.Assuming the city maintains its books and records in a manner that facilitates the preparation of its fund financial statements the appropriate entity to record interest on the debt at June 30,2015 the city's fiscal year-end)is

When accounting for inventory items in a governmental fund,a reclassification of the appropriate portion of fund balance is always required when the consumption method is used.

Government-wide statements present revenues and expenses from the perspective of the government,not of individual funds.

Per GASB standards,governments do not report general capital assets or depreciation in governmental funds.

The amount of sick leave liability that should appear on the government-wide financial statements at 6/30/15 is

Compensated absences,such as vacation pay and sick leave,should be accounted for on the accrual basis in governmental funds.

In budgeting for governmental funds,governments appropriate the resources for general capital assets in the periods when they are to be purchased,not in the periods in which the assets will be used.

The amount of sick leave liability that should appear on the general fund balance sheet at 6/30/15 is

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

State University,a very large public university,has a policy of granting faculty members a one-year sabbatical leave after a period of seven years of continuous employment.The leave is to be used for further study,research,or service.During the fiscal year ended 6/30/15,the university paid $3 million to faculty members on sabbatical leave and estimated that faculty members currently not on sabbatical leave earned $3.5 million toward sabbatical leaves they are likely to take in the future.The amount of sabbatical expenditures for the year ended 6/30/15 should be

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 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 government-wide financial statements,the entry in the current year should be

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 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?

The purchases method is consistent with full accrual basis of accounting.

Prepaid expenses such as for insurance are classified as deferred outflows,rather than as assets.

Harris County transferred $300,000 from the general fund to the Motor Pool Internal Service Fund to pay for the use of automobiles during the first six months of FY 2015.The appropriate entry in the general fund to record this transfer of cash would be