Question 1

Cash flows from Capital and Related Financing Activities include which of the following as cash outflows

Accepted Answer

A) Grants to other governments for operating activities. 
B) Grants to other governments for capital asset acquisitions. 
C) Payments for services performed by other funds. 
D) Purchases of capital assets. 
A) Grants to other governments for operating activities. 
B) Grants to other governments for capital asset acquisitions. 
C) Payments for services performed by other funds. 
D) Purchases of capital assets. D

Question 2

Franklin 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 any fund; No entry in the Schedule of Changes in Long-term Liabilities. 
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 any fund; No entry in the Schedule of Changes in Long-term Liabilities. A

Question 3

Cash flows from Investing Activities do NOT include which of the following as inflows

Accepted Answer

A) Receipts from the sale of marketable securities. 
B) Interest received on bonds held as short-term investments. 
C) Interest received on bonds held as long-term investments. 
D) Transfers to other funds. 
A) Receipts from the sale of marketable securities. 
B) Interest received on bonds held as short-term investments. 
C) Interest received on bonds held as long-term investments. 
D) Transfers to other funds. D

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

The amounts reported in proprietary fund statements are generally the same as those reported in the government-wide statements because both sets of statements are on a full accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 6

Lehi 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 7

Cash flows from Investing Activities include which of the following as outflows

Accepted Answer

A) Repayments of short-term borrowing to finance operations. 
B) Interest received on investments. 
C) Cash transfers to other funds. 
D) Purchase of short-term investments. 
A) Repayments of short-term borrowing to finance operations. 
B) Interest received on investments. 
C) Cash transfers to other funds. 
D) Purchase of short-term investments.

Question 8

A governmental entity reports its utility services provided to the citizens in a proprietary fund.Which of the following best represents an acceptable election of accounting standards for the proprietary fund? Unless the FASB pronouncement conflicts with or contradicts a GASB pronouncement, a propriety fund must adhere to

Accepted Answer

A) All FASB pronouncements. 
B) All FASB pronouncements issued prior to November 30, 1989, as well as any post-November 30, 1989 pronouncements specifically adopted by GASB. 
C) It must apply only GASB standards. 
D) It may elect either a or b. 
A) All FASB pronouncements. 
B) All FASB pronouncements issued prior to November 30, 1989, as well as any post-November 30, 1989 pronouncements specifically adopted by GASB. 
C) It must apply only GASB standards. 
D) It may elect either a or b.

Question 9

On the fund financial statements, internal service activities should be presented

Accepted Answer

A) In the Propriety Fund statements, net of interfund eliminations. 
B) In the Governmental Fund statements, net of interfund eliminations. 
C) In the Proprietary fund statements, without any interfund eliminations. 
D) In the Governmental Fund statements, without any interfund eliminations. 
A) In the Propriety Fund statements, net of interfund eliminations. 
B) In the Governmental Fund statements, net of interfund eliminations. 
C) In the Proprietary fund statements, without any interfund eliminations. 
D) In the Governmental Fund statements, without any interfund eliminations.

Question 10

Use the following information to answer 
The City of Brockton voted to establish an internal service fund to account for its printing services.The City transferred $500,000 cash from the General Fund to the newly created internal service fund.
-The appropriate entry in the general fund to account for this transfer would be a credit to cash for $500,000 and a debit for $500,000 to

Accepted Answer

A) Due from internal service fund. 
B) Transfer out. 
C) Expenditures. 
D) Investment in internal service fund. 
A) Due from internal service fund. 
B) Transfer out. 
C) Expenditures. 
D) Investment in internal service fund.

Question 11

Cash flows from Investing Activities include which of the following as cash inflows

Accepted Answer

A) Cash collection of receivable for sale of services. 
B) Grants for operating activities. 
C) Interest and dividends received. 
D) Purchases of investments. 
A) Cash collection of receivable for sale of services. 
B) Grants for operating activities. 
C) Interest and dividends received. 
D) Purchases of investments.

Question 12

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

Question 13

Which of the following is a key reason for using business-type accounting to account for proprietary fund activities?

Accepted Answer

A) The modified accrual basis of accounting captures all the resources and obligations associated with an activity. 
B) Depreciation is not recognized in business-type accounting in governments and surveys of statement users indicate that information on depreciation is not of high priority to governmental decision makers. 
C) The measurement focus on all economic resources is more consistent with the GASB's objectives that financial reporting should provide information to determine whether current-year revenues were sufficient to pay for current-year services. 
D) Business-type accounting facilitates comparisons with governmental activities. 
A) The modified accrual basis of accounting captures all the resources and obligations associated with an activity. 
B) Depreciation is not recognized in business-type accounting in governments and surveys of statement users indicate that information on depreciation is not of high priority to governmental decision makers. 
C) The measurement focus on all economic resources is more consistent with the GASB's objectives that financial reporting should provide information to determine whether current-year revenues were sufficient to pay for current-year services. 
D) Business-type accounting facilitates comparisons with governmental activities.

Question 14

Cash flows from Operating Activities include which of the following as inflows

Accepted Answer

A) Proceeds from short-term borrowing to finance operations. 
B) Receipts from property taxes levied to support operations of the activity. 
C) Grants from other governments to finance an operating deficit. 
D) Any cash receipt that does not meet the definition of investing, capital and related financing, or noncapital financing activities. 
A) Proceeds from short-term borrowing to finance operations. 
B) Receipts from property taxes levied to support operations of the activity. 
C) Grants from other governments to finance an operating deficit. 
D) Any cash receipt that does not meet the definition of investing, capital and related financing, or noncapital financing activities.

Question 15

Which of the following factors are considered by rating agencies when considering revenue bond debt?

Accepted Answer

A) Tax base. 
B) Assessed valuation of property in jurisdiction. 
C) History of rates and rate increases. 
D) Demographics. 
A) Tax base. 
B) Assessed valuation of property in jurisdiction. 
C) History of rates and rate increases. 
D) Demographics.

Question 16

Use the following information to answer 
The City of Brockton voted to establish an internal service fund to account for its printing services.The City transferred $500,000 cash from the General Fund to the newly created internal service fund.
-The appropriate entry in the internal service fund is a debit to cash for $500,000 and a credit for $500,000 to

Accepted Answer

A) Due to general fund. 
B) Transfer in. 
C) Capital contribution Revenues. 
D) Investment provided by the general fund. 
A) Due to general fund. 
B) Transfer in. 
C) Capital contribution Revenues. 
D) Investment provided by the general fund.

Question 17

During the current year, the Wilson County Landfill Enterprise Fund installed wells designed to assist in the ground water monitoring process after closure for their solid waste landfill.The landfill has reached 40% of its capacity and is expected to continue to accept waste until 2012.The costs of the wells were $80,000.The appropriate entry to record this event is a credit to Cash for $80,000 and an $80,000 debit to

Accepted Answer

A) Fixed assets. 
B) Landfill expenses. 
C) Liability for landfill costs. 
D) Deferred expenses. 
A) Fixed assets. 
B) Landfill expenses. 
C) Liability for landfill costs. 
D) Deferred expenses.

Question 18

Use the following information to answer questions 
During the year the City's Self-Insurance Internal Service Fund billed the General Fund $600,000 for "premiums," of which $60,000 was for catastrophic losses and the balance was the premium computed on an actuarially determined basis.During the year the City incurred $500,000 in claims losses.The total amount transferred to the Self-Insurance Fund by the General Fund was $620,000.
-The amount the City Self-Insurance Fund can recognize as revenue is

Accepted Answer

A) $620,000 
B) $600,000. 
C) $540,000. 
D) $500,000. 
A) $620,000 
B) $600,000. 
C) $540,000. 
D) $500,000.

Question 19

Burton County issued $6 million of revenue bonds to finance construction of additional physical plant facilities for the City Sewer System that is accounted for in an enterprise fund.The bond agreement requires that $.5 million of the proceeds be invested in U.S.Treasury securities to be used to service the debt if revenues in a particular year are insufficient to do so.At the time of the sale of the bonds, the County debited restricted cash and credited bonds payable.What additional entry, if any, would be needed?

Accepted Answer

A) No additional entry would be needed at this time. 
B) Debit Restricted net assets $.5 million; Unrestricted net assets $.5 million. 
C) Debit Unrestricted net assets $.5 millions; Credit Restricted net assets $.5 million. 
D) Debit Unrestricted retained earnings $.5 million; Credit Restricted retained earnings $.5 million. 
A) No additional entry would be needed at this time. 
B) Debit Restricted net assets $.5 million; Unrestricted net assets $.5 million. 
C) Debit Unrestricted net assets $.5 millions; Credit Restricted net assets $.5 million. 
D) Debit Unrestricted retained earnings $.5 million; Credit Restricted retained earnings $.5 million.

Question 20

The Financial Statements of a Proprietary fund are prepared using the $$\begin{array} { l l l l l } 
& \text { Full Accrual } & \text { Modified } & \text { Economic Resources } & \text { Current Financial } \
& \text { Basis } & \text { Accrual Basis } & \text { Measurement Focus } & \text { Resources Measure- } \
&&&& \text { ment Focus } \
\hline\text { a } & \text { No } & \text { Yes } & \text { Yes } & \text { No } \
\text { b } & \text { Yes } & \text { No } & \text { No } &\text { Yes } \
\text { c } & \text { No } & \text { Yes } & \text { No } & \text { Yes } \
\text { d } & \text { Yes } & \text { No } & \text { Yes } & \text { No } \
\end{array}$$

Accepted Answer

The answer of The Financial Statements of a Proprietary fund...

Cash flows from Capital and Related Financing Activities include which of the following as cash outflows

Franklin 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

Cash flows from Investing Activities do NOT include which of the following as inflows

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

The amounts reported in proprietary fund statements are generally the same as those reported in the government-wide statements because both sets of statements are on a full accrual basis of accounting.

Cash flows from Investing Activities include which of the following as outflows

On the fund financial statements, internal service activities should be presented

Cash flows from Investing Activities include which of the following as cash inflows

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

Which of the following is a key reason for using business-type accounting to account for proprietary fund activities?

Cash flows from Operating Activities include which of the following as inflows

Which of the following factors are considered by rating agencies when considering revenue bond debt?

The Financial Statements of a Proprietary fund are prepared using the Full Accrual Modified Economic Resources Current Financial Basis Accrual Basis Measurement Focus Resources Measure- ment Focus a No Yes Yes No b Yes No No Yes c No Yes No Yes d Yes No Yes No

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

Cash flows from Capital and Related Financing Activities include which of the following as cash outflows

Franklin 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

Cash flows from Investing Activities do NOT include which of the following as inflows

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

The amounts reported in proprietary fund statements are generally the same as those reported in the government-wide statements because both sets of statements are on a full accrual basis of accounting.

Cash flows from Investing Activities include which of the following as outflows

On the fund financial statements, internal service activities should be presented

Cash flows from Investing Activities include which of the following as cash inflows

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

Which of the following is a key reason for using business-type accounting to account for proprietary fund activities?

Cash flows from Operating Activities include which of the following as inflows

Which of the following factors are considered by rating agencies when considering revenue bond debt?

The Financial Statements of a Proprietary fund are prepared using the Full Accrual Modified Economic Resources Current Financial Basis Accrual Basis Measurement Focus Resources Measure- ment Focus a No Yes Yes No b Yes No No Yes c No Yes No Yes d Yes No Yes No

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