Question 1

"Cash flows from capital and related financing activities" include which of the following as inflows

Accepted Answer

A) Repayment of bonds issued to construct a new city hall building. 
B) Interest received on investments. 
C) Grant from the state to subsidize the mass transit system. 
D) Receipts from the sale of an old backhoe that had been used in general government activities. 
A) Repayment of bonds issued to construct a new city hall building. 
B) Interest received on investments. 
C) Grant from the state to subsidize the mass transit system. 
D) Receipts from the sale of an old backhoe that had been used in general government activities. D

Question 2

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. B

Question 3

"Cash flows from investing activities" include which of the following as cash inflows

Accepted Answer

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

Question 4

Because of the rising cost of commercial insurance, many governments have elected to be "self-insured." Explain what being "self-insured" means.Explain the difference in the accounting for self-insurance activities between a governmental fund and a proprietary fund.

Accepted Answer

Being self-insured means being without i

Question 5

"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 6

Which of the following is a valid argument for separate accounting principles for proprietary activities?

Accepted Answer

A) Two separate measurement focuses and bases for accounting within the same set of financial statements are confusing. 
B) There are no clear-cut distinctions between business and non-business activities. 
C) The measurement focus on all economic resources is more consistent with the GASB's objectives that financial reporting should provide information to help determine whether current-year revenues were sufficient to pay for current-year services. 
D) Surveys of statement users indicate that information on depreciation is not of high priority to government decision makers. 
A) Two separate measurement focuses and bases for accounting within the same set of financial statements are confusing. 
B) There are no clear-cut distinctions between business and non-business activities. 
C) The measurement focus on all economic resources is more consistent with the GASB's objectives that financial reporting should provide information to help determine whether current-year revenues were sufficient to pay for current-year services. 
D) Surveys of statement users indicate that information on depreciation is not of high priority to government decision makers.

Question 7

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 8

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 9

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

Accepted Answer

A) True 
 B)False

Question 10

"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.

Question 11

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 government 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 help 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 government 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 help determine whether current-year revenues were sufficient to pay for current-year services. 
D) Business-type accounting facilitates comparisons with governmental activities.

Question 12

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 13

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 14

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 15

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 16

Many governments use internal service funds to account for activities that provide services to the government itself.What are the ramifications of such an accounting arrangement? What are the effects on the government's financial statements?

Accepted Answer

Governments commonly use internal servic

Question 17

When a government enterprise fund has restricted assets on its statement of net position, which of the following is a true statement?

Accepted Answer

A) The total of the restricted assets in the asset section will be equal to the "restricted net position" amount in the equity section. 
B) The total of the restricted assets will be offset by a liability of an equal amount. 
C) The total of the restricted assets less related liabilities will be equal to the "restricted net assets" amount in the equity section. 
D) None of the above statements is true. 
A) The total of the restricted assets in the asset section will be equal to the "restricted net position" amount in the equity section. 
B) The total of the restricted assets will be offset by a liability of an equal amount. 
C) The total of the restricted assets less related liabilities will be equal to the "restricted net assets" amount in the equity section. 
D) None of the above statements is true.

Question 18

Which of the following statements about accounting for pollution remediation costs is NOT true?

Accepted Answer

A) They may be accounted for in either an enterprise fund or a governmental fund. 
B) In the government-wide statements, estimates of costs to be incurred in the future should be reported as expenses and offsetting liabilities. 
C) Because of the potential effects on public health, liabilities for all estimated remediation costs should be considered and reported as current liabilities. 
D) Remediation costs to be accounted for include postremediation monitoring costs as well as actual cleanup costs. 
A) They may be accounted for in either an enterprise fund or a governmental fund. 
B) In the government-wide statements, estimates of costs to be incurred in the future should be reported as expenses and offsetting liabilities. 
C) Because of the potential effects on public health, liabilities for all estimated remediation costs should be considered and reported as current liabilities. 
D) Remediation costs to be accounted for include postremediation monitoring costs as well as actual cleanup costs.

Question 19

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 20

Which of the following is NOT true about internal service funds as reported in the fund financial statements?

Accepted Answer

A) Costs reported by internal service funds are reported twice within the same set of financial statements. 
B) Billing rates must be set to cover the full cost of providing the goods or services. 
C) Depreciation can be charged to governmental funds through the billing rates established by the internal service fund. 
D) Deficits or surpluses in the general fund can be transferred to the internal service fund by adjusting the billing rates. 
A) Costs reported by internal service funds are reported twice within the same set of financial statements. 
B) Billing rates must be set to cover the full cost of providing the goods or services. 
C) Depreciation can be charged to governmental funds through the billing rates established by the internal service fund. 
D) Deficits or surpluses in the general fund can be transferred to the internal service fund by adjusting the billing rates.

"Cash flows from capital and related financing activities" include which of the following as inflows

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

"Cash flows from investing activities" include which of the following as cash inflows

Because of the rising cost of commercial insurance, many governments have elected to be "self-insured." Explain what being "self-insured" means.Explain the difference in the accounting for self-insurance activities between a governmental fund and a proprietary fund.

"Cash flows from operating activities" include which of the following as inflows

Which of the following is a valid argument for separate accounting principles for proprietary activities?

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

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

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

"Cash flows from investing activities" do NOT include which of the following as inflows

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

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

Which of the following is not a proprietary fund?

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

Many governments use internal service funds to account for activities that provide services to the government itself.What are the ramifications of such an accounting arrangement? What are the effects on the government's financial statements?

When a government enterprise fund has restricted assets on its statement of net position, which of the following is a true statement?

Which of the following statements about accounting for pollution remediation costs is NOT true?

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

Which of the following is NOT true about internal service funds as reported in the fund financial statements?

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

Pensions and Other Fiduciary Activities

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Notforprofit Organizations

Federal Government Accounting

Filters

Exam 9: Business-Type Activities

"Cash flows from capital and related financing activities" include which of the following as inflows

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

"Cash flows from investing activities" include which of the following as cash inflows

Because of the rising cost of commercial insurance, many governments have elected to be "self-insured." Explain what being "self-insured" means.Explain the difference in the accounting for self-insurance activities between a governmental fund and a proprietary fund.

"Cash flows from operating activities" include which of the following as inflows

Which of the following is a valid argument for separate accounting principles for proprietary activities?

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

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

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

"Cash flows from investing activities" do NOT include which of the following as inflows

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

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

Which of the following is not a proprietary fund?

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

Many governments use internal service funds to account for activities that provide services to the government itself.What are the ramifications of such an accounting arrangement? What are the effects on the government's financial statements?

When a government enterprise fund has restricted assets on its statement of net position, which of the following is a true statement?

Which of the following statements about accounting for pollution remediation costs is NOT true?

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

Which of the following is NOT true about internal service funds as reported in the fund financial statements?

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

Pensions and Other Fiduciary Activities

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Notforprofit Organizations

Federal Government Accounting

Filters