Question 1

What amount of gain/loss should be reported in the general fund financial statements?

Accepted Answer

A) $0. 
B) $3,000 gain. 
C) $3,000 loss. 
D) $7,000 gain. 
A) $0. 
B) $3,000 gain. 
C) $3,000 loss. 
D) $7,000 gain.

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

Government investment policies have been sharply criticized because of significant losses incurred by certain governments.What is the nature of the problem that is being criticized? What should be the role of accounting in determining and reporting investment strategies?

Accepted Answer

Most of the major losses (in particular,

Question 4

At what value should the new truck be reported in the government-wide financial statements?

Accepted Answer

A) $44,000. 
B) $43,000. 
C) $40,000. 
D) $37,000. 
A) $44,000. 
B) $43,000. 
C) $40,000. 
D) $37,000.

Question 5

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.
Use the following information to answer questions #12 - #14
Rory City traded in a used pickup for a new pickup with a sticker price of $44,000.The old truck had a historical cost of $40,000, accumulated depreciation of $16,000, and a fair value of $27,000.The dealer took the old truck and $10,000 cash for the new truck. 
A) $0. 
B) $1,000 loss. 
C) $3,000 gain. 
D) $12,000 loss.
Use the following information to answer questions #12 - #14
Rory City traded in a used pickup for a new pickup with a sticker price of $44,000.The old truck had a historical cost of $40,000, accumulated depreciation of $16,000, and a fair value of $27,000.The dealer took the old truck and $10,000 cash for the new truck.

Question 6

What is "deferred maintenance?" What is its possible role in government financial reporting?

Accepted Answer

Deferred maintenance costs are defined a

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

Government accounting does not permit depreciation to be charged on the operating statements of governmental funds.Present arguments FOR reporting depreciation and arguments AGAINST reporting depreciation.

Accepted Answer

Arguments against reporting depreciation

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Concentration of credit risk is

Accepted Answer

A) The risk that an issuer or other counterparty to an investment will not fulfill its obligations. 
B) The risk of loss attributed to participating in a state investment pool. 
C) The risk of loss attributed to the magnitude of a government's investment in a single issuer. 
D) The risk that changes in exchange rates with blocs of countries that have pooled their currencies will adversely affect the fair value of an investment. 
A) The risk that an issuer or other counterparty to an investment will not fulfill its obligations. 
B) The risk of loss attributed to participating in a state investment pool. 
C) The risk of loss attributed to the magnitude of a government's investment in a single issuer. 
D) The risk that changes in exchange rates with blocs of countries that have pooled their currencies will adversely affect the fair value of an investment.

Question 11

The city of Maine Creek acquired a used front-end loader from a road contractor for use at the city landfill (which is accounted for in an enterprise fund).The loader had a fair value of $54,000 and a historical cost of $90,000.The city paid the contractor $50,000 for the loader.At what amount should be front-end loader be reported in the government-wide financial statements?

Accepted Answer

A) $50,000. 
B) $54,000. 
C) $90,000. 
D) It should not be reported in the government-wide financial statements. 
A) $50,000. 
B) $54,000. 
C) $90,000. 
D) It should not be reported in the government-wide financial statements.

Question 12

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 13

Fair value accounting is required for investments in:

Accepted Answer

A) External investment pools 
B) Open-end mutual funds 
C) Bonds and other debt securities 
D) All of the above 
A) External investment pools 
B) Open-end mutual funds 
C) Bonds and other debt securities 
D) All of the above

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Which of the following are NOT examples of derivatives?

Accepted Answer

A) Stock options. 
B) Interest-only strips. 
C) Debt instruments backed by pools of mortgages. 
D) Repurchase agreements. 
A) Stock options. 
B) Interest-only strips. 
C) Debt instruments backed by pools of mortgages. 
D) Repurchase agreements.

Question 16

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 17

What are the differences among the various elements of risk: market risk, credit risk, concentrations of credit risk, and interest rate risk? Describe how each of these risks could affect a government's investment in a 20-year Treasury note.

Accepted Answer

Market risk is the risk of changing pric

Question 18

A government may record long-term assets in which of the following funds?

Accepted Answer

A) General fund 
B) Internal service funds. 
C) Capital projects funds 
D) Debt service funds. 
A) General fund 
B) Internal service funds. 
C) Capital projects funds 
D) Debt service funds.

What amount of gain/loss should be reported in the general fund financial statements?

For governments, a capital asset is considered impaired

Government investment policies have been sharply criticized because of significant losses incurred by certain governments.What is the nature of the problem that is being criticized? What should be the role of accounting in determining and reporting investment strategies?

At what value should the new truck be reported in the government-wide financial statements?

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

What is "deferred maintenance?" What is its possible role in government financial reporting?

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

Government accounting does not permit depreciation to be charged on the operating statements of governmental funds.Present arguments FOR reporting depreciation and arguments AGAINST reporting depreciation.

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

Concentration of credit risk is

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?

Fair value accounting is required for investments in:

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

Which of the following are NOT examples of derivatives?

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?

What are the differences among the various elements of risk: market risk, credit risk, concentrations of credit risk, and interest rate risk? Describe how each of these risks could affect a government's investment in a 20-year Treasury note.

A government may record long-term assets in which of the following funds?

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

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 7: Capital Assets and Investments in Marketable Securities

What amount of gain/loss should be reported in the general fund financial statements?

For governments, a capital asset is considered impaired

Government investment policies have been sharply criticized because of significant losses incurred by certain governments.What is the nature of the problem that is being criticized? What should be the role of accounting in determining and reporting investment strategies?

At what value should the new truck be reported in the government-wide financial statements?

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

What is "deferred maintenance?" What is its possible role in government financial reporting?

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

Government accounting does not permit depreciation to be charged on the operating statements of governmental funds.Present arguments FOR reporting depreciation and arguments AGAINST reporting depreciation.

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

Concentration of credit risk is

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?

Fair value accounting is required for investments in:

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

Which of the following are NOT examples of derivatives?

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?

What are the differences among the various elements of risk: market risk, credit risk, concentrations of credit risk, and interest rate risk? Describe how each of these risks could affect a government's investment in a 20-year Treasury note.

A government may record long-term assets in which of the following funds?

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

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