Question 1

The amount the city's general fund can recognize as an expenditure 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 2

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)  Nonreciprocal transfer-in. 
C)  Capital contribution (Revenues). 
D)  Investment provided by the general fund. 
A)  Due to general fund. 
B)  Nonreciprocal transfer-in. 
C)  Capital contribution (Revenues). 
D)  Investment provided by the general fund.

Question 3

Proprietary fund have two financial statements - the statement of net position and the statement of revenues, expenditures, and changes in net position.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is NOT a budget typically prepared for an activity accounted for in a proprietary fund?

Accepted Answer

A)  Appropriation budget. 
B)  Cash budget. 
C)  Capital budget. 
D)  Flexible budget. 
A)  Appropriation budget. 
B)  Cash budget. 
C)  Capital budget. 
D)  Flexible budget.

Question 5

Linden 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 entry(ies) 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 the fund; No addition on the schedule of changes in long-term obligations. 
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 the fund; No addition on the schedule of changes in long-term obligations.

Question 6

What are the differences between a cash flows statement prepared for a governmental electric utility versus one prepared for an investor-owned utility?

Accepted Answer

First, the statement of cash flows for a

Question 7

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 8

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.. 
A)  City Water Enterprise Fund. 
B)  City Motor Pool Internal Service Fund. 
C)  City Hall Capital Projects Fund. 
D)  None of the above..

Question 9

"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.

Question 10

Governments may choose whether to account for internal service fund activities on an accrual basis or a modified accrual basis.

Accepted Answer

A) True 
 B)False

Question 11

A government reports the utility services it provides to citizens in a proprietary fund. Which accounting standards must the proprietary fund apply?

Accepted Answer

A)  All FASB pronouncements, unless a FASB pronouncement conflicts with or contradicts a GASB pronouncement. 
B)  All FASB pronouncements issued prior to November 30, 1989, as well as any post-November 30, 1989 pronouncements specifically adopted by GASB. 
C)  All GASB pronouncements. 
D)  All FASB and AICPA standards incorporated into GASB Statement No. 62, as well as any FASB pronouncements issued after November 30, 1989 that have been specifically adopted by the GASB. 
A)  All FASB pronouncements, unless a FASB pronouncement conflicts with or contradicts a GASB pronouncement. 
B)  All FASB pronouncements issued prior to November 30, 1989, as well as any post-November 30, 1989 pronouncements specifically adopted by GASB. 
C)  All GASB pronouncements. 
D)  All FASB and AICPA standards incorporated into GASB Statement No. 62, as well as any FASB pronouncements issued after November 30, 1989 that have been specifically adopted by the GASB.

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

Flora County issues $6 million of revenue bonds to finance construction of additional physical plant facilities for the county sewer system that is accounted for in an enterprise fund. The bond agreement requires that $0.5 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. When it sells the bonds, the county debits restricted cash and credits revenue bonds payable. What additional entry, if any, is needed?

Accepted Answer

A)  No additional entry is needed at this time. 
B)  Debit restricted net position $0.5 million; Credit unrestricted net position $0.5 million. 
C)  Debit unrestricted net position $0.5 million; Credit restricted net position $0.5 million. 
D)  Debit unrestricted retained earnings $0.5 million; Credit restricted retained earnings $0.5 million. 
A)  No additional entry is needed at this time. 
B)  Debit restricted net position $0.5 million; Credit unrestricted net position $0.5 million. 
C)  Debit unrestricted net position $0.5 million; Credit restricted net position $0.5 million. 
D)  Debit unrestricted retained earnings $0.5 million; Credit restricted retained earnings $0.5 million.

Question 14

The City of Santangelo received a $500,000 federal grant to acquire several buses to be used in its public transit system. The city paid $400,000 to acquire several buses. At year-end, $100,000 of the grant had not yet been used. During the year total depreciation on the buses was $40,000. Revenues for the public system were $600,000; operating expenses (other than depreciation) were $470,000.
REQUIRED:
Assuming the Public Transit Enterprise Fund began the year with unrestricted net assets of $420,000, prepare the following for the Public Transit Enterprise Fund.
a) Statement of revenues, expenses, and changes in net position.
b) Net position section of the statement of net position.

Accepted Answer

Statement of Revenues, Expense

Question 15

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

Government and Not for Profit Accounting

Question 16

Over the long run, internal service funds are intended to generate sufficient revenues to cover the

Accepted Answer

A)  Full costs of providing services. 
B)  Full costs of providing services and earn a profit. 
C)  Current operating costs of providing services. 
D)  Current operating costs of providing services and earn an operating profit. 
A)  Full costs of providing services. 
B)  Full costs of providing services and earn a profit. 
C)  Current operating costs of providing services. 
D)  Current operating costs of providing services and earn an operating profit.

Question 17

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 18

The proprietary fund operating statement includes ALL changes in net position including capital contributions.

Accepted Answer

A) True 
 B)False

Question 19

The following transactions were among those reported by Morris City's water utility enterprise fund for the current year. Proceeds from sales of revenue bonds $3,900,000
Cash received from customer households $1,600,000
Capital contributed by subdivisions $700,000
In the water utility enterprise fund's statement of cash flows for the current year, what amount should be reported as cash flows from capital and related financing activities?

Accepted Answer

A)  $3,900,000 
B)  $6,200,000 
C)  $5,500,000 
D)  $4,600,000 
A)  $3,900,000 
B)  $6,200,000 
C)  $5,500,000 
D)  $4,600,000

Question 20

"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.

The amount the city's general fund can recognize as an expenditure is

The appropriate entry in the internal service fund is a debit to cash for $500,000 and a credit for $500,000 to

Proprietary fund have two financial statements - the statement of net position and the statement of revenues, expenditures, and changes in net position.

Which of the following is NOT a budget typically prepared for an activity accounted for in a proprietary fund?

Linden 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 entry(ies) to record this cost should be

What are the differences between a cash flows statement prepared for a governmental electric utility versus one prepared for an investor-owned utility?

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

Which of the following is not a proprietary fund?

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

Governments may choose whether to account for internal service fund activities on an accrual basis or a modified accrual basis.

A government reports the utility services it provides to citizens in a proprietary fund. Which accounting standards must the proprietary fund apply?

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

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?

Over the long run, internal service funds are intended to generate sufficient revenues to cover the

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

The proprietary fund operating statement includes ALL changes in net position including capital contributions.

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

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

Auditing Governments and Not-For-Profit Organizations

Federal Government Accounting

Filters

Exam 9: Business-Type Activities

The amount the city's general fund can recognize as an expenditure is

The appropriate entry in the internal service fund is a debit to cash for $500,000 and a credit for $500,000 to

Proprietary fund have two financial statements - the statement of net position and the statement of revenues, expenditures, and changes in net position.

Which of the following is NOT a budget typically prepared for an activity accounted for in a proprietary fund?

Linden 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 entry(ies) to record this cost should be

What are the differences between a cash flows statement prepared for a governmental electric utility versus one prepared for an investor-owned utility?

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

Which of the following is not a proprietary fund?

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

Governments may choose whether to account for internal service fund activities on an accrual basis or a modified accrual basis.

A government reports the utility services it provides to citizens in a proprietary fund. Which accounting standards must the proprietary fund apply?

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

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?

Over the long run, internal service funds are intended to generate sufficient revenues to cover the

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

The proprietary fund operating statement includes ALL changes in net position including capital contributions.

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

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

Auditing Governments and Not-For-Profit Organizations

Federal Government Accounting

Filters