Question 1

According to GASB 34,Enterprise funds must be used when:

Accepted Answer

A)  Debt is backed solely by fees and charges. 
B)  A legal requirement exists that the cost of providing services for an activity, including capital costs, be recovered through fees or charges. 
C)  A government has a policy to establish fees and charges to cover the cost of providing services for an activity. 
D)  Any of the above apply. 
A)  Debt is backed solely by fees and charges. 
B)  A legal requirement exists that the cost of providing services for an activity, including capital costs, be recovered through fees or charges. 
C)  A government has a policy to establish fees and charges to cover the cost of providing services for an activity. 
D)  Any of the above apply. D

Question 2

Describe the requirements for disclosure of segment information for enterprise funds.

Accepted Answer

Since the basic financial statements include the detail of only major enterprise funds,the GASB decided to require segment information for major nonhomogeneous enterprise funds,especially when debt is issued separately. Disclosures are similar to those of the FASB and include net income or loss,operating income or loss,depreciation expense,total assets,and net working capital. Segment information is required when (a)material long-term liabilities are outstanding,(b)the disclosures are essential to assure the GPFS are not misleading,or (c)they are necessary to assure interperiod comparability.

Question 3

A city government has decided to build and operate a convention center. Identify what factors should be considered in deciding whether to account for the convention center as an Enterprise Fund or as part of general governmental activities?

Accepted Answer

In determining whether to account for an activity as an enterprise fund,the government should consider whether the activity has the basic characteristics of an enterprise activity. Among these are: (1)The existence of fee-based services and (2)the principal customers are external to the government. It is also important to consider the terms of any financing. If the activity issues revenue bonds or other debt backed by the income earned by the activity,it should be accounted for in an enterprise fund. Finally,the government should consider the whether it is the intent of the government (either by law or policy)that the activity be self-sustaining. If so,it should most appropriately be accounted for in an enterprise fund.

Question 4

When governments operate landfills as enterprise funds,which of the following is correct?

Accepted Answer

A)  GASB requires that certain post-closure costs be estimated and accrued during the period the landfills receive solid waste. 
B)  GASB requires that a portion of future estimated costs be charged as an expense and liability of the landfill using units-of-production method as waste is accepted. 
C)  The purpose of recording post-closure expenses and liabilities is to match the estimated costs with the revenues during the period of time the waste is accepted. 
D)  All of the above are correct 
A)  GASB requires that certain post-closure costs be estimated and accrued during the period the landfills receive solid waste. 
B)  GASB requires that a portion of future estimated costs be charged as an expense and liability of the landfill using units-of-production method as waste is accepted. 
C)  The purpose of recording post-closure expenses and liabilities is to match the estimated costs with the revenues during the period of time the waste is accepted. 
D)  All of the above are correct

Question 5

GASB requires the ____________ method to report cash flows from operating activities in the Statement of Cash Flows.

Accepted Answer

A)  Indirect. 
B)  Direct. 
C)  Modified accrual 
D)  Full accrual 
A)  Indirect. 
B)  Direct. 
C)  Modified accrual 
D)  Full accrual

Question 6

Internal Service funds are reported in the fund-basis statements only.

Accepted Answer

A) True 
 B)False

Question 7

Proprietary funds:

Accepted Answer

A)  Are required to present budget-actual statements in the fund statements. 
B)  Are required to present a reconciliation between the Statement of Revenues, Expenses, and Changes in Fund Net Position and the Cash Flow Statement. 
C)  Are not required to accrue interest due more than 30 days after the end of the fiscal year. 
D)  Are required to present a Statement of Revenues and Expenses and Balance sheet. 
A)  Are required to present budget-actual statements in the fund statements. 
B)  Are required to present a reconciliation between the Statement of Revenues, Expenses, and Changes in Fund Net Position and the Cash Flow Statement. 
C)  Are not required to accrue interest due more than 30 days after the end of the fiscal year. 
D)  Are required to present a Statement of Revenues and Expenses and Balance sheet.

Question 8

Fund-basis financial statements prepared for proprietary funds include the Statement of Net Position,Statement of Revenues,Expenses,and Changes in Fund Net Position,and the Statement of Cash Flows.

Accepted Answer

A) True 
 B)False

Question 9

An internal service fund is required whenever an activity is funded by fees or charges from other government departments.

Accepted Answer

A) True 
 B)False

Question 10

Capital assets of an enterprise fund should be reported in the:

Accepted Answer

A)  Government-Wide Statement of Net Position only. 
B)  Proprietary Fund Statement of Net Position only. 
C)  General Fixed Asset Account Group only. 
D)  Government-Wide Statement of Net Position and Proprietary Funds Statement of Net Position. 
A)  Government-Wide Statement of Net Position only. 
B)  Proprietary Fund Statement of Net Position only. 
C)  General Fixed Asset Account Group only. 
D)  Government-Wide Statement of Net Position and Proprietary Funds Statement of Net Position.

Question 11

The most numerous and important enterprise services rendered by local governments are public utilities.

Accepted Answer

A) True 
 B)False

Question 12

The Balance Sheet and the Statement of Revenues,Expenditures,and Changes in Fund Balances are required for Proprietary funds.

Accepted Answer

A) True 
 B)False

Question 13

Governmental units use which fund type to account for services provided to the general public on a user-charge basis?

Accepted Answer

A)  General Fund. 
B)  Internal service fund. 
C)  Permanent fund. 
D)  Enterprise fund. 
A)  General Fund. 
B)  Internal service fund. 
C)  Permanent fund. 
D)  Enterprise fund.

Question 14

The City of Thomasville had the following debt outstanding:
General obligation bonds to be paid from a debt service fund $2,900,000
General obligation bonds to be paid from utility revenues $3,100,000
Revenue bonds to be paid from utility revenues $3,400,000
The amount that should be shown as debt in the utility (enterprise)fund would be:

Accepted Answer

A)  $9,400,000. 
B)  $6,500,000. 
C)  $3,400,000. 
D)  $3,100,000. 
A)  $9,400,000. 
B)  $6,500,000. 
C)  $3,400,000. 
D)  $3,100,000.

Question 15

Enterprise funds use the economic resources measurement focus and accrual basis of accounting

Accepted Answer

A) True 
 B)False

Question 16

Proprietary funds use the current financial resources measurement focus and modified accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 17

An example of an activity that would not normally be accounted for in an internal service fund would be:

Accepted Answer

A)  Motor pool. 
B)  Print shop. 
C)  Garbage collection. 
D)  Central storeroom. 
A)  Motor pool. 
B)  Print shop. 
C)  Garbage collection. 
D)  Central storeroom.

Question 18

All of the following are true about proprietary funds EXCEPT:

Accepted Answer

A)  They include Internal Service Funds and Enterprise Funds. 
B)  A Statement of Cash Flows is required in accordance with FASB standards. 
C)  The economic resources measurement focus is used. 
D)  Accrual accounting is used as the basis of accounting. 
A)  They include Internal Service Funds and Enterprise Funds. 
B)  A Statement of Cash Flows is required in accordance with FASB standards. 
C)  The economic resources measurement focus is used. 
D)  Accrual accounting is used as the basis of accounting.

Question 19

Centralized purchasing,computer services,and janitorial services are examples of activities that are commonly reported in:

Accepted Answer

A)  Enterprise funds. 
B)  Capital project funds. 
C)  Debt service funds. 
D)  Internal service funds. 
A)  Enterprise funds. 
B)  Capital project funds. 
C)  Debt service funds. 
D)  Internal service funds.

Question 20

Which of the following is not true regarding proprietary funds?

Accepted Answer

A)  Accrual accounting and the economic resource measurement focus are used. 
B)  Statements required are the Balance Sheet, the Statement of Revenues, Expenditures, and Changes in Fund Balances, and the Statement of Cash Flows. 
C)  Long Term debt is recorded directly in the accounts. 
D)  Proprietary funds financial reports include the Statement of Net Position, Statement of Revenues, Expenses, and Changes in Fund Net Position, and Statement of Cash Flows. 
A)  Accrual accounting and the economic resource measurement focus are used. 
B)  Statements required are the Balance Sheet, the Statement of Revenues, Expenditures, and Changes in Fund Balances, and the Statement of Cash Flows. 
C)  Long Term debt is recorded directly in the accounts. 
D)  Proprietary funds financial reports include the Statement of Net Position, Statement of Revenues, Expenses, and Changes in Fund Net Position, and Statement of Cash Flows.

According to GASB 34,Enterprise funds must be used when:

Describe the requirements for disclosure of segment information for enterprise funds.

A city government has decided to build and operate a convention center. Identify what factors should be considered in deciding whether to account for the convention center as an Enterprise Fund or as part of general governmental activities?

When governments operate landfills as enterprise funds,which of the following is correct?

GASB requires the ____________ method to report cash flows from operating activities in the Statement of Cash Flows.

Internal Service funds are reported in the fund-basis statements only.

Proprietary funds:

Fund-basis financial statements prepared for proprietary funds include the Statement of Net Position,Statement of Revenues,Expenses,and Changes in Fund Net Position,and the Statement of Cash Flows.

An internal service fund is required whenever an activity is funded by fees or charges from other government departments.

Capital assets of an enterprise fund should be reported in the:

The most numerous and important enterprise services rendered by local governments are public utilities.

The Balance Sheet and the Statement of Revenues,Expenditures,and Changes in Fund Balances are required for Proprietary funds.

Governmental units use which fund type to account for services provided to the general public on a user-charge basis?

Enterprise funds use the economic resources measurement focus and accrual basis of accounting

Proprietary funds use the current financial resources measurement focus and modified accrual basis of accounting.

An example of an activity that would not normally be accounted for in an internal service fund would be:

All of the following are true about proprietary funds EXCEPT:

Centralized purchasing,computer services,and janitorial services are examples of activities that are commonly reported in:

Which of the following is not true regarding proprietary funds?

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Fiduciary Funds, Inter-fund Transactions

Government-Wide Statements: Capital Assets; Long-Term Debt

Accounting for Special-Purpose Entities Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Auditing, Tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

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Exam 6: Proprietary Funds

According to GASB 34,Enterprise funds must be used when:

Describe the requirements for disclosure of segment information for enterprise funds.

A city government has decided to build and operate a convention center. Identify what factors should be considered in deciding whether to account for the convention center as an Enterprise Fund or as part of general governmental activities?

When governments operate landfills as enterprise funds,which of the following is correct?

GASB requires the ____________ method to report cash flows from operating activities in the Statement of Cash Flows.

Internal Service funds are reported in the fund-basis statements only.

Proprietary funds:

Fund-basis financial statements prepared for proprietary funds include the Statement of Net Position,Statement of Revenues,Expenses,and Changes in Fund Net Position,and the Statement of Cash Flows.

An internal service fund is required whenever an activity is funded by fees or charges from other government departments.

Capital assets of an enterprise fund should be reported in the:

The most numerous and important enterprise services rendered by local governments are public utilities.

The Balance Sheet and the Statement of Revenues,Expenditures,and Changes in Fund Balances are required for Proprietary funds.

Governmental units use which fund type to account for services provided to the general public on a user-charge basis?

Enterprise funds use the economic resources measurement focus and accrual basis of accounting

Proprietary funds use the current financial resources measurement focus and modified accrual basis of accounting.

An example of an activity that would not normally be accounted for in an internal service fund would be:

All of the following are true about proprietary funds EXCEPT:

Centralized purchasing,computer services,and janitorial services are examples of activities that are commonly reported in:

Which of the following is not true regarding proprietary funds?

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Fiduciary Funds, Inter-fund Transactions

Government-Wide Statements: Capital Assets; Long-Term Debt

Accounting for Special-Purpose Entities Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Auditing, Tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters