Question 1

Which of the following is true regarding the Statement of Cash Flows required by the GASB for proprietary funds?

Accepted Answer

A)  Either the direct or indirect method may be used. 
B)  Interest payments would be recorded as investing activities. 
C)  Acquisition of capital assets with bond proceeds would be a decrease in cash provided by capital and related financing activities. 
D)  Interest received on investments is reported as cash flows from operating activities. 
A)  Either the direct or indirect method may be used. 
B)  Interest payments would be recorded as investing activities. 
C)  Acquisition of capital assets with bond proceeds would be a decrease in cash provided by capital and related financing activities. 
D)  Interest received on investments is reported as cash flows from operating activities.

Question 2

Internal service funds account for

Accepted Answer

A)  Activities that produce goods or services to be provided to other governmental units on a cost reimbursement basis. 
B)  Activities that produce goods or services to be provided to outside consumers units on a cost reimbursement basis. 
C)  Both A and B. 
D)  None of the above. 
A)  Activities that produce goods or services to be provided to other governmental units on a cost reimbursement basis. 
B)  Activities that produce goods or services to be provided to outside consumers units on a cost reimbursement basis. 
C)  Both A and B. 
D)  None of the above.

Question 3

An enterprise fund is required if there is a legal requirement that the cost of providing services for an activity,including capital costs,be recovered through fees or charges.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not true regarding proprietary funds?

Accepted Answer

A)  Enterprise funds are used by governments to account for services provided to the general public on a user-charge basis. 
B)  General obligation bonds that will be paid from enterprise revenues must be reflected in the accounts of enterprise funds. 
C)  Internal service self-insurance should set fees based on anticipated charges or a long-range plan to break even over time. 
D)  The operation of internal service funds has no impact on other funds because it is run as a business and provides services that would have been purchased elsewhere by the other funds. 
A)  Enterprise funds are used by governments to account for services provided to the general public on a user-charge basis. 
B)  General obligation bonds that will be paid from enterprise revenues must be reflected in the accounts of enterprise funds. 
C)  Internal service self-insurance should set fees based on anticipated charges or a long-range plan to break even over time. 
D)  The operation of internal service funds has no impact on other funds because it is run as a business and provides services that would have been purchased elsewhere by the other funds.

Question 5

Which of the following would not be true regarding internal service funds?

Accepted Answer

A)  Internal service funds use the economic resources measurement focus and accrual basis of accounting. 
B)  Examples of internal service funds would include self-insurance funds, motor pool funds, and print shop funds. 
C)  In the government-wide financial statements, internal service funds are most commonly reported in the business-type activities column. 
D)  None of the above; all are true. 
A)  Internal service funds use the economic resources measurement focus and accrual basis of accounting. 
B)  Examples of internal service funds would include self-insurance funds, motor pool funds, and print shop funds. 
C)  In the government-wide financial statements, internal service funds are most commonly reported in the business-type activities column. 
D)  None of the above; all are true.

Question 6

How should customer deposits held for water meters that cannot be spent for operating purposes be classified?

Accepted Answer

A)  As restricted cash in an Enterprise Fund. 
B)  As both cash and a liability in an Agency fund. 
C)  As Nonspendable fund balance in a Permanent Fund. 
D)  Any of the above are acceptable alternatives. 
A)  As restricted cash in an Enterprise Fund. 
B)  As both cash and a liability in an Agency fund. 
C)  As Nonspendable fund balance in a Permanent Fund. 
D)  Any of the above are acceptable alternatives.

Question 7

Post-closure costs are recorded in a solid waste landfill enterprise fund at the present value of estimated future costs.

Accepted Answer

A) True 
 B)False

Question 8

Municipal solid waste landfills,when accounted for as proprietary funds,record a liability for closure and post-closure care costs; recording expenses on a units of production basis.

Accepted Answer

A) True 
 B)False

Question 9

Which of the funds listed below would include capital assets in its Statement of Net Position?

Accepted Answer

A)  Permanent. 
B)  Special Revenue. 
C)  Internal Service. 
D)  None of the above; no funds in governmental accounting have capital asset accounts. 
A)  Permanent. 
B)  Special Revenue. 
C)  Internal Service. 
D)  None of the above; no funds in governmental accounting have capital asset accounts.

Question 10

Which of the following is not correct regarding the GASB Cash Flow Statement?

Accepted Answer

A)  The reconciliation of income and cash flows from operations starts with operating income. 
B)  Fixed Assets acquisitions are reported in the Capital Related Financing Section. 
C)  Cash received from Interest and Dividend Income is recorded in the Operating Section. 
D)  All of the above are correct. 
A)  The reconciliation of income and cash flows from operations starts with operating income. 
B)  Fixed Assets acquisitions are reported in the Capital Related Financing Section. 
C)  Cash received from Interest and Dividend Income is recorded in the Operating Section. 
D)  All of the above are correct.

Question 11

The term "proprietary funds" includes enterprise and internal service funds.

Accepted Answer

A) True 
 B)False

Question 12

Unlike internal service funds,it is frequently desirable for enterprise funds to operate at a profit.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not true regarding enterprise funds?

Accepted Answer

A)  Similar to commercial businesses, enterprise funds equity accounts include both contributed capital and retained earnings. 
B)  A Statement of Revenues, Expenses, and Changes in Fund Net Position would be the primary operating statement for enterprise funds. 
C)  Enterprise funds' Cash Flow Statements could have up to four categories. 
D)  None of the above; all are true. 
A)  Similar to commercial businesses, enterprise funds equity accounts include both contributed capital and retained earnings. 
B)  A Statement of Revenues, Expenses, and Changes in Fund Net Position would be the primary operating statement for enterprise funds. 
C)  Enterprise funds' Cash Flow Statements could have up to four categories. 
D)  None of the above; all are true.

Question 14

The excess of assets over liabilities of proprietary funds is termed "Net Position."

Accepted Answer

A) True 
 B)False

Question 15

Why might it be desirable for an enterprise fund to operate at a profit?

Accepted Answer

Operating profits are necessary to:
•Est

Question 16

When estimating uncollectible accounts,an enterprise fund will record a debit to Bad Debt Expense and a credit to Accumulated Provision for Uncollectible Accounts.

Accepted Answer

A) True 
 B)False

Question 17

The reconciliation on the statement of cash flows for a proprietary fund under GASB requirements is between operating income and cash flows from operating activities.

Accepted Answer

A) True 
 B)False

Question 18

The categories of Net Position for a proprietary fund are classified within which of the following categories?

Accepted Answer

A)  Net Investment in Capital Assets, Restricted Net Position and Unrestricted Net Position 
B)  Spendable Net Position and Spendable Net Position 
C)  Committed Net Position, Assigned Net Position and Unassigned Net Position 
D)  Restricted Fund balance, Committed Fund balance, Assigned Fund Balance, and Nonspendable Fund Balance 
A)  Net Investment in Capital Assets, Restricted Net Position and Unrestricted Net Position 
B)  Spendable Net Position and Spendable Net Position 
C)  Committed Net Position, Assigned Net Position and Unassigned Net Position 
D)  Restricted Fund balance, Committed Fund balance, Assigned Fund Balance, and Nonspendable Fund Balance

Question 19

The Proprietary Fund Statement of Revenues,Expenses,and Changes in Fund Net Position must include a performance indicator,such as operating income.

Accepted Answer

A) True 
 B)False

Question 20

Revenue bonds

Accepted Answer

A)  Carry less risk than general obligation bonds. 
B)  Are intended to be paid from the revenues of an enterprise. 
C)  Are no longer in existence. 
D)  Are backed by the full faith and credit of the government in addition to enterprise revenues. 
A)  Carry less risk than general obligation bonds. 
B)  Are intended to be paid from the revenues of an enterprise. 
C)  Are no longer in existence. 
D)  Are backed by the full faith and credit of the government in addition to enterprise revenues.

Which of the following is true regarding the Statement of Cash Flows required by the GASB for proprietary funds?

Internal service funds account for

An enterprise fund is required if there is a legal requirement that the cost of providing services for an activity,including capital costs,be recovered through fees or charges.

Which of the following is not true regarding proprietary funds?

Which of the following would not be true regarding internal service funds?

How should customer deposits held for water meters that cannot be spent for operating purposes be classified?

Post-closure costs are recorded in a solid waste landfill enterprise fund at the present value of estimated future costs.

Municipal solid waste landfills,when accounted for as proprietary funds,record a liability for closure and post-closure care costs; recording expenses on a units of production basis.

Which of the funds listed below would include capital assets in its Statement of Net Position?

Which of the following is not correct regarding the GASB Cash Flow Statement?

The term "proprietary funds" includes enterprise and internal service funds.

Unlike internal service funds,it is frequently desirable for enterprise funds to operate at a profit.

Which of the following is not true regarding enterprise funds?

The excess of assets over liabilities of proprietary funds is termed "Net Position."

Why might it be desirable for an enterprise fund to operate at a profit?

When estimating uncollectible accounts,an enterprise fund will record a debit to Bad Debt Expense and a credit to Accumulated Provision for Uncollectible Accounts.

The reconciliation on the statement of cash flows for a proprietary fund under GASB requirements is between operating income and cash flows from operating activities.

The categories of Net Position for a proprietary fund are classified within which of the following categories?

The Proprietary Fund Statement of Revenues,Expenses,and Changes in Fund Net Position must include a performance indicator,such as operating income.

Revenue bonds

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

Which of the following is true regarding the Statement of Cash Flows required by the GASB for proprietary funds?

Internal service funds account for

An enterprise fund is required if there is a legal requirement that the cost of providing services for an activity,including capital costs,be recovered through fees or charges.

Which of the following is not true regarding proprietary funds?

Which of the following would not be true regarding internal service funds?

How should customer deposits held for water meters that cannot be spent for operating purposes be classified?

Post-closure costs are recorded in a solid waste landfill enterprise fund at the present value of estimated future costs.

Municipal solid waste landfills,when accounted for as proprietary funds,record a liability for closure and post-closure care costs; recording expenses on a units of production basis.

Which of the funds listed below would include capital assets in its Statement of Net Position?

Which of the following is not correct regarding the GASB Cash Flow Statement?

The term "proprietary funds" includes enterprise and internal service funds.

Unlike internal service funds,it is frequently desirable for enterprise funds to operate at a profit.

Which of the following is not true regarding enterprise funds?

The excess of assets over liabilities of proprietary funds is termed "Net Position."

Why might it be desirable for an enterprise fund to operate at a profit?

When estimating uncollectible accounts,an enterprise fund will record a debit to Bad Debt Expense and a credit to Accumulated Provision for Uncollectible Accounts.

The reconciliation on the statement of cash flows for a proprietary fund under GASB requirements is between operating income and cash flows from operating activities.

The categories of Net Position for a proprietary fund are classified within which of the following categories?

The Proprietary Fund Statement of Revenues,Expenses,and Changes in Fund Net Position must include a performance indicator,such as operating income.

Revenue bonds

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