Question 1

An enterprise fund should be used when the government has a policy to establish fees to cover the costs of providing services for an activity.

Accepted Answer

A) True 
 B)False

Question 2

The two types of proprietary funds include:

Accepted Answer

A)  Enterprise funds and capital projects funds. 
B)  Enterprise funds and internal service funds. 
C)  Internal service funds and capital project funds. 
D)  Agency funds and enterprise funds. 
A)  Enterprise funds and capital projects funds. 
B)  Enterprise funds and internal service funds. 
C)  Internal service funds and capital project funds. 
D)  Agency funds and enterprise funds.

Question 3

Which of the following is true regarding the recording of long term debt in an enterprise fund?

Accepted Answer

A)  When revenue bonds are sold at par, Cash is debited and Bonds Payable is credited. 
B)  The bonds would be reported in both an enterprise fund and in the government-wide statements. 
C)  Both of the above. 
D)  Neither of the above. 
A)  When revenue bonds are sold at par, Cash is debited and Bonds Payable is credited. 
B)  The bonds would be reported in both an enterprise fund and in the government-wide statements. 
C)  Both of the above. 
D)  Neither of the above.

Question 4

GASB Cash Flow Statements requires the following classification of cash flows:
 Operating,Investing,and Financing.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  Swimming pool. 
B)  Printing Services. 
C)  Airport. 
D)  Lottery. 
A)  Swimming pool. 
B)  Printing Services. 
C)  Airport. 
D)  Lottery.

Question 6

Which of the following is false regarding the cash flow statements of a proprietary fund?

Accepted Answer

A)  A reconciliation is required between the Statement of Revenues, Expenses, and Changes in Fund Net Position and the cash flows from operating activities section of the Cash Flow Statement. 
B)  Interest payments are reported as increases in cash flows from either capital and related financing or noncapital financing activities, whichever is appropriate. 
C)  Purchases of equipment would be reported in the investing section. 
D)  None of the above - these are all true. 
A)  A reconciliation is required between the Statement of Revenues, Expenses, and Changes in Fund Net Position and the cash flows from operating activities section of the Cash Flow Statement. 
B)  Interest payments are reported as increases in cash flows from either capital and related financing or noncapital financing activities, whichever is appropriate. 
C)  Purchases of equipment would be reported in the investing section. 
D)  None of the above - these are all true.

Question 7

Indicate which of the following would not be an example of an internal service fund:

Accepted Answer

A)  City Self-Insurance Fund 
B)  City Print Shop. 
C)  City Airport. 
D)  City Data Processing Service Center. 
A)  City Self-Insurance Fund 
B)  City Print Shop. 
C)  City Airport. 
D)  City Data Processing Service Center.

Question 8

When preparing the Statement of Cash Flows for the Proprietary Funds,cash flows from noncapital financing activities include all of the following EXCEPT:

Accepted Answer

A)  Receipts from customers. 
B)  Proceeds and repayment of debt not clearly related to capital outlay. 
C)  Grants received from and paid to other governments for noncapital purposes. 
D)  Transfers to and from other funds. 
A)  Receipts from customers. 
B)  Proceeds and repayment of debt not clearly related to capital outlay. 
C)  Grants received from and paid to other governments for noncapital purposes. 
D)  Transfers to and from other funds.

Question 9

Which of the following statements is true regarding proprietary funds?

Accepted Answer

A)  Proprietary funds use the modified accrual basis of accounting. 
B)  Accruals and deferrals common to business accounting are recorded in proprietary funds. 
C)  GASB standards require budget-actual reporting for proprietary funds. 
D)  The purchase of a capital asset is recorded as an expenditure in proprietary funds. 
A)  Proprietary funds use the modified accrual basis of accounting. 
B)  Accruals and deferrals common to business accounting are recorded in proprietary funds. 
C)  GASB standards require budget-actual reporting for proprietary funds. 
D)  The purchase of a capital asset is recorded as an expenditure in proprietary funds.

Question 10

An enterprise fund should be used when debt is back solely by fees and charges

Accepted Answer

A) True 
 B)False

An enterprise fund should be used when the government has a policy to establish fees to cover the costs of providing services for an activity.

The two types of proprietary funds include:

Which of the following is true regarding the recording of long term debt in an enterprise fund?

GASB Cash Flow Statements requires the following classification of cash flows: Operating,Investing,and Financing.

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

Which of the following is false regarding the cash flow statements of a proprietary fund?

Indicate which of the following would not be an example of an internal service fund:

When preparing the Statement of Cash Flows for the Proprietary Funds,cash flows from noncapital financing activities include all of the following EXCEPT:

Which of the following statements is true regarding proprietary funds?

An enterprise fund should be used when debt is back solely by fees and charges

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

An enterprise fund should be used when the government has a policy to establish fees to cover the costs of providing services for an activity.

The two types of proprietary funds include:

Which of the following is true regarding the recording of long term debt in an enterprise fund?

GASB Cash Flow Statements requires the following classification of cash flows: Operating,Investing,and Financing.

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

Which of the following is false regarding the cash flow statements of a proprietary fund?

Indicate which of the following would not be an example of an internal service fund:

When preparing the Statement of Cash Flows for the Proprietary Funds,cash flows from noncapital financing activities include all of the following EXCEPT:

Which of the following statements is true regarding proprietary funds?

An enterprise fund should be used when debt is back solely by fees and charges

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