Exam 4: Accounting for the General and Special Revenue Funds

What is the different accounting treatment with respect to supplies inventory using the Consumption versus the Purchases method

Receivables from sales taxes are recorded when the taxpayer's underlying transaction takes place.

What is a Special Revenue Fund?

Under modified accrual accounting, property tax revenue should be recognized when measurable and available; available means collected no more than 90 days after year-end.

In the General Fund, revenues are recognized when earned and available

Fines and Forfeits are typically recognized when?

The initial transfer of cash from the General Fund to establish a motor pool internal service fund would require the General Fund to credit Cash and debit:

Government fund statements use the modified accrual basis, while government-wide, proprietary fund and fiduciary funds use accrual basis.

The Town of Little River expects to collect $50,000 in sales tax from the state government within 30 days of the end of fiscal year 2009. What entry, if any, would Little River make at the end of 2009? A) Taxes receivable - current 50,000 Revenues control 50,000 B) Taxes receivable - deferred 50,000 Revenues control 50,000 C) Taxes receivable - current 50,000 Due from state government 50,000 D) Due from state government 50,000 Revenues control 50,000

The City of Stromfield had the following partial list of preclosing account balances in its General Fund as of June 30, 2009. Appropriations Control \ 3,000,000 Budgetary Fund Balance 500,000 Reserve for Encumbrances 102,000 Due to Other Funds 35,000 Encumbrances Control 102,000 Estimated Other Financing Uses Control 300,000 Estimated Revenues Control 3,550,000 Expenditures Control 2,798,000 Fund Balance-Unreserved 297,000 Other Financing Uses Control-Transfers Out 309,000 Revenues Control 3,750,000 Taxes Receivable-Delinquent 75,000 Vouchers Payable 275,000 Required: Prepare, in good form, a Statement of Revenues, Expenditures and Changes in Fund Balances for the General Fund for the year ended June 30, 2009.

A local government was awarded a federal grant in the amount of $800,000 to provide for a summer youth employment program for young people. The grant was a reimbursement grant and a notification of the grant award was received on Apri1 30, 2009. The local government expended the resources as follows: • June, 2009, $300,000; • July, 2009, $250,000; • August, 2009, $250,000 The federal government sent the funds in the month following the expenditure. The local government would recognize revenues for the fiscal year ended June 30, 2009 in which amount?

Under GASB Statement 33 requirements for accrual accounting, property tax revenue should be recognized in the period that the tax is collected.

What is the difference between an extraordinary and special item?

GASB requires both extraordinary and special items to be reported separately after other financing sources and uses in the general and special revenue fund financial statements

Prepare entries in general journal form to record the following transactions in General Fund general ledger accounts for fiscal year 2009. Use modified accrual accounting. (a). he legal budget for the year provided for $5,040,000 of estimated revenues and $4,960,000 appropriations. (b). Assume there are $ 150,000 of purchase orders outstanding at the end of last year and that these will be honored in the current year. Prepare the entries to re-establish the encumbrance. (c). Property taxes were levied in the amount of $3,200,000. It is estimated that 2.5 percent of the taxes will never be collected. (d). Purchase orders were issued for equipment and supplies in the amount of $3,040,000. (e). Supplies, relating to all of the prior year purchase orders ($150,000), were received along with invoices amounting to $144,000. (f). Collections of current property taxes amounted to $2,750,000. The uncollected taxes recorded as delinquent. (g). It was estimated that $190,000 in property taxes would be collected in the first 60 days of 2010 and that $180,000 would be collected in later periods.

A donor pledged $100,000 to the fund raising drive of a local government to assist its police officers in obtaining the latest technology. The pledge was made on July 16, 2008 but was conditioned on the government raising an additional $100,000 from other donors. By the fiscal year-end of June 30, 2009, the local government had raised only $5,000 from other donors. What entry would be made for the initial pledge by the local government during the year ended June 30, 2009?

Which account would be debited when the City of Corfu issued purchase orders for materials and supplies?

The following information was available for the General Fund of the City of Clinton for the Year Ended December 31, 2009: (a). Revenues for the year included property taxes in the amount of $6,700,000, fines and forfeits in the amount of $1,200,000 and miscellaneous in the amount of $400,000. (b). Expenditures from current appropriations included: general government, $4,500,000; public safety, $1,924,000; culture and recreation, $512,000. (c). In addition to (b) above, expenditures related to prior year appropriations (encumbered last year) amounted to $40,000 (public safety). Encumbrances issued this year but not filled amounted to $60,000 (general government). (d). A transfer was made from the General Fund to a debt service fund in the amount of $800,000. A transfer was made from an enterprise fund to the General Fund in the amount of $300,000. (e). A sale of park land was made during the year, which was considered infrequent but not unusual and under the control of management. The proceeds amounted to $400,000 and the land had a basis of $250,000 reported in the government-wide Statement of Net Assets the year before. (f). Beginning balances included Fund Balance-Unreserved in the amount of $260,000 and Reserve for Encumbrances in the amount of $40,000. Required: Prepare a Statement of Revenues, Expenditures and Changes in Fund Balances for the General Fund for the City of Clinton for the Year Ended December 31, 2009.

After closing entries, the Unreserved Fund Balance account represents the net amount of resources available for appropriation

A Non-exchange transaction is one in which a government gives or receives value without directly receiving or giving equal value in exchange.