Question 1

The expenditures account is debited when supplies are received under which one of the following inventory methods?

Accepted Answer

A)  Perpetual 
B)  Consumption 
C)  Periodic 
D)  Purchases 
A)  Perpetual 
B)  Consumption 
C)  Periodic 
D)  Purchases

Question 2

The City of Greenville had a balance in the Reserve for Encumbrances account at the end of 2008 in the amount of $30,000. During 2009, all purchase orders related to the $30,000 were filled and the invoice amount was $30,500. Which of the following would be true regarding the Statement of Revenues, Expenditures and Changes in Fund Balances for 2009? (assume encumbrances do not lapse)

Accepted Answer

A)  The amount shown for Expenditures would include only the $500 
B)  The amount shown for Expenditures would include only the $30,000 
C)  The amount shown for Expenditures would include the $30,500 
D)  The amount shown for Expenditures would not include items related to orders placed in 2008 
A)  The amount shown for Expenditures would include only the $500 
B)  The amount shown for Expenditures would include only the $30,000 
C)  The amount shown for Expenditures would include the $30,500 
D)  The amount shown for Expenditures would not include items related to orders placed in 2008

Question 3

Proceeds from the Sale of Land in the General Fund is a source of funds and would be closed at year end.

Accepted Answer

A) True 
 B)False

Question 4

Governmental fund financial statements are to be prepared on the

Accepted Answer

A)  Accrual basis of accounting 
B)  Cash basis of accounting 
C)  Modified accrual basis of accounting 
D)  Tax basis of accounting 
A)  Accrual basis of accounting 
B)  Cash basis of accounting 
C)  Modified accrual basis of accounting 
D)  Tax basis of accounting

Question 5

The Village of Naples has $15,000 of purchase orders outstanding at the end of 2008 which will be honored. The goods and supplies were received during the second week of January, 2009. The invoice amounted to $15,300
What are the journal entries necessary to re-establish the encumbrance and record receipt of the supplies?

Accepted Answer

\[\begin{array} { l c } 
\text { Encumbr

Question 6

$60,000 of property tax owed to the city of Akron will not be collected within 60 days after year end. The year end journal entry to record this information would include a:

Accepted Answer

A)  A credit to Revenues Control 
B)  A debit to Deferred Revenue - Property Taxes 
C)  A credit to Income Taxes Receivable 
D)  A debit to Revenues Control 
A)  A credit to Revenues Control 
B)  A debit to Deferred Revenue - Property Taxes 
C)  A credit to Income Taxes Receivable 
D)  A debit to Revenues Control

Question 7

Which of the following is not one of the four classes into which nonexchange transactions apply in accordance with GASB Statement No. 33?

Accepted Answer

A)  Voluntary nonexchange transactions 
B)  Imposed nonexchange revenues 
C)  Derived Tax Revenues 
D)  Mandatory exchange transactions 
A)  Voluntary nonexchange transactions 
B)  Imposed nonexchange revenues 
C)  Derived Tax Revenues 
D)  Mandatory exchange transactions

Question 8

Under which method of accounting for inventories do you debit the Expenditure account and credit the Asset account when inventories are consumed?

Accepted Answer

A)  Consumption method 
B)  Purchases method 
C)  Both of the above 
D)  None of the above 
A)  Consumption method 
B)  Purchases method 
C)  Both of the above 
D)  None of the above

Question 9

A local government was awarded a federal grant in the amount of $600,000 to provide for a summer employment program for young people. The grant was a reimbursement grant and was awarded on April 30, 2009. The local government expended the resources as follows: June, 2009, $220,000; July 2009, $200,000; August, 2009, $180,000. The federal government provided the funds the following months. The local government would recognize revenues for the fiscal year ended June 30, 2009 in which amount?

Accepted Answer

A)  $ - 0 - 
B)  $220,000 
C)  $420,000 
D)  $600,000 
A)  $ - 0 - 
B)  $220,000 
C)  $420,000 
D)  $600,000

Question 10

The Town of Hampton's accounting system stipulates that all revenue and operating transfers shall be accounted for on the modified accrual basis. Use the following classification to classify each General Fund transaction that follows by placing the appropriate letter in the space next to each item:
a. Revenue
b. Other Financing Source or Use-Transfers In or Out
c. Neither a revenue nor an operating transfer
Transactions:
 \[\begin{array} { c | l } 
\text { 1. } & \text { Collection of current-year property taxes, previously levied } \
\hline 2 . & \text { Collection of prior years' taxes } \
3 . & \text { Collection of traffic fines } \
4 . & \text { Collection of taxes applicable to prior year which, due to an } \
& \begin{array} { l } 
\text { assessor's error, had not been recorded as receivable in that } \
\text { year }
\end{array} \
5 . & \text { Levy of current year property taxes, collected either this year } \
& \text { or within } 60 \text { days thereafter } \
\hline 6 . & \text { Collection of charges for services } \
\hline \text { 7. } & \begin{array} { l } 
\text { Levy of current year property taxes, collected more than } 60 \
\text { days after year-end }
\end{array} \
\hline 8 . & \begin{array} { l } 
\text { Remittance to debt service fund of collections of taxes for debt } \
\text { service }\
\end{array} \

\hline 9 . & \begin{array} { l } 
\text { Charge to a special revenue fund for supplies transferred to it at cost} \
\end{array} \
\hline
\end{array}\]

Accepted Answer

1. c, 2. c, 3. a, 4.

Question 11

The City of Morganville had the following preclosing account balances in its General Fund as of April 30, 2009. Debits and credits are not separated; each account had its "normal" balance. Among the expenditures recorded this year is an amount expended on supplies ordered at the end of the previous year. Assume that encumbrances do not lapse and that the City failed to make the journal entry(s) necessary to re-establish the encumbrance in the current year.
Required:
(a) Prepare all entries necessary to close the General Fund of the City of Morganville.
(b) Prepare a Statement of Revenues, Expenditures and Changes in Fund Balance for the General Fund for the City of Morganville for the Year Ended April 30, 2009. End with the unreserved fund balance. This is the GAAP operating statement.

Accepted Answer

None

Question 12

What is the effect on the General Fund's unreserved fund balance when capital assets are purchased during a year from General Fund revenues?

Accepted Answer

A)  Unreserved fund balance is increased 
B)  Unreserved fund balance is decreased 
C)  There is no effect, since one asset (cash) is replaced by another (capital asset) 
D)  None of the above, capital assets must be purchased through a capital projects fund 
A)  Unreserved fund balance is increased 
B)  Unreserved fund balance is decreased 
C)  There is no effect, since one asset (cash) is replaced by another (capital asset) 
D)  None of the above, capital assets must be purchased through a capital projects fund

Question 13

Under the consumption method to account for supplies inventory, an asset is recorded when inventories are acquired and the Expenditure is recorded when the supplies are consumed.

Accepted Answer

A) True 
 B)False

Question 14

A donation received is considered a voluntary nonexchange transaction only if it is unrestricted.

Accepted Answer

A) True 
 B)False

Question 15

The City of Lonesome Pines levied property taxes for the fiscal year ended June 30, 2009 in the amount of $8,000,000. It is estimated that 2% will not be collected. During the year ended June 30, 2009, $7,200,000 in property taxes were collected. It is estimated that $400,000 will be collected during the next 60 days, $240,000 will be collected after 60 days and $160,000 will not be collected. What is the maximum amount Lonesome Pines can recognize as property tax revenue for the fiscal year ended June 30, 2009 in its Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances, assuming there were no unpaid property taxes at the end of the previous year?

Accepted Answer

A)  $7,200,000 
B)  $7,600,000 
C)  $7,840,000 
D)  $8,000,000 
A)  $7,200,000 
B)  $7,600,000 
C)  $7,840,000 
D)  $8,000,000

Question 16

Which of the following is true regarding modified accrual accounting?

Accepted Answer

A)  Expenditures for claims and judgments, compensated absences and special termination benefits should be recognized whether or not the liabilities are to be paid with available resources 
B)  Expenditures for goods and services used by General Fund departments should be recognized when those goods and services are received, regardless of whether or not resources are available in the fund 
C)  Both of the above are true 
D)  Neither of the above is true 
A)  Expenditures for claims and judgments, compensated absences and special termination benefits should be recognized whether or not the liabilities are to be paid with available resources 
B)  Expenditures for goods and services used by General Fund departments should be recognized when those goods and services are received, regardless of whether or not resources are available in the fund 
C)  Both of the above are true 
D)  Neither of the above is true

Question 17

When establishing funds, governments should attempt to minimize the number of special revenue and other funds, instead using functional classification to record transaction detail.

Accepted Answer

A) True 
 B)False

Question 18

When supplies ordered by a governmental unit are received at an actual price which is more than the estimated price on the purchase order, the Encumbrance Control account is:

Accepted Answer

A)  Credited for the original estimated price for the supplies received 
B)  Credited for the actual price on the purchase order 
C)  Debited for the estimated price on the purchase order 
D)  Debited for the actual price for the supplies received 
A)  Credited for the original estimated price for the supplies received 
B)  Credited for the actual price on the purchase order 
C)  Debited for the estimated price on the purchase order 
D)  Debited for the actual price for the supplies received

Question 19

Sales taxes, income taxes and motor fuel taxes are examples of government-mandated nonexchange transactions

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

The expenditures account is debited when supplies are received under which one of the following inventory methods?

Proceeds from the Sale of Land in the General Fund is a source of funds and would be closed at year end.

Governmental fund financial statements are to be prepared on the

$60,000 of property tax owed to the city of Akron will not be collected within 60 days after year end. The year end journal entry to record this information would include a:

Which of the following is not one of the four classes into which nonexchange transactions apply in accordance with GASB Statement No. 33?

Under which method of accounting for inventories do you debit the Expenditure account and credit the Asset account when inventories are consumed?

What is the effect on the General Fund's unreserved fund balance when capital assets are purchased during a year from General Fund revenues?

Under the consumption method to account for supplies inventory, an asset is recorded when inventories are acquired and the Expenditure is recorded when the supplies are consumed.

A donation received is considered a voluntary nonexchange transaction only if it is unrestricted.

Which of the following is true regarding modified accrual accounting?

When establishing funds, governments should attempt to minimize the number of special revenue and other funds, instead using functional classification to record transaction detail.

When supplies ordered by a governmental unit are received at an actual price which is more than the estimated price on the purchase order, the Encumbrance Control account is:

Sales taxes, income taxes and motor fuel taxes are examples of government-mandated nonexchange transactions

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

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

Proprietary Funds

Fiduciary Trust Funds

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

Filters

Exam 4: Accounting for the General and Special Revenue Funds

The expenditures account is debited when supplies are received under which one of the following inventory methods?

Proceeds from the Sale of Land in the General Fund is a source of funds and would be closed at year end.

Governmental fund financial statements are to be prepared on the

$60,000 of property tax owed to the city of Akron will not be collected within 60 days after year end. The year end journal entry to record this information would include a:

Which of the following is not one of the four classes into which nonexchange transactions apply in accordance with GASB Statement No. 33?

Under which method of accounting for inventories do you debit the Expenditure account and credit the Asset account when inventories are consumed?

What is the effect on the General Fund's unreserved fund balance when capital assets are purchased during a year from General Fund revenues?

Under the consumption method to account for supplies inventory, an asset is recorded when inventories are acquired and the Expenditure is recorded when the supplies are consumed.

A donation received is considered a voluntary nonexchange transaction only if it is unrestricted.

Which of the following is true regarding modified accrual accounting?

When establishing funds, governments should attempt to minimize the number of special revenue and other funds, instead using functional classification to record transaction detail.

When supplies ordered by a governmental unit are received at an actual price which is more than the estimated price on the purchase order, the Encumbrance Control account is:

Sales taxes, income taxes and motor fuel taxes are examples of government-mandated nonexchange transactions

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

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

Proprietary Funds

Fiduciary Trust Funds

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

Filters