Question 1

Which of the following is true regarding accounting for inventories?

Accepted Answer

A)  GAAP permits use of either the consumption method or the purchases method 
B)  If inventories are significant, GAAP requires that an asset account be credited in order to record a fund balance reserve 
C)  Under the consumption method, Expenditures are debited when inventory is received 
D)  All of the above are true 
A)  GAAP permits use of either the consumption method or the purchases method 
B)  If inventories are significant, GAAP requires that an asset account be credited in order to record a fund balance reserve 
C)  Under the consumption method, Expenditures are debited when inventory is received 
D)  All of the above are true

Question 2

Which of the following accounts of a governmental unit is debited when supplies previously ordered are received?

Accepted Answer

A)  Encumbrances Control 
B)  Reserve for Supplies 
C)  Reserve for Encumbrances 
D)  Appropriations 
A)  Encumbrances Control 
B)  Reserve for Supplies 
C)  Reserve for Encumbrances 
D)  Appropriations

Question 3

If inventories are significant, GAAP requires that an asset account be credited in order to record a fund balance reserve when using the purchases method.

Accepted Answer

A) True 
 B)False

Question 4

A December 2007 year-end government should record the following expenditures:

Accepted Answer

A)  Accounts Payable due January 20, 2008 
B)  Bond Payable that matures January 30, 2008 
C)  Bond Payable that matures February 14, 2008 
D)  Both A & B 
A)  Accounts Payable due January 20, 2008 
B)  Bond Payable that matures January 30, 2008 
C)  Bond Payable that matures February 14, 2008 
D)  Both A & B

Question 5

The Expenditures control account in the General Fund is debited when:

Accepted Answer

A)  Equipment previously ordered is received 
B)  The budget is recorded 
C)  The books are closed at the end of the year 
D)  Supplies are ordered 
A)  Equipment previously ordered is received 
B)  The budget is recorded 
C)  The books are closed at the end of the year 
D)  Supplies are ordered

Question 6

Expenditures are generally recorded and fund liabilities are recognized

Accepted Answer

A)  When goods and services are received, but only if resources are available in the fund 
B)  When goods and services are received, regardless of whether or not resources are available in the fund 
C)  When purchase orders are issued, regardless of whether or not resources are available in the fund 
D)  When invoices are paid 
A)  When goods and services are received, but only if resources are available in the fund 
B)  When goods and services are received, regardless of whether or not resources are available in the fund 
C)  When purchase orders are issued, regardless of whether or not resources are available in the fund 
D)  When invoices are paid

Question 7

General Fund resources were expended in the amount of $180,000 to purchase a new fire truck. The General Fund would debit:

Accepted Answer

A)  Expenditures Control 
B)  Capital assets -Motor Vehicles 
C)  Both (a) and (b) above 
D)  None of the above; no entry is made in the General Fund when a motor vehicle is purchased 
A)  Expenditures Control 
B)  Capital assets -Motor Vehicles 
C)  Both (a) and (b) above 
D)  None of the above; no entry is made in the General Fund when a motor vehicle is purchased

Question 8

An example of an imposed nonexchange revenue is the property tax.

Accepted Answer

A) True 
 B)False

Question 9

The City of Smithville was awarded a federal grant on May 1, 2009 in the amount of $2,400,000 for the purpose of conducting a summer youth employment program. This was a reimbursement-type grant. On August 31, $2,400,000 of expenditures were recorded and cash was paid out. On October 15 the $2,400,000 was received from the federal government. Record necessary entries as of July 1, August 31, September 30 and October 15.

Accepted Answer

None

Question 10

Sales taxes, income taxes and motor fuel taxes are examples of which class of nonexchange transactions?

Accepted Answer

A)  Imposed nonexchange transactions 
B)  Derived tax revenues 
C)  Government-mandated nonexchange transactions 
D)  Voluntary nonexchange transactions 
A)  Imposed nonexchange transactions 
B)  Derived tax revenues 
C)  Government-mandated nonexchange transactions 
D)  Voluntary nonexchange transactions

Question 11

Short-term loans which are backed by the taxing power of the governmental unit and used to meet working capital requirements are called:

Accepted Answer

A)  Tax anticipation notes 
B)  Inter-fund loans 
C)  Other financing sources 
D)  Appropriation loan 
A)  Tax anticipation notes 
B)  Inter-fund loans 
C)  Other financing sources 
D)  Appropriation loan

Question 12

The GASB has categorized nonexchange transactions into three types: (1) derived tax revenues, (2) imposed nonexchange revenues and (3) voluntary nonexchange transactions.

Accepted Answer

A) True 
 B)False

Question 13

Real estate property tax is an example of derived tax revenue.

Accepted Answer

A) True 
 B)False

Question 14

The Town of Tonawanda has $21,000 of purchase orders outstanding at the end of 2008 which will be honored. The goods and supplies were received early in January, 2009. The invoice amounted to $19,300 What is the journal entry necessary to re-establish the encumbrance? 
A.
$\begin{array}{lccc}
  \text {  Encumbrances Control(2008)  } &21,000 \
 \text { Reserve for Encumbrances (2008) } & &21,000
\end{array}$
B.
$\begin{array}{lccc}
  \text { Reserve for Encumbrances (2008)  } &21,000 \
 \text { Fund Balance - Unreserved } & &21,000
\end{array}$
C.
$\begin{array}{lccc}
  \text { Encumbrances Control (2008) } &21,000 \
 \text {  Fund Balance - Unreserved } & &21,000
\end{array}$
D.
$\begin{array}{lccc}
  \text { Reserve for Encumbrances } &21,000 \
 \text { Encumbrances Control (2008) } & &21,000\
\text { Expenditures Control (2008) } &19,300 \
 \text {Accounts payable  } & &19,300\
\end{array}$

Accepted Answer

A)  Choice A 
B)  Choice B 
C)  Choice C 
D)  Choice D 
A)  Choice A 
B)  Choice B 
C)  Choice C 
D)  Choice D

Question 15

Debt service expenditures for principal and interest are:

Accepted Answer

A)  Accrued 
B)  Recorded when due but may be accrued at year end if debt service due date is less than 30 days after year end 
C)  Recorded when due but may be accrued at year end if debt service due date is less than 60 days after year 
D)  Expensed when incurred 
A)  Accrued 
B)  Recorded when due but may be accrued at year end if debt service due date is less than 30 days after year end 
C)  Recorded when due but may be accrued at year end if debt service due date is less than 60 days after year 
D)  Expensed when incurred

Question 16

Under the modified accrual basis of accounting, GASB standards for property tax revenue recognition provide that revenue should not be recognized for property taxes collected:

Accepted Answer

A)  After fiscal year end 
B)  More than 30 days after fiscal year end 
C)  More than 60 days after fiscal year end 
D)  More than 90 days after fiscal year end 
A)  After fiscal year end 
B)  More than 30 days after fiscal year end 
C)  More than 60 days after fiscal year end 
D)  More than 90 days after fiscal year end

Question 17

A transfer should be reported in the operating statement of the General Fund as a(an):

Accepted Answer

A)  Revenue or Expenditure 
B)  Due from or Due to Other Funds 
C)  Other Financing Source or Use 
D)  None of the above, it is a direct increase or decrease to fund balance 
A)  Revenue or Expenditure 
B)  Due from or Due to Other Funds 
C)  Other Financing Source or Use 
D)  None of the above, it is a direct increase or decrease to fund balance

Question 18

Governmental fund financial statements are to be prepared on the accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 19

When delinquent taxes are written off:

Accepted Answer

A)  The related interest and penalties are written off and the records are retained 
B)  The taxes, interest and penalties are moved into an uncollectible receivable account which accrues interest until collected 
C)  Both A & B 
D)  None of the above 
A)  The related interest and penalties are written off and the records are retained 
B)  The taxes, interest and penalties are moved into an uncollectible receivable account which accrues interest until collected 
C)  Both A & B 
D)  None of the above

Question 20

Non-exchange transactions are transactions in which one party gives or receives value without directly receiving or giving equal value in return.

Accepted Answer

A) True 
 B)False

Which of the following is true regarding accounting for inventories?

Which of the following accounts of a governmental unit is debited when supplies previously ordered are received?

If inventories are significant, GAAP requires that an asset account be credited in order to record a fund balance reserve when using the purchases method.

A December 2007 year-end government should record the following expenditures:

The Expenditures control account in the General Fund is debited when:

Expenditures are generally recorded and fund liabilities are recognized

General Fund resources were expended in the amount of $180,000 to purchase a new fire truck. The General Fund would debit:

An example of an imposed nonexchange revenue is the property tax.

Sales taxes, income taxes and motor fuel taxes are examples of which class of nonexchange transactions?

Short-term loans which are backed by the taxing power of the governmental unit and used to meet working capital requirements are called:

The GASB has categorized nonexchange transactions into three types: (1) derived tax revenues, (2) imposed nonexchange revenues and (3) voluntary nonexchange transactions.

Real estate property tax is an example of derived tax revenue.

Debt service expenditures for principal and interest are:

Under the modified accrual basis of accounting, GASB standards for property tax revenue recognition provide that revenue should not be recognized for property taxes collected:

A transfer should be reported in the operating statement of the General Fund as a(an):

Governmental fund financial statements are to be prepared on the accrual basis of accounting.

When delinquent taxes are written off:

Non-exchange transactions are transactions in which one party gives or receives value without directly receiving or giving equal value in return.

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

Which of the following is true regarding accounting for inventories?

Which of the following accounts of a governmental unit is debited when supplies previously ordered are received?

If inventories are significant, GAAP requires that an asset account be credited in order to record a fund balance reserve when using the purchases method.

A December 2007 year-end government should record the following expenditures:

The Expenditures control account in the General Fund is debited when:

Expenditures are generally recorded and fund liabilities are recognized

General Fund resources were expended in the amount of $180,000 to purchase a new fire truck. The General Fund would debit:

An example of an imposed nonexchange revenue is the property tax.

Sales taxes, income taxes and motor fuel taxes are examples of which class of nonexchange transactions?

Short-term loans which are backed by the taxing power of the governmental unit and used to meet working capital requirements are called:

The GASB has categorized nonexchange transactions into three types: (1) derived tax revenues, (2) imposed nonexchange revenues and (3) voluntary nonexchange transactions.

Real estate property tax is an example of derived tax revenue.

Debt service expenditures for principal and interest are:

Under the modified accrual basis of accounting, GASB standards for property tax revenue recognition provide that revenue should not be recognized for property taxes collected:

A transfer should be reported in the operating statement of the General Fund as a(an):

Governmental fund financial statements are to be prepared on the accrual basis of accounting.

When delinquent taxes are written off:

Non-exchange transactions are transactions in which one party gives or receives value without directly receiving or giving equal value in return.

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