Question 1

Which of the following would NOT be determined to result in asset impairment under GASB Statement 42?

Accepted Answer

A)  An expansion project at a city airport is halted when a major airline discontinues service to city 
B)  A building is damaged by a hurricane 
C)  A truck is at the end of its useful life 
D)  New technology renders previous equipment obsolete 
A)  An expansion project at a city airport is halted when a major airline discontinues service to city 
B)  A building is damaged by a hurricane 
C)  A truck is at the end of its useful life 
D)  New technology renders previous equipment obsolete

Question 2

The following entries were in the governmental funds.
   Required:
Part A. What is the worksheet entry required to adjust beginning net assets in the 12/31/2009 government-wide financial statements for long term debt?
Part B. What are the worksheet entries to adjust for current year activity in long-term debt for the year ended 12/31/2009? Assume interest for the year is due on 12/31 and the bond premium is amortized on the straight line basis.

Accepted Answer

None

Question 3

A government recorded transfers out of the General Fund to the debt service fund in the amount of $ 600,000 and to the capital projects fund in the amount of $ 300,000. The amount that would be shown as a transfer in the governmental activities column of the Statement of Activities would be:

Accepted Answer

A)  $900,000 
B)  $600,000 
C)  $300,000 
D)  $ 0 
A)  $900,000 
B)  $600,000 
C)  $300,000 
D)  $ 0

Question 4

General (governmental) long term assets and debt have a balance of zero until the worksheet entries are made.

Accepted Answer

A) True 
 B)False

Question 5

The difference between assets and liabilities in the government-wide statements is called Net Assets.

Accepted Answer

A) True 
 B)False

Question 6

The governmental funds report a total of $1,000,000 Transfers In and $750,000 Transfers Out. To consolidate governmental activities what amount will be eliminated from the Transfers In and Transfers Out accounts?

Accepted Answer

A)  $1,000,000 
B)  $750,000 
C)  $250,000 
D)  $1,750,000 
A)  $1,000,000 
B)  $750,000 
C)  $250,000 
D)  $1,750,000

Question 7

Which of the following are reconciliations required by GASB?

Accepted Answer

A)  From governmental fund balance sheet to the Government-wide Statement of Net Assets 
B)  From governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-wide Statement of Activities 
C)  From enterprise fund balance sheet to the Government-wide Statement of Net Assets 
D)  Both A and B 
A)  From governmental fund balance sheet to the Government-wide Statement of Net Assets 
B)  From governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-wide Statement of Activities 
C)  From enterprise fund balance sheet to the Government-wide Statement of Net Assets 
D)  Both A and B

Question 8

Government-wide statements are prepared using the accrual basis; therefore, governmental fund-basis statements need to be adjusted from their original modified accrual basis.

Accepted Answer

A) True 
 B)False

Question 9

A government reported an other financing source in the amount of $800,000, related to the sale of land in its governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances. The land had a cost of $350,000. The adjustment in the reconciliation, when moving from the governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the change in net assets for governmental activities in the Statement of Activities would be a(an):

Accepted Answer

A)  Increase of $450,000 
B)  Decrease of $450,000 
C)  Increase of $350,000 
D)  Decrease of $350,000 
A)  Increase of $450,000 
B)  Decrease of $450,000 
C)  Increase of $350,000 
D)  Decrease of $350,000

Question 10

Which of the following is true regarding the government-wide Statement of Activities?

Accepted Answer

A)  Fiduciary activities are not reported 
B)  Discretely presented component units are not reported 
C)  Both of the above 
D)  Neither of the above 
A)  Fiduciary activities are not reported 
B)  Discretely presented component units are not reported 
C)  Both of the above 
D)  Neither of the above

Question 11

To qualify as a collection, a donated or purchased item must meet all of the following conditions except:

Accepted Answer

A)  Held for public exhibition, education or research to further public service 
B)  Protected, kept unencumbered, cared for and preserved 
C)  Subject to an organizational policy that requires th90e proceeds from sales of collection items to be used to acquire other collectibles 
D)  All of the above conditions must be met 
A)  Held for public exhibition, education or research to further public service 
B)  Protected, kept unencumbered, cared for and preserved 
C)  Subject to an organizational policy that requires th90e proceeds from sales of collection items to be used to acquire other collectibles 
D)  All of the above conditions must be met

Question 12

The City of Casper levied property taxes for 2009 in the amount of $8,000,000. The amount estimated to be uncollectible is 2%. By the end of the year, $7,200,000 had been collected. It was estimated that $400,000 would be collected during the next 60 days of 2008 and that $240,000 would be collected after that. The City has a policy of recognizing the full amount possible for property taxes. Which of the following statements is true?

Accepted Answer

A)  The amount reported for property tax revenue in the government-wide Statement of Activities would be $7,840,000 
B)  The amount reported for property tax revenue in the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances would be $7,600,000 
C)  Both of the above 
D)  Neither of the above 
A)  The amount reported for property tax revenue in the government-wide Statement of Activities would be $7,840,000 
B)  The amount reported for property tax revenue in the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances would be $7,600,000 
C)  Both of the above 
D)  Neither of the above

Question 13

Which of the following would NOT need to be addressed/adjusted in compiling the government-wide statements?

Accepted Answer

A)  Principal repayment on general obligation bonds 
B)  Principal repayment on proprietary funded bonds 
C)  Interfund transfers 
D)  Interest accrual on general obligation bonds 
A)  Principal repayment on general obligation bonds 
B)  Principal repayment on proprietary funded bonds 
C)  Interfund transfers 
D)  Interest accrual on general obligation bonds

Question 14

Resources and activities related to which of the following fund types is not included in the government-wide financial statements?

Accepted Answer

A)  General Fund 
B)  Capital Projects Fund 
C)  Enterprise Fund 
D)  Pension Trust Fund 
A)  General Fund 
B)  Capital Projects Fund 
C)  Enterprise Fund 
D)  Pension Trust Fund

Question 15

What fund would not be included in the government-wide financial statements

Accepted Answer

A)  Pension Trust Fund 
B)  Capital Project Fund 
C)  Enterprise Fund 
D)  General Fund 
A)  Pension Trust Fund 
B)  Capital Project Fund 
C)  Enterprise Fund 
D)  General Fund

Question 16

Which of the following is false about the worksheet entry process?

Accepted Answer

A)  Worksheet entries are never booked; they are only used on the worksheets 
B)  Worksheets for the Changes in General Fixed Assets and Changes in General Long Term Debt should be completed 
C)  Entries are not necessary for the beginning balance of long-term assets since they were entered last year 
D)  The conversion worksheet is where the government fund account balances combine with the adjustment or eliminations (worksheet entries) to come to the adjusted balances needed for the government wide statements 
A)  Worksheet entries are never booked; they are only used on the worksheets 
B)  Worksheets for the Changes in General Fixed Assets and Changes in General Long Term Debt should be completed 
C)  Entries are not necessary for the beginning balance of long-term assets since they were entered last year 
D)  The conversion worksheet is where the government fund account balances combine with the adjustment or eliminations (worksheet entries) to come to the adjusted balances needed for the government wide statements

Question 17

A government's Statement of Revenues, Expenditures and Changes in Fund Balances reflected proceeds of bonds in the amount of $1,000,000. That statement also reflected expenditures for debt service in the amount of $3,000,000, including $2,600,000 for principal payments. Assuming no other changes, the effect, when moving from the change in fund balances in the governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances to the change in net assets for governmental activities in the Statement of Activities would be a:

Accepted Answer

A)  $1,000,000 increase 
B)  $1,000,000 decrease 
C)  $1,600,000 increase 
D)  $1,600,000 decrease 
A)  $1,000,000 increase 
B)  $1,000,000 decrease 
C)  $1,600,000 increase 
D)  $1,600,000 decrease

Question 18

A government's Statement of Revenues, Expenditures and Changes in Fund Balances reflected expenditures for debt service in the amount of $12,000,000, including $5,000,000 for principal. It also reflected proceeds of bonds in the amount of $4,000,000. No interest accruals were involved. When moving from the changes in fund balances reported for the governmental funds to the change in net assets for governmental activities, the net change would be:

Accepted Answer

A)  $1,000,000 decrease 
B)  $1,000,000 increase 
C)  No change 
D)  $8,000,000 decrease 
A)  $1,000,000 decrease 
B)  $1,000,000 increase 
C)  No change 
D)  $8,000,000 decrease

Question 19

Which of the following situations would probably not result in an asset impairment?

Accepted Answer

A)  A city warehouse is damaged by fire 
B)  Recently purchased city-owned voting booths are rendered obsolete by a federal law requiring a new technology 
C)  Ridership on city buses declines 
D)  Construction on a municipal sports complex stops when the city's major league baseball team moves to another city 
A)  A city warehouse is damaged by fire 
B)  Recently purchased city-owned voting booths are rendered obsolete by a federal law requiring a new technology 
C)  Ridership on city buses declines 
D)  Construction on a municipal sports complex stops when the city's major league baseball team moves to another city

Question 20

Which of the following must be done to convert modified accrual basis to accrual basis?

Accepted Answer

A)  Record capital assets 
B)  Change expenditures for debt service principal to reduction of liabilities 
C)  Make adjustments to revenues to convert to the accrual basis of revenue recognition 
D)  All of the above 
A)  Record capital assets 
B)  Change expenditures for debt service principal to reduction of liabilities 
C)  Make adjustments to revenues to convert to the accrual basis of revenue recognition 
D)  All of the above

Which of the following would NOT be determined to result in asset impairment under GASB Statement 42?

A government recorded transfers out of the General Fund to the debt service fund in the amount of $ 600,000 and to the capital projects fund in the amount of $ 300,000. The amount that would be shown as a transfer in the governmental activities column of the Statement of Activities would be:

General (governmental) long term assets and debt have a balance of zero until the worksheet entries are made.

The difference between assets and liabilities in the government-wide statements is called Net Assets.

The governmental funds report a total of $1,000,000 Transfers In and $750,000 Transfers Out. To consolidate governmental activities what amount will be eliminated from the Transfers In and Transfers Out accounts?

Which of the following are reconciliations required by GASB?

Government-wide statements are prepared using the accrual basis; therefore, governmental fund-basis statements need to be adjusted from their original modified accrual basis.

Which of the following is true regarding the government-wide Statement of Activities?

To qualify as a collection, a donated or purchased item must meet all of the following conditions except:

Which of the following would NOT need to be addressed/adjusted in compiling the government-wide statements?

Resources and activities related to which of the following fund types is not included in the government-wide financial statements?

What fund would not be included in the government-wide financial statements

Which of the following is false about the worksheet entry process?

Which of the following situations would probably not result in an asset impairment?

Which of the following must be done to convert modified accrual basis to accrual basis?

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

Proprietary Funds

Fiduciary Trust Funds

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 8: Government-Wide Statements, Capital Assets, Long-Term Debt

Which of the following would NOT be determined to result in asset impairment under GASB Statement 42?

A government recorded transfers out of the General Fund to the debt service fund in the amount of $ 600,000 and to the capital projects fund in the amount of $ 300,000. The amount that would be shown as a transfer in the governmental activities column of the Statement of Activities would be:

General (governmental) long term assets and debt have a balance of zero until the worksheet entries are made.

The difference between assets and liabilities in the government-wide statements is called Net Assets.

The governmental funds report a total of $1,000,000 Transfers In and $750,000 Transfers Out. To consolidate governmental activities what amount will be eliminated from the Transfers In and Transfers Out accounts?

Which of the following are reconciliations required by GASB?

Government-wide statements are prepared using the accrual basis; therefore, governmental fund-basis statements need to be adjusted from their original modified accrual basis.

Which of the following is true regarding the government-wide Statement of Activities?

To qualify as a collection, a donated or purchased item must meet all of the following conditions except:

Which of the following would NOT need to be addressed/adjusted in compiling the government-wide statements?

Resources and activities related to which of the following fund types is not included in the government-wide financial statements?

What fund would not be included in the government-wide financial statements

Which of the following is false about the worksheet entry process?

Which of the following situations would probably not result in an asset impairment?

Which of the following must be done to convert modified accrual basis to accrual basis?

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

Proprietary Funds

Fiduciary Trust Funds

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