Question 1

Which of the following activities or services would most likely not be accounted for by an internal service fund?

Accepted Answer

A) Electronic data processing. 
B) Central purchasing,warehousing,and issuing of supplies. 
C) Municipal golf course. 
D) Risk management. 
A) Electronic data processing. 
B) Central purchasing,warehousing,and issuing of supplies. 
C) Municipal golf course. 
D) Risk management.

Question 2

What factors should be considered in determining whether an activity or operation should be accounted for as an enterprise fund or as a governmental fund? As an internal service fund?

Accepted Answer

Under GASB standards,certain activities

Question 3

Internal service funds should not account for depreciation of capital assets used in their operations,since this would,in effect,charge the government twice for the same assets.

Accepted Answer

A) True 
 B)False

Question 4

Depreciation on capital assets used by an enterprise fund of a government

Accepted Answer

A) Should not be recorded for infrastructure assets. 
B) Should be recorded in the General Fund as an expenditure. 
C) Should be recorded in the governmental activities accounts. 
D) Should be recorded in the enterprise fund as an expense. 
A) Should not be recorded for infrastructure assets. 
B) Should be recorded in the General Fund as an expenditure. 
C) Should be recorded in the governmental activities accounts. 
D) Should be recorded in the enterprise fund as an expense.

Question 5

"Enterprise funds should not be permitted to accumulate unrestricted net assets,since to do so would indicate overpricing of its services." Do you agree? Why or why not?

Accepted Answer

No.It is in the best interest of taxpaye

Question 6

Matured interest and principal on enterprise fund revenue bonds should be recorded in a debt service fund until paid.

Accepted Answer

A) True 
 B)False

Question 7

Sales revenues of a utility for a certain fiscal period

Accepted Answer

A) Are equivalent to total debits to Customer Accounts Receivable for that period. 
B) Include receivables billed during a fiscal period,plus receivables billed early in the next year if meters were read before year-end. 
C) Should be reported on the cash basis for the sake of conservatism. 
D) Include billed receivables and an accrual for unbilled receivables as of the balance sheet date. 
A) Are equivalent to total debits to Customer Accounts Receivable for that period. 
B) Include receivables billed during a fiscal period,plus receivables billed early in the next year if meters were read before year-end. 
C) Should be reported on the cash basis for the sake of conservatism. 
D) Include billed receivables and an accrual for unbilled receivables as of the balance sheet date.

Question 8

Which of the following items is not required to be included in the segment information that must be reported for a municipality's enterprise funds?

Accepted Answer

A) Material enterprise fund capital assets. 
B) Material enterprise fund operating income or loss. 
C) Material enterprise fund tax revenues. 
D) Material intergovernmental operating subsidies to an enterprise fund. 
A) Material enterprise fund capital assets. 
B) Material enterprise fund operating income or loss. 
C) Material enterprise fund tax revenues. 
D) Material intergovernmental operating subsidies to an enterprise fund.

Question 9

Utility enterprise funds that report to regulatory agencies may capitalize both actual interest paid on debt incurred for construction of plant assets and an imputed amount on their own funds so used.

Accepted Answer

A) True 
 B)False

Question 10

A government provided original financing for its supplies fund by a transfer of $40,000 cash from the General Fund.The transferee fund credited the amount to Interfund Loan from General Fund-Noncurrent.Assuming that the terminology is correct,how should the transfer be classified in the statements of the supplies fund? Suggest an appropriate name for the corresponding account in the General Fund; how should the corresponding account be shown in the statements of the General Fund?

Accepted Answer

Interfund Loan from General Fund should

Question 11

The Gotham City Golf Course,an enterprise fund,purchased new furniture for use in the golf pro's office.The debit for the entry to record the event should be to

Accepted Answer

A) Expenditures. 
B) Purchases. 
C) Furniture and fixtures. 
D) General capital assets. 
A) Expenditures. 
B) Purchases. 
C) Furniture and fixtures. 
D) General capital assets.

Question 12

Under GASB standards,an internal service fund should prepare all of the following financial statements except for a

Accepted Answer

A) Statement of revenues,expenditures,and changes in fund balance. 
B) Statement of revenues,expenses,and changes in net assets. 
C) Statement of net assets. 
D) Statement of cash flows. 
A) Statement of revenues,expenditures,and changes in fund balance. 
B) Statement of revenues,expenses,and changes in net assets. 
C) Statement of net assets. 
D) Statement of cash flows.

Question 13

A statement of revenues,expenses,and changes in net assets for an internal service fund is similar in many respects to an income statement prepared for an investor-owned business.

Accepted Answer

A) True 
 B)False

Question 14

What amount of the following items should be accounted for in an internal service fund?

Accepted Answer

A) $2,100,000. 
B) $1,760,000. 
C) $1,640,000. 
D) $350,000. 
A) $2,100,000. 
B) $1,760,000. 
C) $1,640,000. 
D) $350,000.

Question 15

The Central Stores Fund of Cook City provides centralized management of purchasing,storage,and issue of supplies for the entire City.For the following summarized transactions and events for the year ended June 30,provide the fund level entries in general journal form required to conform to generally accepted accounting principles.If no entry is needed,so indicate.
1)The Central Stores Fund ordered supplies at an estimated cost of $62,000.
2)The supplies ordered in (1)above were received at invoice costs of $60,400; these invoices were approved for payment.
3)Supplies costing $51,800 were issued to the City General Fund and billed to that fund at a markup of 20 percent on cost.
4)Expenses paid in cash during the year were: purchasing,$5,700; warehousing,$7,100; and general and administrative,$6,200.

Accepted Answer

The answer of The Central Stores Fund of Cook City...

Question 16

Revenues of internal service funds should be recognized only when they are expected to be available in time to pay current liabilities of the fund.

Accepted Answer

A) True 
 B)False

Question 17

The amount of expense and liability to be reported each period for the closure and postclosure costs of a municipal solid waste landfill (MSWLF)is proportional to the amount of landfill capacity used during the period.

Accepted Answer

A) True 
 B)False

Question 18

The following cash transactions were among those reported by Crawford County's Water and Sewer Enterprise Fund for the year:   In the Water and Sewer Enterprise Fund's statement of cash flows for the year ended December 31,what amount should be reported as cash flows from capital and related financing activities?

Accepted Answer

A) $5,000,000. 
B) $6,000,000. 
C) $8,000,000. 
D) $9,000,000. 
A) $5,000,000. 
B) $6,000,000. 
C) $8,000,000. 
D) $9,000,000.

Question 19

Which of the following account balances would only be reported if a city-owned utility followed regulatory accounting principles?

Accepted Answer

A) Depreciation expense. 
B) Pumping expense. 
C) Restricted Assets-Cash. 
D) Utility Plant Acquisition Adjustments. 
A) Depreciation expense. 
B) Pumping expense. 
C) Restricted Assets-Cash. 
D) Utility Plant Acquisition Adjustments.

Question 20

Which of the following organizations or units would least likely be accounted for by an enterprise fund?

Accepted Answer

A) A hospital. 
B) An airport. 
C) The computer department. 
D) A sports stadium. 
A) A hospital. 
B) An airport. 
C) The computer department. 
D) A sports stadium.

Which of the following activities or services would most likely not be accounted for by an internal service fund?

What factors should be considered in determining whether an activity or operation should be accounted for as an enterprise fund or as a governmental fund? As an internal service fund?

Internal service funds should not account for depreciation of capital assets used in their operations,since this would,in effect,charge the government twice for the same assets.

Depreciation on capital assets used by an enterprise fund of a government

"Enterprise funds should not be permitted to accumulate unrestricted net assets,since to do so would indicate overpricing of its services." Do you agree? Why or why not?

Matured interest and principal on enterprise fund revenue bonds should be recorded in a debt service fund until paid.

Sales revenues of a utility for a certain fiscal period

Which of the following items is not required to be included in the segment information that must be reported for a municipality's enterprise funds?

Utility enterprise funds that report to regulatory agencies may capitalize both actual interest paid on debt incurred for construction of plant assets and an imputed amount on their own funds so used.

The Gotham City Golf Course,an enterprise fund,purchased new furniture for use in the golf pro's office.The debit for the entry to record the event should be to

Under GASB standards,an internal service fund should prepare all of the following financial statements except for a

A statement of revenues,expenses,and changes in net assets for an internal service fund is similar in many respects to an income statement prepared for an investor-owned business.

What amount of the following items should be accounted for in an internal service fund?

Revenues of internal service funds should be recognized only when they are expected to be available in time to pay current liabilities of the fund.

The amount of expense and liability to be reported each period for the closure and postclosure costs of a municipal solid waste landfill (MSWLF)is proportional to the amount of landfill capacity used during the period.

Which of the following account balances would only be reported if a city-owned utility followed regulatory accounting principles?

Which of the following organizations or units would least likely be accounted for by an enterprise fund?

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Entities

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts; Budgetary Accounting

Accounting for Governmental Operating Activitiesillustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for Fiduciary Activities Agency and Trust Funds

Financial Reporting of State and Local Governments

Analysis of Governmental Financial Performance

Auditing of Governmental and Not-For-Profit Organizations

Budgeting and Performance Measurement

Accounting for Not-For-Profit Organizations

Not-For-Profit Organizations Regulatory, taxation, and Performance Issues

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government

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Exam 7: Accounting for the Business-Type Activities of State and Local Governments

Which of the following activities or services would most likely not be accounted for by an internal service fund?

What factors should be considered in determining whether an activity or operation should be accounted for as an enterprise fund or as a governmental fund? As an internal service fund?

Internal service funds should not account for depreciation of capital assets used in their operations,since this would,in effect,charge the government twice for the same assets.

Depreciation on capital assets used by an enterprise fund of a government

"Enterprise funds should not be permitted to accumulate unrestricted net assets,since to do so would indicate overpricing of its services." Do you agree? Why or why not?

Matured interest and principal on enterprise fund revenue bonds should be recorded in a debt service fund until paid.

Sales revenues of a utility for a certain fiscal period

Which of the following items is not required to be included in the segment information that must be reported for a municipality's enterprise funds?

Utility enterprise funds that report to regulatory agencies may capitalize both actual interest paid on debt incurred for construction of plant assets and an imputed amount on their own funds so used.

The Gotham City Golf Course,an enterprise fund,purchased new furniture for use in the golf pro's office.The debit for the entry to record the event should be to

Under GASB standards,an internal service fund should prepare all of the following financial statements except for a

A statement of revenues,expenses,and changes in net assets for an internal service fund is similar in many respects to an income statement prepared for an investor-owned business.

What amount of the following items should be accounted for in an internal service fund?

Revenues of internal service funds should be recognized only when they are expected to be available in time to pay current liabilities of the fund.

The amount of expense and liability to be reported each period for the closure and postclosure costs of a municipal solid waste landfill (MSWLF)is proportional to the amount of landfill capacity used during the period.

Which of the following account balances would only be reported if a city-owned utility followed regulatory accounting principles?

Which of the following organizations or units would least likely be accounted for by an enterprise fund?

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Entities

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts; Budgetary Accounting

Accounting for Governmental Operating Activitiesillustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for Fiduciary Activities Agency and Trust Funds

Financial Reporting of State and Local Governments

Analysis of Governmental Financial Performance

Auditing of Governmental and Not-For-Profit Organizations

Budgeting and Performance Measurement

Accounting for Not-For-Profit Organizations

Not-For-Profit Organizations Regulatory, taxation, and Performance Issues

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government

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