Question 1

A city's Water and Sewer Enterprise Fund should include which of the following components in its statement of net position?

Accepted Answer

A) only assets,liabilities,and net position 
B) assets,deferred outflows,liabilities,deferred inflows,and net position 
C) assets,deferred outflows,liabilities,deferred inflows,and retained earnings 
D) assets,liabilities,and retained earnings 
A) only assets,liabilities,and net position 
B) assets,deferred outflows,liabilities,deferred inflows,and net position 
C) assets,deferred outflows,liabilities,deferred inflows,and retained earnings 
D) assets,liabilities,and retained earnings

Question 2

When an Internal Service Fund sends a bill to the General Fund,which account should the Internal Service Fund debit?

Accepted Answer

A) expenditures - vehicle usage 
B) transfer out to the general fund 
C) revenues - vehicle charges 
D) due from general fund 
A) expenditures - vehicle usage 
B) transfer out to the general fund 
C) revenues - vehicle charges 
D) due from general fund

Question 3

Governments control their Enterprise Fund revenues and expenses in what way?

Accepted Answer

A) by using encumbrance accounting 
B) by recording flexible budget amounts in the accounts 
C) by controlling and approving the rates they can charge for services 
D) by ensuring there is a competitive market for its services 
A) by using encumbrance accounting 
B) by recording flexible budget amounts in the accounts 
C) by controlling and approving the rates they can charge for services 
D) by ensuring there is a competitive market for its services

Question 4

(Conceptual problem regarding the use of Proprietary Funds)
State whether the following are true or false.For the false items,explain why they are false.
a.Enterprise Funds are used only when all services are provided to non-governmental entities,and Internal Service Funds are used only when all services are provided to governmental agencies that are a part of the reporting government.
b.Enterprise Funds use the economic resources measurement focus and full accrual basis of accounting only when they want to compute the costs of services;otherwise,they use the current financial resources measurement focus and modified accrual basis of accounting.
c.The primary activities of the State Office of General Services and the State Parks Department are financed from General Fund appropriations.The former department also operates a governmental motor pool and the latter operates a public swimming pool.Because their primary activities are financed from the General Fund,they may not under any circumstances account for other activities in proprietary funds.
d.An Enterprise Fund must be used whenever a government charges fees to external users for goods or services.

Accepted Answer

All of these statements are false.
a.To

Question 5

Proprietary fund net position must be reported in which three elements?

Accepted Answer

A) nonexpendable,restricted,and unrestricted 
B) net investment in capital assets,restricted,and unrestricted 
C) restricted,committed and unrestricted 
D) additional- paid-in-capital,restricted,and unrestricted 
E) restricted,committed,assigned 
A) nonexpendable,restricted,and unrestricted 
B) net investment in capital assets,restricted,and unrestricted 
C) restricted,committed and unrestricted 
D) additional- paid-in-capital,restricted,and unrestricted 
E) restricted,committed,assigned

Question 6

Enterprise funds report capital contributions separate from operating and nonoperating revenues and expenses.When does an inflow of resources constitute a capital contribution?

Accepted Answer

A) when the inflows must be used to purchase capital assets or consist of capital assets 
B) when the inflows are grants restricted to use on capital projects 
C) when the contributions are from property owners 
D) when the inflow consists of donated capital assets 
A) when the inflows must be used to purchase capital assets or consist of capital assets 
B) when the inflows are grants restricted to use on capital projects 
C) when the contributions are from property owners 
D) when the inflow consists of donated capital assets

Question 7

The GASB statement of cash flows is different from that required in the private sector in which of these ways?

Accepted Answer

A) It excludes permanently restricted cash flows 
B) It excludes investing cash flows 
C) It requires reporting operating cash flows using the direct method 
D) It is not required unless the reporting entity issues debt. 
A) It excludes permanently restricted cash flows 
B) It excludes investing cash flows 
C) It requires reporting operating cash flows using the direct method 
D) It is not required unless the reporting entity issues debt.

Question 8

Which of the following statements is true about the source of Enterprise Fund revenues?

Accepted Answer

A) enterprise fund revenues may include revenues from sales to governmental agencies 
B) enterprise fund revenues always come from sales to individuals and organizations other than governmental organizations 
C) enterprise funds never receive governmental subsidies 
D) enterprise funds record proceeds from revenue bonds as revenues 
A) enterprise fund revenues may include revenues from sales to governmental agencies 
B) enterprise fund revenues always come from sales to individuals and organizations other than governmental organizations 
C) enterprise funds never receive governmental subsidies 
D) enterprise funds record proceeds from revenue bonds as revenues

Question 9

The General Fund transfers $500,000 to a Printing Internal Service Fund,which the Internal Service Fund uses to acquire machinery.How should the Internal Service Fund account for the cost of acquiring and using the equipment?

Accepted Answer

A) record the acquisition cost as an expenditure and ignore any depreciation 
B) record the acquisition cost as an asset and depreciate it over its estimated useful life 
C) record the acquisition cost as an asset,credit investment in capital assets,do not depreciate the asset,and write off the entire asset when it is disposed of 
D) record the acquisition cost as an expenditure of the General Fund 
A) record the acquisition cost as an expenditure and ignore any depreciation 
B) record the acquisition cost as an asset and depreciate it over its estimated useful life 
C) record the acquisition cost as an asset,credit investment in capital assets,do not depreciate the asset,and write off the entire asset when it is disposed of 
D) record the acquisition cost as an expenditure of the General Fund

Question 10

An Enterprise Fund issued bonds in the amount of $100,000 and immediately acquired capital assets from the bond proceeds at a cost of $100,000.As of December 31,2013,accumulated depreciation on the assets was $10,000.Also,as of December 31,2013,the Enterprise Fund had paid back $15,000 of the debt principal.In its December 31,2013,statement of net position,how much should the Fund report as its net investment in capital assets?

Accepted Answer

A) $90,000 
B) $85,000 
C) $15,000 
D) $5,000 
A) $90,000 
B) $85,000 
C) $15,000 
D) $5,000

Question 11

Which of the following would least likely be accounted for in an Enterprise Fund?

Accepted Answer

A) a local government's mass transit operation 
B) a public swimming pool for which the government charges admission fees 
C) a municipal golf course 
D) a fire department 
A) a local government's mass transit operation 
B) a public swimming pool for which the government charges admission fees 
C) a municipal golf course 
D) a fire department

Question 12

In establishing prices for its services,which of the following practices is the least appropriate for an Internal Service Fund?

Accepted Answer

A) price at less than cost 
B) price at cost only 
C) price at cost plus an amount for anticipated inflation of equipment costs 
D) price at cost plus an amount for depreciation of equipment purchased with a transfer of cash from the General Fund 
A) price at less than cost 
B) price at cost only 
C) price at cost plus an amount for anticipated inflation of equipment costs 
D) price at cost plus an amount for depreciation of equipment purchased with a transfer of cash from the General Fund

Question 13

An Internal Service Fund (ISF)sends bills for motor vehicle services to various departments that receive appropriations from the General Fund.When it sends the bills out,which account should the ISF credit?

Accepted Answer

A) due from general fund 
B) other financing sources - motor vehicle services 
C) revenues - motor vehicle services 
D) expenditures - motor vehicle costs 
A) due from general fund 
B) other financing sources - motor vehicle services 
C) revenues - motor vehicle services 
D) expenditures - motor vehicle costs

Question 14

A Water Enterprise Fund (EF)issues $4 million of 5% revenue bonds on October 1,2013.The EF will make its first payment of interest on March 31,2014,together with a principal payment of $200,000.What amount,if any,should the EF report in its fund statement of revenues,expenses,and changes in net position for the year ended December 31,2013?

Accepted Answer

A) zero 
B) interest expense of $100,000 
C) interest expense of $50,000 and principal expense of $100,000 
D) interest expense of $50,000 
A) zero 
B) interest expense of $100,000 
C) interest expense of $50,000 and principal expense of $100,000 
D) interest expense of $50,000

Question 15

The Village of Catlett provides electricity to its residents through an Enterprise Fund (EF).The EF's fiscal year ends June 30.Its last payroll period starts June 26 and ends July 7.For financial reporting purposes,how should the EF handle the salaries earned by its employees June 26-30?

Accepted Answer

A) Nothing should be done,because nothing needs to be reported for the period June 26-30 
B) The EF should report salary expense and a liability for salaries earned by employees during June 26-30 
C) The EF should report a liability for salaries earned and expected to be earned from June 26 to July 7 
D) The EF should disclose the salaries earned,but not paid,in a note to the financial statements 
A) Nothing should be done,because nothing needs to be reported for the period June 26-30 
B) The EF should report salary expense and a liability for salaries earned by employees during June 26-30 
C) The EF should report a liability for salaries earned and expected to be earned from June 26 to July 7 
D) The EF should disclose the salaries earned,but not paid,in a note to the financial statements

Question 16

A proprietary fund statement of net position report assets and liabilities in what format?

Accepted Answer

A) relative order of liquidity 
B) classified (current/noncurrent) 
C) by asset/liability type 
D) separating capital assets and related debt for other assets and liabilities 
A) relative order of liquidity 
B) classified (current/noncurrent) 
C) by asset/liability type 
D) separating capital assets and related debt for other assets and liabilities

Question 17

Which basis of accounting is used by Enterprise Funds?

Accepted Answer

A) full accrual 
B) modified accrual 
C) cash 
D) modified cash 
A) full accrual 
B) modified accrual 
C) cash 
D) modified cash

A city's Water and Sewer Enterprise Fund should include which of the following components in its statement of net position?

When an Internal Service Fund sends a bill to the General Fund,which account should the Internal Service Fund debit?

Governments control their Enterprise Fund revenues and expenses in what way?

Proprietary fund net position must be reported in which three elements?

Enterprise funds report capital contributions separate from operating and nonoperating revenues and expenses.When does an inflow of resources constitute a capital contribution?

The GASB statement of cash flows is different from that required in the private sector in which of these ways?

Which of the following statements is true about the source of Enterprise Fund revenues?

The General Fund transfers $500,000 to a Printing Internal Service Fund,which the Internal Service Fund uses to acquire machinery.How should the Internal Service Fund account for the cost of acquiring and using the equipment?

Which of the following would least likely be accounted for in an Enterprise Fund?

In establishing prices for its services,which of the following practices is the least appropriate for an Internal Service Fund?

An Internal Service Fund (ISF)sends bills for motor vehicle services to various departments that receive appropriations from the General Fund.When it sends the bills out,which account should the ISF credit?

The Village of Catlett provides electricity to its residents through an Enterprise Fund (EF).The EF's fiscal year ends June 30.Its last payroll period starts June 26 and ends July 7.For financial reporting purposes,how should the EF handle the salaries earned by its employees June 26-30?

A proprietary fund statement of net position report assets and liabilities in what format?

Which basis of accounting is used by Enterprise Funds?

Governmental and Not-For-Profit

The Use of Funds in Governmental Accounting

Budgetary Considerations in Governmental Accounting

The Governmental Fund Accounting Cycle

The Governmental Fund Accounting Cycle

The Governmental Fund Accounting Cycle

The Governmental Fund Accounting Cycle--Fiduciary Funds

Reporting Principles and Preparation of Fund Financial Statements

Government-Wide Financial Statements

Federal Government Accounting and Reporting

Accounting for Not-For-Profit Organizations

Accounting for Health Care Organizations

Analysis of Financial Statements and Financial Condition

Fundamentals of Accounting

Filters

Exam 7: The Governmental Accounting Cycle

A city's Water and Sewer Enterprise Fund should include which of the following components in its statement of net position?

When an Internal Service Fund sends a bill to the General Fund,which account should the Internal Service Fund debit?

Governments control their Enterprise Fund revenues and expenses in what way?

Proprietary fund net position must be reported in which three elements?

Enterprise funds report capital contributions separate from operating and nonoperating revenues and expenses.When does an inflow of resources constitute a capital contribution?

The GASB statement of cash flows is different from that required in the private sector in which of these ways?

Which of the following statements is true about the source of Enterprise Fund revenues?

The General Fund transfers $500,000 to a Printing Internal Service Fund,which the Internal Service Fund uses to acquire machinery.How should the Internal Service Fund account for the cost of acquiring and using the equipment?

Which of the following would least likely be accounted for in an Enterprise Fund?

In establishing prices for its services,which of the following practices is the least appropriate for an Internal Service Fund?

An Internal Service Fund (ISF)sends bills for motor vehicle services to various departments that receive appropriations from the General Fund.When it sends the bills out,which account should the ISF credit?

The Village of Catlett provides electricity to its residents through an Enterprise Fund (EF).The EF's fiscal year ends June 30.Its last payroll period starts June 26 and ends July 7.For financial reporting purposes,how should the EF handle the salaries earned by its employees June 26-30?

A proprietary fund statement of net position report assets and liabilities in what format?

Which basis of accounting is used by Enterprise Funds?

Governmental and Not-For-Profit

The Use of Funds in Governmental Accounting

Budgetary Considerations in Governmental Accounting

The Governmental Fund Accounting Cycle

The Governmental Fund Accounting Cycle

The Governmental Fund Accounting Cycle

The Governmental Fund Accounting Cycle--Fiduciary Funds

Reporting Principles and Preparation of Fund Financial Statements

Government-Wide Financial Statements

Federal Government Accounting and Reporting

Accounting for Not-For-Profit Organizations

Accounting for Health Care Organizations

Analysis of Financial Statements and Financial Condition

Fundamentals of Accounting

Filters