Exam 5: The Governmental Fund Accounting Cycle

At the time a government levies the property tax,an allowance for uncollectible property taxes is established so that

Which of the following is not considered to be a "derived" tax revenue based on GASB standards?

The measurement focus used by governmental fund measures:

Which of the following best describes an assignment of fund balance?

(Journal entries - interfund transactions) Theodore County uses a General Fund,a Special Revenue Fund,and an Enterprise Fund.The Special Revenue Fund is financed by a grant from the state to provide care for the elderly.The Enterprise Fund provides bus service both to the public and to government agencies.Prepare entries to record these transactions.Indentify the funds involved in each case. a.The Enterprise Fund bills the Special Revenue Fund $15,000 for bus service provided to the elderly. b.The General Fund receives an electricity bill for $20,000 and prepares a voucher to pay the bill.The General Fund then bills the Special Revenue Fund for $3,000,representing the portion of the electricity bill applicable to the senior citizens building. c.The Enterprise Fund is short of cash to pay its bills.The General Fund lends the Enterprise Fund $50,000 in cash,which will be repaid before the end of the year. d.The General Fund pays cash of $100,000 to the Enterprise Fund as a subsidy to help meet the operating costs of the Enterprise Fund.

For the general fund,the residual fund balance classification is:

(Treatment of inventory-purchases method) The General Fund of the City of Mineral Wells shows $40,000 in supplies inventory on January 1,2013.During the year 2013,General Fund cash is used to purchase $110,000 of supplies.On December 31,2013,the city conducts an inventory count and finds $50,000 of supplies inventory remains.Using the purchases method of accounting for inventory,prepare the journal entries necessary to record (a)the purchase of the inventory and (b)to make the year-end adjustment to inventory.

A state provides a city with a grant of $500,000 for a special "meals for the homeless" program.The city will receive payment from the state within 30 days of incurring eligible expenditures for homeless people.When should the city recognize revenues under this grant?

A school district receives a grant from the federal government to reimburse the district for the salaries of teachers in an "English as a Second Language" program.The grant has no time requirements.The school district has paid the teachers and expects to receive payment from the federal government within 30 days of year-end.Which of the following journal entries would be needed for the school district?

A city has only one special revenue fund.All the fund balance classifications that it reports have positive balances.Which of the following fund balance classifications would not be reported by the city?

Which of the following best describes the general principle for recognizing property tax revenues in the General Fund?

A town's garbage trucks accidentally sideswiped two parked automobiles in the year ended December 31,2013.One case was settled for $3,000,and the town expects to pay it in January 2014.In the other case,the claimant originally demanded $15,000.The town attorney thinks they can settle the claim for $10,000,but it probably will take two years to settle the case.What amount should the town report as a claims liability on the General Fund's December 31,2013 balance sheet?

A city uses the allowance method to provide for uncollectible property taxes.At the start of the year,the city established an allowance of $100,000 for uncollectible taxes.During the year,it wrote off $80,000 as uncollectible.At year-end,the city still has some uncollected taxes,but believes it will need an allowance of only $15,000 to cover any receivables that it may need to write off as uncollectible.What adjusting entry should it make?

Governmental fund liabilities are:

A property owner receives a property tax bill for $4,000 and appeals the assessment.Before he pays the bill,the city reduces his property tax to $3,000.If the city had previously established an allowance for property tax refunds,what entry should it make to record the reduction?

The highest level of decision-making authority for the City of Palo Pinto passes an ordinance that states that all royalty payments received from oil or gas production on city property must be used for street maintenance or improvements.As of the end of its current fiscal year,the city has $1,250,000 of unspent royalty payments.These amounts should be reported as part of:

The city council appropriates a portion of the government's current year-end fund balance to eliminate an anticipated budget deficit in next year's budget.Projected expenditures are anticipated to be greater than expected revenues next year.The appropriated portion of the current year's fund balance should be reported as:

(Property tax revenue recognition) In its General Fund balance sheet at December 31,2013,Marathon City reported Property taxes receivable of $40,000,deferred property tax revenues of $15,000,and an allowance for uncollectible taxes of $0.At the start of the year 2014,Marathon City made the following journal entry to record its property tax levy: Property taxes receivable 950,000 Allowance for refunds and uncollectible taxes $\quad$ 10,000 Revenues - property taxes $\quad$ 940,000 During the year 2014,the city collected all the property taxes receivable outstanding at December 31,2013.It also collected $920,000 of the receivables recognized at the beginning of 2014,and wrote off $6,000 of receivables against the allowance account.On December 31,2014,the Marathon City finance director made the following determinations regarding the property taxes outstanding at that date: a.All outstanding property taxes would be collected,so there was no need for the allowance for uncollectible property taxes. b.The City would collect about $15,000 of the outstanding property taxes receivable during the first 60 days of 2015 and the remainder during the latter part of 2015. Required: Calculate how much property tax revenues Marathon City should recognize in 2014.

A municipality uses the allowance method to record uncollectible property taxes.If it decides to write off an account as uncollectible,it should:

A city uses the purchases method of accounting for supplies in the General Fund.At year-end,the amount of supplies on hand is material and the city wants to report the inventory in its balance sheet.How should the General Fund record the inventory?