Question 1

Receivables from sales taxes are recorded in the period that the retailer submits the taxes to the government.

Accepted Answer

A) True 
 B)False

Question 2

Indicate which of the following use Modified Accrual Accounting?
$\begin{array}{lcccc}
&&\text { Government- }\

&& \text {wide}&&
 \text {Interna}\
&\text { Capital}& \text { Financial}&\text {  Special Revenue }&\text { Service }\
&\underline{ \text { Projects Fund }} &\underline{ \text { Statements }} & \underline{\text { Fund} } & \underline{\text { Fund } }\
\text { A) }   & \text { No } & \text { Yes } & \text { No } & \text { Yes } \
\text { B) } & \text { Yes } & \text { No } & \text { Yes } & \text { No } \
\text { C) } & \text { Yes } & \text { No } & \text { Yes } & \text { Yes } \
\text { D) } & \text { Yes } & \text { Yes } & \text { No } & \text { No }
\end{array}$

Accepted Answer

The answer of Indicate which of the following use Modified...

Question 3

The General Fund of the City of Lexington approved a tax levy for the calendar year 2017 in the amount of $2,600,000. During 2017, $2,250,000 was collected. During 2018, $95,000 was collected during the first 30 days, $75,000 was collected during days 31-60, and $70,000 was collected during the days 61-90. The balance is expected to be uncollectible. During the post-audit, you discovered that the City showed $2,600,000 in revenues. How much revenue should the City recognize in 2017 from this tax levy?

Accepted Answer

A)  $ 2,250,000 
B)  $ 2,345,000 
C)  $ 2,420,000 
D)  $ 2,465,000 
A)  $ 2,250,000 
B)  $ 2,345,000 
C)  $ 2,420,000 
D)  $ 2,465,000

Question 4

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

Accepted Answer

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

Question 5

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

Question 6

Although a government may use resources to supplement a special revenue fund, assignment of resources is not sufficient for the establishment of a special revenue fund.

Accepted Answer

A) True 
 B)False

Question 7

When establishing funds, governments should never attempt to minimize the number of special revenue and other funds, instead using functional classification to record transaction detail.

Accepted Answer

A) True 
 B)False

Question 8

Under the purchases method to account for supplies inventory, an asset is recorded when inventories are acquired, and the expenditure is recorded when the supplies are consumed.

Accepted Answer

A) True 
 B)False

Question 9

Prepare entries in general journal form to record the following transactions in General Fund general ledger accounts for fiscal year 2017. Use modified accrual accounting.
a) The legal budget for the year provided for $5,000,000 of estimated revenues and $4,960,000 appropriations.
b) Assume there are $ 210,000 of purchase orders outstanding at the end of last year and that these will be honored in the current year. Prepare the entries to re-establish the encumbrance.
c) Property taxes were levied in the amount of $3,300,000. It is estimated that 2 percent of the taxes will never be collected.
d) Purchase orders were issued for equipment and supplies in the amount of $4,000,000.
e) Supplies, relating to all of the prior year purchase orders $210,000, were received along with invoices amounting to $207,000.
f) Collections of current property taxes amounted to $2,950,000. The uncollected taxes recorded as delinquent.
g) It was estimated that $210,000 in property taxes would be collected in the first 60 days of 2017 and that $160,000 would be collected in later periods.

Accepted Answer

The answer of Prepare entries in general journal form to...

Question 10

Which of the following is correct with respect to accounting for supplies inventories in a governmental fund?

Accepted Answer

A)  Supplies inventories may be recorded using either the purchase method or the consumption method. 
B)  An amount equal to the ending balance of supplies is reported as Nonspendable Fund Balance. 
C)  The consumption method is preferable over the purchase method since it requires no adjustment to supplies expense when preparing the government-wide statements. 
D)  All of the above are correct 
A)  Supplies inventories may be recorded using either the purchase method or the consumption method. 
B)  An amount equal to the ending balance of supplies is reported as Nonspendable Fund Balance. 
C)  The consumption method is preferable over the purchase method since it requires no adjustment to supplies expense when preparing the government-wide statements. 
D)  All of the above are correct

Question 11

Which of the following accounts in the General Fund is credited when a purchase order is approved?

Accepted Answer

A)  Appropriations Control. 
B)  Encumbrances Control. 
C)  Budgetary Fund Balance -- Reserve for Encumbrances. 
D)  Vouchers Payable. 
A)  Appropriations Control. 
B)  Encumbrances Control. 
C)  Budgetary Fund Balance -- Reserve for Encumbrances. 
D)  Vouchers Payable.

Question 12

The City of Stromfield had the following partial list of pre-closing account balances in its General Fund as of June 30, 2017.
 $\begin{array}{c}
\begin{array}{lll}
 \text {Appropriations Control}\
 \text {Budgetary Fund Balance}\
 \text {Budgetary Fund Balance -- Reserve for Encumbrances}\
 \text {Due to Other Funds}\
 \text {Encumbrances Control}\
 \text {Estimated Other Financing Uses Control}\
 \text {Estimated Revenues Control}\
 \text {Expenditures Control}\
 \text {Fund Balance}\
 \text {Other Financing Uses Control-Transfers Out}\
 \text {Revenues Control}\
 \text {Taxes Receivable-Delinquent}\
 \text {Vouchers Payable}
\end{array}
\begin{array}{rr}\text { Debits } & \text { Credits }\ & \$ 2,975,000 \ & 385,000 \ & 107,000 \ &40,000 \ 107,000 & \ & 300,000 \ 3,660,000 & \ 2,788,000 \ & 272,000 \ 306,000\& 3,768,000 \ 75,000 & \ & 275,000\
\end{array}
\end{array}$ 
 
Required: Prepare, in good form, a Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund for the year ended June 30, 2017.

Accepted Answer

None

Question 13

What is the difference between an extraordinary item and special item according to GASB?

Accepted Answer

A)  Extraordinary items are significant transactions or events that are unusual or infrequent while a special item is a significant transaction that is unusual and infrequent but within management's control. 
B)  Extraordinary items are significant transactions or events that are unusual and infrequent which are outside management's control while a special item is a significant transaction that is unusual and infrequent but within management's control. 
C)  Extraordinary items are significant transactions or events that are unusual and infrequent which are within management's control while a special item is a significant transaction that is unusual or infrequent but within management's control. 
D)  Extraordinary items are significant transactions or events that are unusual and infrequent that are outside management's control while a special item is a significant transaction that is unusual or infrequent but within management's control. 
A)  Extraordinary items are significant transactions or events that are unusual or infrequent while a special item is a significant transaction that is unusual and infrequent but within management's control. 
B)  Extraordinary items are significant transactions or events that are unusual and infrequent which are outside management's control while a special item is a significant transaction that is unusual and infrequent but within management's control. 
C)  Extraordinary items are significant transactions or events that are unusual and infrequent which are within management's control while a special item is a significant transaction that is unusual or infrequent but within management's control. 
D)  Extraordinary items are significant transactions or events that are unusual and infrequent that are outside management's control while a special item is a significant transaction that is unusual or infrequent but within management's control.

Question 14

Special revenue funds are not used if the fund resources are required to be used to acquire capital assets or for the payment of interest and principal on long-term debt.

Accepted Answer

A) True 
 B)False

Question 15

Debt service expenditures for interest are:

Accepted Answer

A)  Accrued. 
B)  Recorded when due but may be accrued at year end if the debt service due date is less than 30 days after year end. 
C)  Recorded when due but may be accrued at year end if the debt service due date is less than 60 days after year. 
D)  Reported only in the government-wide statements. 
A)  Accrued. 
B)  Recorded when due but may be accrued at year end if the debt service due date is less than 30 days after year end. 
C)  Recorded when due but may be accrued at year end if the debt service due date is less than 60 days after year. 
D)  Reported only in the government-wide statements.

Question 16

A donor pledged $200,000 to the fund raising drive of a local government to assist its police officers in obtaining the latest technology. The pledge was made on July 16, 2016, but was conditioned on the government raising an additional $200,000 from other donors. By the fiscal year-end of June 30, 2017, the local government had raised only $5,000 from other donors. What entry would be made for the initial pledge by the local government during the year ended June 30, 2017?

Accepted Answer

A)  No entry is required until the condition is fully met. 
B)  Debit a receivable and credit deferred inflows. 
C)  Debit a receivable and credit Fund Balance. 
D)  Debit a receivable and credit revenue 
A)  No entry is required until the condition is fully met. 
B)  Debit a receivable and credit deferred inflows. 
C)  Debit a receivable and credit Fund Balance. 
D)  Debit a receivable and credit revenue

Question 17

The Debt Service Fund would record the receipt of money from the General Fund as nonoperating revenue on the activities Statement of Revenues, Expenditures, and Changes in Fund Balance.

Accepted Answer

A) True 
 B)False

Question 18

What is false regarding the two methods for recording inventories in governmental funds?

Accepted Answer

A)  The consumption method debits inventory when purchased and charges expenditures for the amount consumed. 
B)  The purchases method debits expenditures when inventories are purchased and adjusts the inventory balance at year end. 
C)  The amount of expenditure reported at year end will differ from method to method. 
D)  The purchases method is preferable since it requires no adjustment to supplies expense when preparing the government-wide statements. 
A)  The consumption method debits inventory when purchased and charges expenditures for the amount consumed. 
B)  The purchases method debits expenditures when inventories are purchased and adjusts the inventory balance at year end. 
C)  The amount of expenditure reported at year end will differ from method to method. 
D)  The purchases method is preferable since it requires no adjustment to supplies expense when preparing the government-wide statements.

Question 19

What is the effect on the General Fund's fund balance when capital assets are purchased during a year from General Fund revenues?

Accepted Answer

A)  Fund balance is increased. 
B)  Fund balance is decreased. 
C)  There is no effect, since one asset cash is replaced by another capital asset. 
D)  None of the above, capital assets must be purchased through a capital projects fund. 
A)  Fund balance is increased. 
B)  Fund balance is decreased. 
C)  There is no effect, since one asset cash is replaced by another capital asset. 
D)  None of the above, capital assets must be purchased through a capital projects fund.

Question 20

The journal entry to record the prior year's deferred Inflows: property taxes those expected to be collected more than 60 days beyond year-end as revenue in the current year would include:

Accepted Answer

A)  A debit to Revenues Control 
B)  A debit to Deferred Inflows: Property Taxes 
C)  A credit to Revenues Control 
D)  B and C would both be included in the journal entry 
A)  A debit to Revenues Control 
B)  A debit to Deferred Inflows: Property Taxes 
C)  A credit to Revenues Control 
D)  B and C would both be included in the journal entry

Receivables from sales taxes are recorded in the period that the retailer submits the taxes to the government.

Indicate which of the following use Modified Accrual Accounting? Government- wide Interna Capital Financial Special Revenue Service A) No Yes No Yes B) Yes No Yes No C) Yes No Yes Yes D) Yes Yes No No

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

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

Although a government may use resources to supplement a special revenue fund, assignment of resources is not sufficient for the establishment of a special revenue fund.

When establishing funds, governments should never attempt to minimize the number of special revenue and other funds, instead using functional classification to record transaction detail.

Under the purchases method to account for supplies inventory, an asset is recorded when inventories are acquired, and the expenditure is recorded when the supplies are consumed.

Which of the following is correct with respect to accounting for supplies inventories in a governmental fund?

Which of the following accounts in the General Fund is credited when a purchase order is approved?

What is the difference between an extraordinary item and special item according to GASB?

Special revenue funds are not used if the fund resources are required to be used to acquire capital assets or for the payment of interest and principal on long-term debt.

Debt service expenditures for interest are:

The Debt Service Fund would record the receipt of money from the General Fund as nonoperating revenue on the activities Statement of Revenues, Expenditures, and Changes in Fund Balance.

What is false regarding the two methods for recording inventories in governmental funds?

What is the effect on the General Fund's fund balance when capital assets are purchased during a year from General Fund revenues?

The journal entry to record the prior year's deferred Inflows: property taxes those expected to be collected more than 60 days beyond year-end as revenue in the current year would include:

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 Funds, Interfund Transactions

Government-Wide Statements: Capital Assets; Long-Term Debt

Advanced Topics for State and Local Governments

Accounting for Private Not-For-Profit Organizations

College and University Accounting

Accounting for Hospitals and Other Health Care Providers

Auditing, Tax-exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters

Exam 4: Accounting for the General and Special Revenue Funds

Receivables from sales taxes are recorded in the period that the retailer submits the taxes to the government.

Indicate which of the following use Modified Accrual Accounting? Government- wide Interna Capital Financial Special Revenue Service A) No Yes No Yes B) Yes No Yes No C) Yes No Yes Yes D) Yes Yes No No

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

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

Although a government may use resources to supplement a special revenue fund, assignment of resources is not sufficient for the establishment of a special revenue fund.

When establishing funds, governments should never attempt to minimize the number of special revenue and other funds, instead using functional classification to record transaction detail.

Under the purchases method to account for supplies inventory, an asset is recorded when inventories are acquired, and the expenditure is recorded when the supplies are consumed.

Which of the following is correct with respect to accounting for supplies inventories in a governmental fund?

Which of the following accounts in the General Fund is credited when a purchase order is approved?

What is the difference between an extraordinary item and special item according to GASB?

Special revenue funds are not used if the fund resources are required to be used to acquire capital assets or for the payment of interest and principal on long-term debt.

Debt service expenditures for interest are:

The Debt Service Fund would record the receipt of money from the General Fund as nonoperating revenue on the activities Statement of Revenues, Expenditures, and Changes in Fund Balance.

What is false regarding the two methods for recording inventories in governmental funds?

What is the effect on the General Fund's fund balance when capital assets are purchased during a year from General Fund revenues?

The journal entry to record the prior year's deferred Inflows: property taxes those expected to be collected more than 60 days beyond year-end as revenue in the current year would include:

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 Funds, Interfund Transactions

Government-Wide Statements: Capital Assets; Long-Term Debt

Advanced Topics for State and Local Governments

Accounting for Private Not-For-Profit Organizations

College and University Accounting

Accounting for Hospitals and Other Health Care Providers

Auditing, Tax-exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters