Question 1

GASB requires a reconciliation between the amount shown as GAAP expenditures in the basic financial statements and the amount shown in the budgetary comparison schedule.

Accepted Answer

A) True 
 B)False

Question 2

Revenues of governmental fund types should be recognized when:

Accepted Answer

A)  Collected in cash 
B)  Authorized by the budget ordinance 
C)  Taxes become delinquent 
D)  Measurable and available

Question 3

Which of the following items would typically not need an encumbrance?

Accepted Answer

A)  New Building 
B)  Regular Salaries 
C)  New Computer 
D)  Office Equipment

Question 4

A classification of appropriations and expenditures that deals with the time period involved and includes current expenditures, capital outlays and debt service is:

Accepted Answer

A)  Object 
B)  Activities 
C)  Character 
D)  Function

Question 5

The Fire Department of a certain city received an appropriation in the amount of $12,000,000 for the fiscal year ended December 31, 2009. During the month ended January 31, 2009, the following transactions occurred: (a) purchase orders were issued in the amount of $400,000; (b) purchase orders, related to (a) above, were filled in the amount of $370,000; the related invoice amount was $368,000; invoices were paid in the amount of $350,000; (c) salaries were accrued and paid in the amount of $580,000; (d) the appropriation was increased in amount of $10,000. The amount available for the Fire Department as of January 31, 2009 would be:

Accepted Answer

A)  $10,682,000 
B)  $11,002,000 
C)  $11,032,000 
D)  $11,036,000

Question 6

All of the following are commonly used major revenue source classes except for

Accepted Answer

A)  Taxes 
B)  Intergovernmental revenues 
C)  Fines and Forfeits 
D)  Transfers from other funds

Question 7

Assume encumbrances do not expire at year-end. $15,000 was encumbered during the prior year for a computer and the actual cost of the computer in the current year is $12,000. How does this affect unreserved fund balance?

Accepted Answer

A)  Previous Year: increase 15,000; Current Year: decrease 12,000 
B)  Previous Year: decrease 15,000; Current Year: increase 3,000 
C)  Previous Year: no effect; Current Year: decrease 12,000 
D)  Previous Year: decrease 15,000; Current Year: decrease 12,000

Question 8

What is the first step a government takes in acquiring goods or services through the General Fund?

Accepted Answer

A)  Appropriation 
B)  Expenditure 
C)  Requisition order 
D)  Encumbrance

Question 9

Modified accrual accounting records encumbrances when goods are ordered and accrual accounting only records a liability only when goods are received.

Accepted Answer

A) True 
 B)False

Question 10

Encumbrances are recorded when a purchase order is filled or a contract is executed.

Accepted Answer

A) True 
 B)False

Question 11

To record the budget for the General Fund

Accepted Answer

A)  Estimated Revenue Control is Debited 
B)  Expenditure Control is Debited 
C)  Appropriations Control is Debited 
D)  Revenue Control is Debited

Question 12

An example of expenditure classification by object would be:

Accepted Answer

A)  Current 
B)  Public safety 
C)  Police department 
D)  Salaries

Question 13

Revenues are raised to finance governmental activities, but revenues may be expended only for purposes and in amounts approved by the legislative branch in compliance with laws of competent jurisdictions, which is known as the

Accepted Answer

A)  Budgetary Fund 
B)  Encumbered Process 
C)  Expended Process 
D)  Appropriations Process

Question 14

The Police Department of a given city received an appropriation in the amount of $12,000,000 for the fiscal year ended June 30, 2009. During the month ended July 31, 2008, the following transactions occurred: (a) purchase orders were issued in the amount of $500,000; (b) purchase orders, related to (a) above, were filled in the amount of $460,000; the related invoice amount was $463,000; invoices were paid in the amount of $450,000; (c) salaries were accrued and paid in the amount of $480,000. The balance available for the police department as of July 31, 2008 is:

Accepted Answer

A)  $11,000,000 
B)  $11,007,000 
C)  $11,010,000 
D)  $11,017,000

Question 15

At what point would the general fund account "reserve for encumbrances" be debited?

Accepted Answer

A)  When an item is ordered by the government 
B)  When an authorized liability is incurred (government receives item) 
C)  When cash is paid to the vendor 
D)  (
A)  or (
B)  depending on authorized appropriations

Question 16

Reserve for Encumbrances (current year) in excess of a balance of Encumbrances Control indicates:

Accepted Answer

A)  An excess of Vouchers Payable over Encumbrances Control 
B)  An excess of purchase orders released over invoices received 
C)  An excess of invoices received over purchase orders released 
D)  A recording error

Question 17

The Jacksonville city government approved the budget for the fiscal year ending December 31, 2009. This includes estimated revenues of $2,750,000. The journal entry to record this would be:

Accepted Answer

A)  DR Estimated Revenues Control…………………….. 2,750,000 
B)  CR Budgetary Fund Balance…………………………………..2,750,000 
C)  DR Budgetary Fund Balance…………………………. 2,750,000 
D)  CR Revenues…………………………………………………..2, 750,000 
E)  DR Estimated Revenues Control……………………… 2,750,000
F) CR Appropriations Control……………………………………2,750,000
G) DR Estimated Other Financing Sources………………. 2,750,000
H) CR Budgetary Fund Balance…………………………………...2,750,000

Question 18

Classifications by function includes all of the following except

Accepted Answer

A)  Debt Service 
B)  General Government 
C)  Public Safety 
D)  Highways & Streets

Question 19

Revenues for governmental funds, should be recognized when measurable and available for expenditure in the current period.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is a decrease in fund financial resources other than through interfund transfers?

Accepted Answer

A)  Expenditure 
B)  Expense 
C)  Encumbrance 
D)  Liability

Exam 3: Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

GASB requires a reconciliation between the amount shown as GAAP expenditures in the basic financial statements and the amount shown in the budgetary comparison schedule.

Revenues of governmental fund types should be recognized when:

Which of the following items would typically not need an encumbrance?

A classification of appropriations and expenditures that deals with the time period involved and includes current expenditures, capital outlays and debt service is:

All of the following are commonly used major revenue source classes except for

Assume encumbrances do not expire at year-end. $15,000 was encumbered during the prior year for a computer and the actual cost of the computer in the current year is $12,000. How does this affect unreserved fund balance?

What is the first step a government takes in acquiring goods or services through the General Fund?

Modified accrual accounting records encumbrances when goods are ordered and accrual accounting only records a liability only when goods are received.

Encumbrances are recorded when a purchase order is filled or a contract is executed.

To record the budget for the General Fund

An example of expenditure classification by object would be:

Revenues are raised to finance governmental activities, but revenues may be expended only for purposes and in amounts approved by the legislative branch in compliance with laws of competent jurisdictions, which is known as the

At what point would the general fund account "reserve for encumbrances" be debited?

Reserve for Encumbrances (current year) in excess of a balance of Encumbrances Control indicates:

The Jacksonville city government approved the budget for the fiscal year ending December 31, 2009. This includes estimated revenues of $2,750,000. The journal entry to record this would be:

Classifications by function includes all of the following except

Revenues for governmental funds, should be recognized when measurable and available for expenditure in the current period.

Which of the following is a decrease in fund financial resources other than through interfund transfers?