Question 1

Which of the following are government-wide statements?

Accepted Answer

A)  Statement of Net Assets 
B)  Statement of Cash Flows 
C)  Statement of Revenues, Expenses and Changes in Fund Net Assets 
D)  Both A and C

Question 2

A government reported another financing source in the amount of $500,000 related to the sale of land in its governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances. The land had a cost of $100,000. The adjustment in the reconciliation when moving from the changes in fund balances in the Statement of Revenues, Expenditures and Changes in Fund Balances to the change in net assets in the Statement of Activities would be:

Accepted Answer

A)  Increase of $400,000 
B)  Decrease of $400,000 
C)  Increase of $100,000 
D)  Decrease of $100,000

Question 3

The City of Henderson reported a change in fund balances of $1,001,000 in its governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances for the year ended December 31, 2009. In addition, the following information is relevant: 
A. Capital outlay expenditures amounted to $6,500,000 in the modified accrual statement. General government fixed assets amounted to $90,000,000, excluding land and had an average life of 20 years.
B. The modified accrual statement reported proceeds from the sale of land in the amount of $500,000. The land had a basis of $375,000.
C. Property taxes had been levied in the amount of $10,000,000. It was estimated that 3% would never be collected, that $500,000 would be collected within 60 days of year-end and that $200,000 would be collected more than 60 days from year-end. The City had recognized the maximum permitted under modified accrual accounting.
D. $185,000 of property taxes had been deferred at the end of the previous year and was recognized under modified accrual as revenue in the current year.
E. The modified accrual statement reflected debt service expenditures in the amount of $500,000 for interest and $800,000 for principal. No adjustment was necessary for interest accruals at year-end.
F. Compensated absences charges, on the full accrual basis, amounted to $60,000 more than under the modified accrual basis.
Required: Prepare a reconciliation from the change in fund balances reported above to the change in net assets in the governmental column in the government-wide Statement of Activities for the year ended December 31, 2009.

Accepted Answer

The answer of The City of Henderson reported a change...

Question 4

Fixed assets are not recorded on the governmental fund balance sheets but must be shown on the government-wide financial statements.

Accepted Answer

A) True 
 B)False

Question 5

When converting fund financial records to government-wide financial statements, worksheet entries are made to eliminate all of the following accounts expect:

Accepted Answer

A)  Capital Expenditures 
B)  Bond Proceeds 
C)  Principal Repayment 
D)  Premium on Bonds Payable

Question 6

________ to be incorporated in the government-wide statements.

Accepted Answer

A)  Accrual basis, modified accrual basis 
B)  Accrual basis, tax basis 
C)  Modified accrual basis, accrual basis 
D)  Cash basis, accrual basis

Question 7

When converting from the enterprise funds Statement of Net Assets to the government-wide Statement of Net Assets (government-wide statements), it is necessary to add fixed assets and to deduct long-term debt.

Accepted Answer

A) True 
 B)False

Question 8

Worksheet entries are never booked; they are only used on the worksheets.

Accepted Answer

A) True 
 B)False

Question 9

On April 1, 2009, a local government issued bonds in the amount of $2,000,000. The bonds were issued at par and carried an interest rate of 6%, payable October 1 and April 1. When moving from the change in fund balances in the governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances to the change in net Assets in the governmental funds column of the Statement of Activities, both for the fiscal year ended June 30, 2009, the effect for the interest accrual only would be:

Accepted Answer

A)  An increase of $60,000 
B)  A decrease of $60,000 
C)  A decrease of $30,000 
D)  No change

Question 10

The City of Franklin, a general purpose government, reported fund balances in the amount of $24,100,000 in the governmental funds balance sheet dated December 31, 2009. In addition, the following information is relevant:
A. General government fixed assets amounted to $35,000,000. Accumulated depreciation of those fixed assets amounted to $18,000,000.
B. General long-term liabilities of the government amounted to $ 6,000,000.
C. Property taxes, which should be recognized as receivables in the government-wide statements, amounted to $3,000,000. Property taxes recognized as receivables in the governmental funds balance sheet amounted to $2,000,000; the remainder had been deferred, in accord with modified accrual accounting
D. Internal service funds net assets amounted to $5,000,000. These were reported in the proprietary funds balance sheet.
E. Liabilities, in addition to the amount reported in the governmental funds balance sheet included: (1) accrued interest payable, $300,000; (2) compensated absences payable, $4,500,000.
Required: Prepare a reconciliation from the fund balances recognized in the governmental funds balance sheet to the net assets recognized in the governmental funds column of the government-wide statement of net assets.

Accepted Answer

The answer of The City of Franklin, a general purpose...

Question 11

The difference between assets and liabilities in the government-wide statements is called net equity.

Accepted Answer

A) True 
 B)False

Question 12

Governments must capitalize infrastructure assets with the inception of GASB Statement 34.

Accepted Answer

A) True 
 B)False

Question 13

The reconciliation(s) that are required to be presented on the face of the governmental fund financial statements or in separate schedule immediately after the fund financial statements include:

Accepted Answer

A)  Reconciliation from the governmental fund Balance Sheet to the Statement of Net Assets 
B)  Reconciliation from the governmental fund Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities 
C)  Both A & B 
D)  No reconciliations are required to be submitted

Question 14

The following information is available for the preparation of the government-wide financial statements for the City of Fishersville for the year ended June 30, 2009:
 \(\begin{array}{lr}
\text { Expenses: }\
\text { General government } & \$ 11,000,000 \
\text { Public safety } & 22,000,000 \
\text { Public works } & 12,000,000 \
\text { Health and sanitation } & 6,000,000 \
\text { Culture and recreation } & 4,500,000 \
\text { Interest on long-term debt, governmental type } & 600,000 \
\text { Water and sewer system } & 12,000,000 \
\text { Parking system } & 500,000\
\
\text { Revenues: }\
 \text { Charges for services, general government } & 2,000,000 \
\text { Charges for services, public safety } & 200,000 \
\text { Operating grant, public safety } & 700,000 \
\text { Operating grant, health and sanitation } & 1,400,000 \
\text { Charges for services, culture and recreation } & 2,000,000 \
\text { Charges for services, water and sewer } & 13,000,000 \
\text { Charges for services, parking system } & 400,000 \
\text { Property taxes } & 30,000,000 \
\text { Sales taxes } & 21,000,000 \
\text { Investment earnings, business-type } & 300,000\
\
\text { Other Financing Sources (Uses): }\
\text { Special item-gain on sale of unused land, governmental type } & 1,000,000 \
\text { Transfers In (from governmental funds) } & 1,700,000 \
\text { Transfer Out (to governmental funds) } & (1,000,000) \
\text { Net assets, July 1, 2008, governmental activities } & 13,000,000 \
 \text { Net assets, July 1, 2008, business-type activities } & 22,000,000
\end{array}\) Required: From the information given above, prepare, in good form, a Statement of Activities for the City of Fishersville for the year ended June 30, 2009. Fishersville has no component units.

Accepted Answer

The answer of The following information is available for the...

Question 15

What amount of property tax revenue would be reported in its General Fund Statement of Revenues, Expenditures and Changes in Fund Balances for the year ended December 31, 2009? (ignore the effect of collection of any taxes levied prior to 2009)

Accepted Answer

A)  $8,900,000 
B)  $9,400,000 
C)  $9,600,000 
D)  $9,700,000

Question 16

The difference between the amount of debt limit calculated as prescribed by law and the net amount of outstanding indebtedness subject to limitation is known as:

Accepted Answer

A)  Debt Limit 
B)  Debt Margin 
C)  Long-Term Debt 
D)  General Long-Term Debt

Question 17

The following balances exist at year end within the governmental activities of a government unit: Transfers In: 100,000
Transfers Out: 80,000
When compiling the government-wide financial statements, the journal entry to eliminate the transfer activity will include:

Accepted Answer

A)  A debit of 20,000 to Transfers In 
B)  A debit of 80,000 to Transfers In 
C)  A debit of 80,000 to Transfers Out 
D)  None of the above

Question 18

Few adjustments to internal service funds are necessary when converting from proprietary funds statements to the government-wide statements as internal service funds are generally reported as business-type activities in the government-wide statements.

Accepted Answer

A) True 
 B)False

Question 19

What amount would be reported in the government-wide Statement of Activities for the year ended December 31, 2009? (ignore the effect of collection of any taxes levied prior to 2009)

Accepted Answer

A)  $8,900,000 
B)  $9,400,000 
C)  $9,600,000 
D)  $9,700,000

Question 20

Debt limit is the amount of funds legally required to be set aside to pay outstanding debt.

Accepted Answer

A) True 
 B)False

Exam 8: Government-Wide Statements, Capital Assets, Long-Term Debt

Which of the following are government-wide statements?

Fixed assets are not recorded on the governmental fund balance sheets but must be shown on the government-wide financial statements.

When converting fund financial records to government-wide financial statements, worksheet entries are made to eliminate all of the following accounts expect:

________ to be incorporated in the government-wide statements.

When converting from the enterprise funds Statement of Net Assets to the government-wide Statement of Net Assets (government-wide statements), it is necessary to add fixed assets and to deduct long-term debt.

Worksheet entries are never booked; they are only used on the worksheets.

The difference between assets and liabilities in the government-wide statements is called net equity.

Governments must capitalize infrastructure assets with the inception of GASB Statement 34.

The reconciliation(s) that are required to be presented on the face of the governmental fund financial statements or in separate schedule immediately after the fund financial statements include:

What amount of property tax revenue would be reported in its General Fund Statement of Revenues, Expenditures and Changes in Fund Balances for the year ended December 31, 2009? (ignore the effect of collection of any taxes levied prior to 2009)

The difference between the amount of debt limit calculated as prescribed by law and the net amount of outstanding indebtedness subject to limitation is known as:

The following balances exist at year end within the governmental activities of a government unit: Transfers In: 100,000 Transfers Out: 80,000 When compiling the government-wide financial statements, the journal entry to eliminate the transfer activity will include:

Few adjustments to internal service funds are necessary when converting from proprietary funds statements to the government-wide statements as internal service funds are generally reported as business-type activities in the government-wide statements.

What amount would be reported in the government-wide Statement of Activities for the year ended December 31, 2009? (ignore the effect of collection of any taxes levied prior to 2009)

Debt limit is the amount of funds legally required to be set aside to pay outstanding debt.