Question 1

Ideally,under the accrual basis of accounting,license fees,permits,and other miscellaneous revenue should be recognized

Accepted Answer

A) when cash is received. 
B) when the exchange takes place. 
C) over the period during which the government obtains an enforceable legal claim. 
D) when related expenditures are incurred. 
A) when cash is received. 
B) when the exchange takes place. 
C) over the period during which the government obtains an enforceable legal claim. 
D) when related expenditures are incurred. B

Question 2

Under the accrual basis of accounting,imposed nonexchange revenues such as fines)should be recognized

Accepted Answer

A) when assessed. 
B) when the government has an enforceable legal claim. 
C) when collected. 
D) when the government has an enforceable legal claim and when collected within the current period or soon enough thereafter to be used to pay the liabilities of the current period 
A) when assessed. 
B) when the government has an enforceable legal claim. 
C) when collected. 
D) when the government has an enforceable legal claim and when collected within the current period or soon enough thereafter to be used to pay the liabilities of the current period B

Question 3

A city that has a 12/31 fiscal year end has adopted a policy of recognizing property tax revenue consistent with the 60-day rule allowable period under GAAP.Property taxes of $600,000 of which none are estimated to be uncollectible)are levied in October 2013 to finance the activities of fiscal year 2014.Property taxes are due in two installments June 20 and December 20.Cash collections related to property taxes are as follows: $\begin{array}{rll}
1 / 15 / 14 & \text { for property taxes levied in } 2012 \text {, due in } 2013 & \$ 25,000 \
2 / 15 / 14 & \text { for property taxes levied in } 2012 \text {, due in } 2013 & \$ 15,000 \
3 / 15 / 14 & \text { for property taxes levied in 2012, due in } 2013 & \$ 10,000 \
6 / 20 / 12 & \text { First installment of taxes levied in } 2013, \text { due } 6 / 20 / 14 & \$ 350,000 \
12 / 20 / 14 & \text { Second installment of taxes levied in } 2013 \text {, due } 12 / 20 / 14 & \$ 150,000 \
1 / 15 / 15 & \text { for property taxes levied in 201, due in } 2014 & \$ 15,000 \
2 / 15 / 15 & \text { for property taxes levied in } 2013 \text {, due in } 2014 & \$ 10,000 \
3 / 15 / 12 & \text { for property taxes levied in } 2013 \text {, due in } 2014 & \$ 5,000
\end{array}$ The total amount of property tax revenue that will be recognized in the government-wide financial statements in 2014 is:

Accepted Answer

A) $600,000. 
B) $575,000. 
C) $535,000. 
D) $525,000. 
A) $600,000. 
B) $575,000. 
C) $535,000. 
D) $525,000. A

Question 4

During 2014,the city issued $300 in fines for failure to keep real property in 'acceptable' condition.During that period the city spent $200 to mow and clean up the unoccupied properties for which the fines were assessed.The city estimates that $30 of the fines issued in 2014 will be uncollectible.During 2014 the city collected $230 related to 2014 fines and $20 related to 2013 fines.The amount of revenue that the city should recognize in its 2014 governmental fund financial statements related to fines is

Accepted Answer

A) $230. 
B) $250. 
C) $270. 
D) $300. 
A) $230. 
B) $250. 
C) $270. 
D) $300.

Question 5

During 2014,a state has the following cash collections related to state income taxes $\begin{array}{ll}
 \text { Payroll withholdings and estimated payments related to 2014 income } &\$ 360 \
 \text {4 / 15 / 14   Balance of 2013 net of   \$ 10   refunds) income taxes  } &\$ 40 \
 \text {1 / 15 / 15   payroll withholdings and estimated payments related to 2014 income  } &\$ 30 \
 \text { 2 / 15 / 15   payroll withholdings and estimated payments related to 2014 income } &\$ 35 \
 \text {  3 / 15 / 15   payroll withholdings and estimated payments related to 2015 income} &\$ 25 \
 \text { 4 / 15 / 15 Balnce of 2014 net of   \$ 5   refunds) income taxes } &\$ 45 \
\end{array}$ Assuming that the state defines "available" as the maximum period allowable for property taxes,what is the amount of revenue that will be recognized in the 2014 governmental fund financial statements related to state income taxes?

Accepted Answer

A) $400. 
B) $405. 
C) $430. 
D) $465. 
A) $400. 
B) $405. 
C) $430. 
D) $465.

Question 6

A government is the recipient of a bequest of a multi-story office building that the government intends to sell to support program activities.The building has a historical cost of $850,000,a book value in the hands of the benefactor of $700,000,and a fair value of $1,050,000.The city had not yet begun to try to sell the building when its annual financial statements were issued.The city should recognize on its governmental fund financial statements,donations revenue of

Accepted Answer

A) $-0-. 
B) $700,000. 
C) $850,000. 
D) $1,050,000. 
A) $-0-. 
B) $700,000. 
C) $850,000. 
D) $1,050,000.

Question 7

At the beginning of its fiscal year,a local government owned an investment with a historical cost of $85 and a fair value of $95.During the year,dividends of $2 were received.At the end of the year,the investment had a fair value of $100.The amount that should be recognized on the governmental fund financial statements for the year as investment income is

Accepted Answer

A) $-0-. 
B) $7. 
C) $15. 
D) $17. 
A) $-0-. 
B) $7. 
C) $15. 
D) $17.

Question 8

Income taxes are classified as ad valorem taxes.

Accepted Answer

A) True 
 B)False

Question 9

A city that has a 12/31 fiscal year end has adopted a policy of recognizing the maximum amount of property tax revenue allowable under GAAP.Property taxes of $720,000 of which 10 percent are estimated to be uncollectible)are levied in October 2013 to finance the activities of the fiscal year 2014.During 2014,cash collections related to property taxes levied in October 2013 were $600,000.In 2015 the following amounts related to the property taxes levied in October 2013 were collected: January $30,000;March,$6,000.For the fiscal year ended 12/31/14,what amount should be recognized as property tax revenues related to the 2013 levy on the governmental fund financial statements?

Accepted Answer

A) $720,000. 
B) $648,000. 
C) $630,000. 
D) $600,000. 
A) $720,000. 
B) $648,000. 
C) $630,000. 
D) $600,000.

Question 10

State governments should recognize food stamp revenue

Accepted Answer

A) when they receive the food stamps. 
B) when food stamps are distributed by the state to eligible recipients. 
C) when the recipient uses the food stamps 
D) never.Food stamps are not financial resources. 
A) when they receive the food stamps. 
B) when food stamps are distributed by the state to eligible recipients. 
C) when the recipient uses the food stamps 
D) never.Food stamps are not financial resources.

Question 11

A city that has a 12/31 fiscal year end has adopted a policy of recognizing property tax revenue consistent with the 60-day rule allowable period under GAAP.Property taxes of $600,000 of which none are estimated to be uncollectible)are levied in October 2013 to finance the activities of fiscal year 2014.Property taxes are due in two installments June 20 and December 20.Cash collections related to property taxes are as follows: $\begin{array}{rcc}
1 / 15 / 14 & \text { for property taxes levied in } 2012 \text {, due in } 2013 & \$ 25,000 \
2 / 15 / 14 & \text { for property taxes levied in } 2012 \text {, due in } 2013 & \$ 15,000 \
3 / 15 / 14 & \text { for property taxes levied in 2012, due in 2013 } & \$ 10,000 \
6 / 20 / 14 & \text { First installment of taxes levied in } 2013 \text {, due } 6 / 20 / 14 & \$ 350,000 \
12 / 20 / 14 & \text { Second installment of taxes levied in } 2013 \text {, due } 12 / 20 / 14 & \$ 150,000 \
1 / 15 / 15 & \text { for property taxes levied in 2013, due in 2014 } & \$ 15,000 \
2 / 15 / 15 & \text { for property taxes levied in 20130, due in } 2014 & \$ 10,000 \
3 / 15 / 15 & \text { for property taxes levied in } 2013 \text {, due in } 2014 & \$ 5,000
\end{array}$ The total amount of property tax revenue that should be recognized in the governmental fund financial statements in 2014 is:

Accepted Answer

A) $600,000. 
B) $575,000. 
C) $535,000. 
D) $525,000. 
A) $600,000. 
B) $575,000. 
C) $535,000. 
D) $525,000.

Question 12

Under GAAP,income tax revenues should be recognized in the government-wide financial statements in the accounting period

Accepted Answer

A) when collected in cash by the taxing authority. 
B) in which the underlying income was earned,regardless of when collected. 
C) in which the underlying income was earned,if collected in the current period or soon enough thereafter to pay liabilities of the current period. 
D) when earned. 
A) when collected in cash by the taxing authority. 
B) in which the underlying income was earned,regardless of when collected. 
C) in which the underlying income was earned,if collected in the current period or soon enough thereafter to pay liabilities of the current period. 
D) when earned.

Question 13

Revenues that cannot be classified as general revenues are by default considered program revenues.

Accepted Answer

A) True 
 B)False

Question 14

Under GAAP,income tax revenues should be recognized in the governmental fund financial statements in the accounting period

Accepted Answer

A) when collected in cash by the taxing authority. 
B) in which the underlying income was earned,regardless of when collected. 
C) in which the underlying income was earned,if collected in the current period or soon enough thereafter to pay liabilities of the current period. 
D) when earned. 
A) when collected in cash by the taxing authority. 
B) in which the underlying income was earned,regardless of when collected. 
C) in which the underlying income was earned,if collected in the current period or soon enough thereafter to pay liabilities of the current period. 
D) when earned.

Question 15

Last year a city received notice of a $150,000 grant from the state to purchase vehicles to transport physically challenged individuals.During the current year the city received the entire $150,000,purchased a bus for $65,000,and issued a purchase order for a van for $60,000.The grant revenue that the city should recognize on the government-wide financial statements in the current year is

Accepted Answer

A) $-0-. 
B) $ 65,000. 
C) $125,000. 
D) $150,000. 
A) $-0-. 
B) $ 65,000. 
C) $125,000. 
D) $150,000.

Question 16

Under the modified accrual basis of accounting,the amount of property tax revenues that should be recognized by a government in the current year related to the current-year levy will be

Accepted Answer

A) the total amount of the levy. 
B) the expected collectible portion of the levy. 
C) the portion of the levy collected. 
D) the portion of the levy collected in the current year or within sixty days after the end of the fiscal period. 
A) the total amount of the levy. 
B) the expected collectible portion of the levy. 
C) the portion of the levy collected. 
D) the portion of the levy collected in the current year or within sixty days after the end of the fiscal period.

Question 17

Taxes that are imposed on the reporting government's citizens are considered general revenues,even if they are restricted to specific programs.

Accepted Answer

A) True 
 B)False

Question 18

A city levies a 2 percent sales tax that is collected for them by the state.Sales taxes must be remitted by the merchants to the state by the twentieth day of the month following the month in which the sale occurred.The state has a policy of remitting sales taxes to the city within 30 days of collection by the state.Cash received by the state related to sales taxes is as follows: $\begin{array}{ll}
 \text {Amount received   1 / 20 / 14  , applicable to December 2013 sales  } &\$ 100 \
 \text { Amount received 2/20/14, applicable to January 2014 sales } &\$ 30 \
 \text { Amount received 3/20/14, applicable to February 2014 sales } &\$ 20 \
 \text { Amount received during 2014 related to March-November 2014 sales } &\$ 380 \
 \text { Amount received   1 / 20 / 15   for December 2014 sales } &\$ 110 \
 \text { Amount received   2 / 20 / 15   for January 2015 } &\$ 40 \
 \text {Amount received   3 / 20 / 15   for February 2015  } &\$ 10
\end{array}$ Assuming the city uses the same period to define "available" as the maximum period allowable for property taxes,what amount should it recognize as sales tax revenue in its government-wide financial statements for the fiscal year ended 12/31/14?

Accepted Answer

A) $430. 
B) $530. 
C) $540. 
D) $550. 
A) $430. 
B) $530. 
C) $540. 
D) $550.

Question 19

Under the modified accrual basis of accounting,investment revenues for the current period should include

Accepted Answer

A) only interest and dividends received. 
B) all interest and dividends received during the period plus all accruals of interest and dividends earned. 
C) all interest and dividends received plus gains and losses on securities that were sold during the period. 
D) all interest and dividends received,all gains and losses on securities sold,and all changes in market values on securities held in the portfolio at year-end. 
A) only interest and dividends received. 
B) all interest and dividends received during the period plus all accruals of interest and dividends earned. 
C) all interest and dividends received plus gains and losses on securities that were sold during the period. 
D) all interest and dividends received,all gains and losses on securities sold,and all changes in market values on securities held in the portfolio at year-end.

Question 20

Under the modified accrual basis,revenues are "available" if they are collected within the current period or are expected to be collected soon enough after the end of the period to be used to pay liabilities of the current period.

Accepted Answer

A) True 
 B)False

Ideally,under the accrual basis of accounting,license fees,permits,and other miscellaneous revenue should be recognized

Under the accrual basis of accounting,imposed nonexchange revenues such as fines)should be recognized

Income taxes are classified as ad valorem taxes.

State governments should recognize food stamp revenue

Under GAAP,income tax revenues should be recognized in the government-wide financial statements in the accounting period

Revenues that cannot be classified as general revenues are by default considered program revenues.

Under GAAP,income tax revenues should be recognized in the governmental fund financial statements in the accounting period

Under the modified accrual basis of accounting,the amount of property tax revenues that should be recognized by a government in the current year related to the current-year levy will be

Taxes that are imposed on the reporting government's citizens are considered general revenues,even if they are restricted to specific programs.

Under the modified accrual basis of accounting,investment revenues for the current period should include

Under the modified accrual basis,revenues are "available" if they are collected within the current period or are expected to be collected soon enough after the end of the period to be used to pay liabilities of the current period.

The Government and Not-For-Profit Environment

Fund Accounting

Issues of Budgeting and Control

Recognizing Expenditures in Governmental Funds

Accounting for Capital Projects and Debt Service

Capital Assets and Investments in Marketable Securities

Long-Term Obligations

Business-Type Activities

Fiduciary Funds and Permanent Funds

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Not-For-Profit Organizations

Federal Government Accounting

Filters

Exam 4: Recognizing Revenues in Governmental Funds

Ideally,under the accrual basis of accounting,license fees,permits,and other miscellaneous revenue should be recognized

Under the accrual basis of accounting,imposed nonexchange revenues such as fines)should be recognized

Income taxes are classified as ad valorem taxes.

State governments should recognize food stamp revenue

Under GAAP,income tax revenues should be recognized in the government-wide financial statements in the accounting period

Revenues that cannot be classified as general revenues are by default considered program revenues.

Under GAAP,income tax revenues should be recognized in the governmental fund financial statements in the accounting period

Under the modified accrual basis of accounting,the amount of property tax revenues that should be recognized by a government in the current year related to the current-year levy will be

Taxes that are imposed on the reporting government's citizens are considered general revenues,even if they are restricted to specific programs.

Under the modified accrual basis of accounting,investment revenues for the current period should include

Under the modified accrual basis,revenues are "available" if they are collected within the current period or are expected to be collected soon enough after the end of the period to be used to pay liabilities of the current period.

The Government and Not-For-Profit Environment

Fund Accounting

Issues of Budgeting and Control

Recognizing Expenditures in Governmental Funds

Accounting for Capital Projects and Debt Service

Capital Assets and Investments in Marketable Securities

Long-Term Obligations

Business-Type Activities

Fiduciary Funds and Permanent Funds

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Not-For-Profit Organizations

Federal Government Accounting

Filters