Question 1

As used in defining the modified accrual basis of accounting,the term "available" means

Accepted Answer

A) received in cash. 
B) will be received in cash within 60 days after year-end. 
C) collection in cash is reasonably assured. 
D) collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. 
A) received in cash. 
B) will be received in cash within 60 days after year-end. 
C) collection in cash is reasonably assured. 
D) collected within the current period or expected to be collected soon enough thereafter to be used to pay liabilities of the current period.

Question 2

A government is the recipient of a bequest of a multi-story office building that the government intends to use as a new city hall.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 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 3

Under the accrual basis of accounting,property tax revenues are recognized

Accepted Answer

A) when they are received in cash. 
B) in the year for which they were levied. 
C) in the year for which they were levied and when collection in cash is reasonably assured. 
D) when they are available to finance expenditures of the fiscal period. 
A) when they are received in cash. 
B) in the year for which they were levied. 
C) in the year for which they were levied and when collection in cash is reasonably assured. 
D) when they are available to finance expenditures of the fiscal period.

Question 4

A city with a 12/31 fiscal year-end requires that restaurants buy a license,renewable yearly.Proceeds of the license fees are intended to pay the salaries of inspectors in the health department.Licenses are issued for a fiscal year from October 1 to September 30.During 2014,cash collections related to licenses were as follows Licenses issued during 2013 for the $10 / 1 / 13 - 9 / 30 / 14$ fiscal year $ \quad $$ \quad $$\$ 30$
Licenses issued during 2014 for the $10 / 1 / 14 - 9 / 30 / 15$ fiscal year$ \quad $$ \quad $ $\$ 180$ It is anticipated that during 2015 the amount collected on licenses for the 10/1/14-9/30/15 fiscal year will be $45.In September 2013 the amount collected related to 10/1/13-9/30/14 licenses was $144.What amount should be recognized as revenue in the fund financial statements for the fiscal year ended 12/31/14?

Accepted Answer

A) $180. 
B) $183. 
C) $210. 
D) $225. 
A) $180. 
B) $183. 
C) $210. 
D) $225.

Question 5

Unrestricted grant revenues with a time requirement should be recognized

Accepted Answer

A) when the award is announced. 
B) when the cash is received. 
C) in the period in which the grant is required to be used. 
D) when expenditures are recognized on grant-related activities. 
A) when the award is announced. 
B) when the cash is received. 
C) in the period in which the grant is required to be used. 
D) when expenditures are recognized on grant-related activities.

Question 6

Under the modified accrual basis of accounting,license fees,permits,and other miscellaneous revenue are generally recognized for practical purposes

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.

Question 7

Endowments are provided to governments with the specification that only the revenues generated from-not the contributed assets-may be used to finance specific programs.A government should recognize revenue from the initial endowment when

Accepted Answer

A) it receives the assets cash). 
B) when it receives the pledge. 
C) ratably over 30 years. 
D) never.The contributions themselves cannot be used to support the government's programs. 
A) it receives the assets cash). 
B) when it receives the pledge. 
C) ratably over 30 years. 
D) never.The contributions themselves cannot be used to support the government's programs.

Question 8

As used in governmental accounting,interperiod equity refers to a concept of

Accepted Answer

A) providing the same level of services to citizens each year. 
B) measuring whether current year revenues are sufficient to pay for current year services. 
C) levying property taxes at the same rate each year. 
D) requiring that general fund budgets be balanced each year. 
A) providing the same level of services to citizens each year. 
B) measuring whether current year revenues are sufficient to pay for current year services. 
C) levying property taxes at the same rate each year. 
D) requiring that general fund budgets be balanced each year.

Question 9

Under GAAP,property taxes levied in one fiscal period to finance the activities of the following fiscal period are recognized as revenue in the government-wide financial statements

Accepted Answer

A) in the year levied. 
B) in the year for which they are intended to finance the activities. 
C) when collected,regardless of when levied. 
D) in the year for which they are intended to finance the activities,if collected within that period or within a period no greater than 60 days after the close of the fiscal year. 
A) in the year levied. 
B) in the year for which they are intended to finance the activities. 
C) when collected,regardless of when levied. 
D) in the year for which they are intended to finance the activities,if collected within that period or within a period no greater than 60 days after the close of the fiscal year.

Question 10

Current financial resources include cash and receivables but not investments.

Accepted Answer

A) True 
 B)False

Question 11

A city receives notice of a $150,000 grant from the state to purchase vans to transport physically challenged individuals.Although the city did not receive any of the grant funds during the current year,the city 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 in 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 12

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 20th 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 governmental fund 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 13

Payments made to a state pension plan by the state government on behalf of a local government should

Accepted Answer

A) not be displayed or disclosed in the local government financial statements. 
B) be displayed as a revenue in the local government financial statements. 
C) be displayed as both a revenue and an expenditure in the local government financial statements. 
D) be disclosed,but not displayed,in the local government financial statements. 
A) not be displayed or disclosed in the local government financial statements. 
B) be displayed as a revenue in the local government financial statements. 
C) be displayed as both a revenue and an expenditure in the local government financial statements. 
D) be disclosed,but not displayed,in the local government financial statements.

Question 14

In accounting for property taxes,under the modified accrual basis,existing standards provide that,except in unusual circumstances,revenues should be recognized only if cash is expected to be collected within sixty days after year-end.

Accepted Answer

A) True 
 B)False

Question 15

A city levies a 2 percent sales tax.Sales taxes must be remitted by the merchants to the city by the twentieth day of the month following the month in which the sale occurred.Cash received by the city related to sales taxes is as follows: $\begin{array}{ll}
\text { Amount received } 1 / 20 / 14 \text {, applicable to December } 2013 \text { sales } & \$ 100 \
\text { Amount received } 2 / 20 / 14 \text {, applicable to January } 2014 \text { sales } & \$ 30 \
\text { Amount received during } 2014 \text { related to February-November } 2014 \text { sales } & \$ 400 \
\text { Amount received } 1 / 20 / 15 \text { for December } 2014 \text { sales } & \$ 110 \
\text { Amount received } 2 / 20 / 152 \text { for January } 2014 & \$ 40
\end{array}$ Assuming the city uses the same period to define "available" as the maximum period allowable for property taxes,what amount should it recognize in the government-wide financial statements as sales tax revenue 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 16

Under the modified accrual basis of accounting,derived nonexchange revenues are recognized when

Accepted Answer

A) they are earned. 
B) they are measurable and available to finance the expenditures of the current period. 
C) the underlying exchange transaction occurs. 
D) the underlying exchange transaction occurs and they are measurable and available to finance the expenditures of the current period. 
A) they are earned. 
B) they are measurable and available to finance the expenditures of the current period. 
C) the underlying exchange transaction occurs. 
D) the underlying exchange transaction occurs and they are measurable and available to finance the expenditures of the current period.

Question 17

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 2015the 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 government-wide 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.

As used in defining the modified accrual basis of accounting,the term "available" means

Under the accrual basis of accounting,property tax revenues are recognized

Unrestricted grant revenues with a time requirement should be recognized

Under the modified accrual basis of accounting,license fees,permits,and other miscellaneous revenue are generally recognized for practical purposes

Endowments are provided to governments with the specification that only the revenues generated from-not the contributed assets-may be used to finance specific programs.A government should recognize revenue from the initial endowment when

As used in governmental accounting,interperiod equity refers to a concept of

Under GAAP,property taxes levied in one fiscal period to finance the activities of the following fiscal period are recognized as revenue in the government-wide financial statements

Current financial resources include cash and receivables but not investments.

Payments made to a state pension plan by the state government on behalf of a local government should

In accounting for property taxes,under the modified accrual basis,existing standards provide that,except in unusual circumstances,revenues should be recognized only if cash is expected to be collected within sixty days after year-end.

Under the modified accrual basis of accounting,derived nonexchange revenues are recognized when

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

As used in defining the modified accrual basis of accounting,the term "available" means

Under the accrual basis of accounting,property tax revenues are recognized

Unrestricted grant revenues with a time requirement should be recognized

Under the modified accrual basis of accounting,license fees,permits,and other miscellaneous revenue are generally recognized for practical purposes

Endowments are provided to governments with the specification that only the revenues generated from-not the contributed assets-may be used to finance specific programs.A government should recognize revenue from the initial endowment when

As used in governmental accounting,interperiod equity refers to a concept of

Under GAAP,property taxes levied in one fiscal period to finance the activities of the following fiscal period are recognized as revenue in the government-wide financial statements

Current financial resources include cash and receivables but not investments.

Payments made to a state pension plan by the state government on behalf of a local government should

In accounting for property taxes,under the modified accrual basis,existing standards provide that,except in unusual circumstances,revenues should be recognized only if cash is expected to be collected within sixty days after year-end.

Under the modified accrual basis of accounting,derived nonexchange revenues are recognized when

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