Question 1

Not-for-profit budgets focus first on revenues and secondarily on expenditures.

Accepted Answer

A) True 
 B)False  True

Question 2

Most budgets are prepared on a cash or modified cash basis.

Accepted Answer

A) True 
 B)False  True

Question 3

A public school district formally adopted a budget with estimated revenues of $800 and approved expenditures of $780.Which of the following is the appropriate entry to record the budget?

Accepted Answer

A) Debit Estimated revenues $800;credit Appropriations $780;credit Fund balance $20. 
B) Debit Appropriations $780;Debit Fund balance $20;credit Estimated revenues $800. 
C) Debit Encumbrances $780;Debit Fund balance $20;credit Estimated revenues $800. 
D) Memorandum entry only. 
A) Debit Estimated revenues $800;credit Appropriations $780;credit Fund balance $20. 
B) Debit Appropriations $780;Debit Fund balance $20;credit Estimated revenues $800. 
C) Debit Encumbrances $780;Debit Fund balance $20;credit Estimated revenues $800. 
D) Memorandum entry only. A

Question 4

Property taxes levied on the citizens of the Hill County would most appropriately be budgeted in which of the following budgets?

Accepted Answer

A) Operating budget. 
B) Capital budget. 
C) Flexible budget. 
D) All of the above. 
A) Operating budget. 
B) Capital budget. 
C) Flexible budget. 
D) All of the above.

Question 5

Which of the following is NOT a reason that legally adopted budgets may not be readily comparable to amounts reported in the GAAP-based financial statements?

Accepted Answer

A) Differences in basis of accounting. 
B) Differences in timing. 
C) Differences in reporting entity. 
D) Differences in recognition. 
A) Differences in basis of accounting. 
B) Differences in timing. 
C) Differences in reporting entity. 
D) Differences in recognition.

Question 6

Cash-basis budgets help governments focus on interperiod equity.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is NOT true about cash basis budgeting?

Accepted Answer

A) Cash basis budgeting permits a government to balance its budget by delaying cash disbursements. 
B) Cash basis budgeting permits a government to balance its budget by advancing the recognition of revenue. 
C) Cash basis budgeting encourages interperiod equity. 
D) Cash basis budgeting complicates financial accounting and reporting. 
A) Cash basis budgeting permits a government to balance its budget by delaying cash disbursements. 
B) Cash basis budgeting permits a government to balance its budget by advancing the recognition of revenue. 
C) Cash basis budgeting encourages interperiod equity. 
D) Cash basis budgeting complicates financial accounting and reporting.

Question 8

A city formally adopted a budget at the beginning of the current year.Budgeted revenues were $500 and budgeted expenditures were $490.During the year actual revenues were $520 and actual expenditures were $480.Which of the following statements is true?Fund balance at the end of the current year in comparison to fund balance at the end of the preceding year will be

Accepted Answer

A) $10 greater. 
B) $30 greater. 
C) $40 greater. 
D) $50 greater. 
A) $10 greater. 
B) $30 greater. 
C) $40 greater. 
D) $50 greater.

Question 9

Which of the following is a primary benefit of a performance budget?

Accepted Answer

A) It facilitates control by establishing rigid spending mandates. 
B) It encourages accomplishment of objectives by associating expenditures with outcomes. 
C) It encourages planning by requiring management to anticipate every type of expenditure. 
D) It provides decision-makers with detailed information. 
A) It facilitates control by establishing rigid spending mandates. 
B) It encourages accomplishment of objectives by associating expenditures with outcomes. 
C) It encourages planning by requiring management to anticipate every type of expenditure. 
D) It provides decision-makers with detailed information.

Question 10

A county previously encumbered $15,000 for the acquisition of supplies.The supplies were received at a total cost of $14,700.To recognize this event the county should make which of the following entries?

Accepted Answer

A) Debit Reserve for encumbrances $15,000;credit Encumbrances $15,000. 
B) Debit Reserve for encumbrances $14,700;credit Encumbrances $14,700. 
C) Debit Encumbrances $15,000;credit Reserve for encumbrances $15,000. 
D) Debit Encumbrances $14,700;credit Reserve for encumbrances $14,700. 
A) Debit Reserve for encumbrances $15,000;credit Encumbrances $15,000. 
B) Debit Reserve for encumbrances $14,700;credit Encumbrances $14,700. 
C) Debit Encumbrances $15,000;credit Reserve for encumbrances $15,000. 
D) Debit Encumbrances $14,700;credit Reserve for encumbrances $14,700.

Question 11

Which of the following is NOT a function of a budget in the governmental environment?

Accepted Answer

A) Planning. 
B) Organizing. 
C) Controlling. 
D) Evaluating. 
A) Planning. 
B) Organizing. 
C) Controlling. 
D) Evaluating.

Question 12

A review of Park City's books shows the following information: I.$2,500 of outstanding vouchers payable
II)$3,000 of outstanding purchase order amounts
Which of these amounts would you expect to see in the general fund's encumbrances account?

Accepted Answer

A) $2,500 
B) $3,000 
C) $5,500 
D) $500 
A) $2,500 
B) $3,000 
C) $5,500 
D) $500

Question 13

A university that formally integrates the budget in the accounting system and uses encumbrance accounting orders some new computers that will cost approximately $20,000.To recognize this event the university should make which of the following entries?

Accepted Answer

A) Debit Expenditures $20,000;credit Encumbrances $20,000 
B) Debit Encumbrances $20,000;credit Reserve for encumbrances $20,000 
C) Debit Encumbrances $20,000;credit Accounts payable $20,000 
D) No entry required when the order is placed. 
A) Debit Expenditures $20,000;credit Encumbrances $20,000 
B) Debit Encumbrances $20,000;credit Reserve for encumbrances $20,000 
C) Debit Encumbrances $20,000;credit Accounts payable $20,000 
D) No entry required when the order is placed.

Question 14

Lincoln County uses encumbrance accounting to control expenditures.It charges the cost of outstanding purchase commitments to expenditures in the year they are ordered,not in the year they are received.If the county had $7,000 of purchase commitments outstanding at the end of Year 1 and received those goods during Year 2 at a cost of $7,800,what would be the impact on total fund balance for Year 2?

Accepted Answer

A) Total fund balance at the end of Year 2 would be $7,800 less than at the end of Year 1. 
B) Total fund balance at the end of Year 2 would be $800 less than at the end of Year 1. 
C) Total fund balance at the end of Year 2 would be $800 greater than at the end of Year 1. 
D) Total fund balance at the end of Year 2 would be the same as it was at the end of Year 1 
A) Total fund balance at the end of Year 2 would be $7,800 less than at the end of Year 1. 
B) Total fund balance at the end of Year 2 would be $800 less than at the end of Year 1. 
C) Total fund balance at the end of Year 2 would be $800 greater than at the end of Year 1. 
D) Total fund balance at the end of Year 2 would be the same as it was at the end of Year 1

Question 15

An officially adopted budget is generally called

Accepted Answer

A) An appropriation bill. 
B) An operating budget. 
C) A capital budget. 
D) None of the above. 
A) An appropriation bill. 
B) An operating budget. 
C) A capital budget. 
D) None of the above.

Question 16

State and local governments' budget-to-actual comparisons present both original and final budget amounts.

Accepted Answer

A) True 
 B)False

Question 17

A county general fund budget includes budgeted revenues of $900 and budgeted expenditures of $890.Actual revenues for the year were $915.To close the estimated revenues account at the end of the year

Accepted Answer

A) Debit Estimated revenues $15 
B) Credit Estimated revenue $15 
C) Debit Estimated revenues $900 
D) Credit Estimated revenues $900 
A) Debit Estimated revenues $15 
B) Credit Estimated revenue $15 
C) Debit Estimated revenues $900 
D) Credit Estimated revenues $900

Question 18

Neither the GASB nor the FASB sets standards for budgetary accounting.

Accepted Answer

A) True 
 B)False

Question 19

At year-end Oakland County had $3,000 of outstanding purchase commitments on the books.After the appropriate closing entries are made,what is the effect on the total fund balance of Oakland County?

Accepted Answer

A) It is $3,000 greater than it would have been if the purchase commitments had been fulfilled by year-end. 
B) It is $3,000 less than it would have been if the purchase commitments had been fulfilled by year-end. 
C) It is the same as it would have been if the purchase commitments had been fulfilled by year-end;it will be reduced by $3,000 next year. 
D) It is the same as it would have been if the purchase commitments had been fulfilled by year-end;it will not change next year. 
A) It is $3,000 greater than it would have been if the purchase commitments had been fulfilled by year-end. 
B) It is $3,000 less than it would have been if the purchase commitments had been fulfilled by year-end. 
C) It is the same as it would have been if the purchase commitments had been fulfilled by year-end;it will be reduced by $3,000 next year. 
D) It is the same as it would have been if the purchase commitments had been fulfilled by year-end;it will not change next year.

Question 20

Which of the following bases of accounting has been established by GASB for use in the preparation of the general fund budget?

Accepted Answer

A) Cash basis. 
B) Modified accrual basis. 
C) Accrual basis. 
D) None of the above. 
A) Cash basis. 
B) Modified accrual basis. 
C) Accrual basis. 
D) None of the above.

Not-for-profit budgets focus first on revenues and secondarily on expenditures.

Most budgets are prepared on a cash or modified cash basis.

A public school district formally adopted a budget with estimated revenues of $800 and approved expenditures of $780.Which of the following is the appropriate entry to record the budget?

Property taxes levied on the citizens of the Hill County would most appropriately be budgeted in which of the following budgets?

Which of the following is NOT a reason that legally adopted budgets may not be readily comparable to amounts reported in the GAAP-based financial statements?

Cash-basis budgets help governments focus on interperiod equity.

Which of the following is NOT true about cash basis budgeting?

Which of the following is a primary benefit of a performance budget?

A county previously encumbered $15,000 for the acquisition of supplies.The supplies were received at a total cost of $14,700.To recognize this event the county should make which of the following entries?

Which of the following is NOT a function of a budget in the governmental environment?

A review of Park City's books shows the following information: I.$2,500 of outstanding vouchers payable II)$3,000 of outstanding purchase order amounts Which of these amounts would you expect to see in the general fund's encumbrances account?

A university that formally integrates the budget in the accounting system and uses encumbrance accounting orders some new computers that will cost approximately $20,000.To recognize this event the university should make which of the following entries?

An officially adopted budget is generally called

State and local governments' budget-to-actual comparisons present both original and final budget amounts.

A county general fund budget includes budgeted revenues of $900 and budgeted expenditures of $890.Actual revenues for the year were $915.To close the estimated revenues account at the end of the year

Neither the GASB nor the FASB sets standards for budgetary accounting.

At year-end Oakland County had $3,000 of outstanding purchase commitments on the books.After the appropriate closing entries are made,what is the effect on the total fund balance of Oakland County?

Which of the following bases of accounting has been established by GASB for use in the preparation of the general fund budget?

The Government and Not-For-Profit Environment

Fund Accounting

Recognizing Revenues in Governmental Funds

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 3: Issues of Budgeting and Control

Not-for-profit budgets focus first on revenues and secondarily on expenditures.

Most budgets are prepared on a cash or modified cash basis.

A public school district formally adopted a budget with estimated revenues of $800 and approved expenditures of $780.Which of the following is the appropriate entry to record the budget?

Property taxes levied on the citizens of the Hill County would most appropriately be budgeted in which of the following budgets?

Which of the following is NOT a reason that legally adopted budgets may not be readily comparable to amounts reported in the GAAP-based financial statements?

Cash-basis budgets help governments focus on interperiod equity.

Which of the following is NOT true about cash basis budgeting?

Which of the following is a primary benefit of a performance budget?

A county previously encumbered $15,000 for the acquisition of supplies.The supplies were received at a total cost of $14,700.To recognize this event the county should make which of the following entries?

Which of the following is NOT a function of a budget in the governmental environment?

A review of Park City's books shows the following information: I.$2,500 of outstanding vouchers payable II)$3,000 of outstanding purchase order amounts Which of these amounts would you expect to see in the general fund's encumbrances account?

A university that formally integrates the budget in the accounting system and uses encumbrance accounting orders some new computers that will cost approximately $20,000.To recognize this event the university should make which of the following entries?

An officially adopted budget is generally called

State and local governments' budget-to-actual comparisons present both original and final budget amounts.

A county general fund budget includes budgeted revenues of $900 and budgeted expenditures of $890.Actual revenues for the year were $915.To close the estimated revenues account at the end of the year

Neither the GASB nor the FASB sets standards for budgetary accounting.

At year-end Oakland County had $3,000 of outstanding purchase commitments on the books.After the appropriate closing entries are made,what is the effect on the total fund balance of Oakland County?

Which of the following bases of accounting has been established by GASB for use in the preparation of the general fund budget?

The Government and Not-For-Profit Environment

Fund Accounting

Recognizing Revenues in Governmental Funds

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