Exam 17: Governmental Entities: Introduction and General Fund Accounting

The adjusted trial balance for White River for the fiscal year ended June 30, 20X9, is presented below. Required: a. Prepare a statement of revenues, expenditures, and changed in fund balance for White River for the year ended June 30, 20X9. Assume there were no supplies or outstanding encumbrances at the beginning of the year. b. Prepare a balance sheet for White River at June 30, 20X9.

Identify the legal term that allows the general fund to make expenditures.

Discuss major differences between a governmental entity's uses of the modified accrual method and a for-profit corporation's use of the accrual method.

Note: This is a Kaplan CPA Review Question The following information pertains to property taxes levied by Oak City for 20X4: What amount should Oak report for 20X4 net property tax revenues?

Which of the following items is not recognized as revenue by a governmental unit?

Which governmental fund includes resources that are legally restricted so that the governmental entity must maintain the principal and can use only the earnings from the fund's resources to benefit the government's programs for all of its citizens?

Which combination of fund and measurement basis is correct?

Note: This is a Kaplan CPA Review Question A budgetary fund balance - assigned in excess of a balance of encumbrances indicates

Gotham City acquires $25,000 of inventory on November 1, 20X7, having held no inventory previously. On December 31, 20X7, the end of Gotham City's fiscal year, a physical count shows $8,000 still in stock. During 20X8, $6,500 of this inventory is used, resulting in a $1,500 remaining balance of supplies on December 31, 20X8. Which of the following accounts are debited when closing entries are made for the general fund (assume outstanding encumbrances lapse at year-end)? I. Appropriations Control. II. Estimated Revenues Control. III. Encumbrances. IV. Budgetary Fund Balance-Reserved for Encumbrances. V. Estimated Other Financing Uses-Transfer Out. VI. Revenue-Property Tax.

Which of the following funds should use the modified accrual basis of accounting?

Note: This is a Kaplan CPA Review Question Pine City's year end is June 30. Pine levies property taxes in January of each year for the calendar year. One-half of the levy is due in May and one-half is due in October. Property tax revenue is budgeted for the period in which payment is due. The following information pertains to Pine's property taxes for the period from July 1, 20X4, to June 30, 20X5: The $40,000 balance due for the May 20X5 installments was expected to be collected in August 20X5. What amount should Pine recognize for property tax revenue for the year ended June 30, 20X5?

Note: This is a Kaplan CPA Review Question The Board of Commissioners of the City of Rockton adopted its budget for the year ending July 31, 20X2, which indicated revenues of $1,000,000 and appropriations of $900,000. If the budget is formally integrated into the accounting records, what is the required journal entry?

The general fund of Athens ordered computer equipment on December 1, 20X8, for $32,000. The order was appropriately encumbered on this date. Athens received the computer equipment on January 25, 20X9, and issued a voucher to pay the vendor $32,400. Athens uses the calendar year for reporting, and all outstanding encumbrances lapse at year-end. Athens' governing board honors all outstanding encumbrances by including them in the following year's appropriations. On January 25, 20X9, the general fund of Athens should debit:

The general fund of Park City acquired computer equipment at a cost of $50,000 on May 18, 20X9. To record acquisition of this equipment, the general fund of Park City should debit:

Note: This is a Kaplan CPA Review Question Albee Township's fiscal year ends on June 30. Albee uses encumbrance accounting. On April 5, 20X5, an approved $1,000 purchase order was issued for supplies. Albee received these supplies on May 2, 20X5, and the $1,000 invoice was approved for payment. What journal entry should Albee make on April 5, 20X5, to record the approved purchase order?

In accounting for governmental funds, which of the following items could appear only on government-wide financial statements? I. Fixed assets II. Long-term debt III. Investments

Gotham City acquires $25,000 of inventory on November 1, 20X7, having held no inventory previously. On December 31, 20X7, the end of Gotham City's fiscal year, a physical count shows $8,000 still in stock. During 20X8, $6,500 of this inventory is used, resulting in a $1,500 remaining balance of supplies on December 31, 20X8. Based on the preceding information, which of the following would be the correct account balances for 20X8 if Gotham City used the purchase method of accounting for inventories?

Note: This is a Kaplan CPA Review Question Elm City issued a purchase order for supplies with an estimated cost of $5,000. When the supplies were received, the accompanying invoice indicated an actual price of $4,950. What amount should Elm debit (credit) to the budgetary fund balance account after the supplies and invoice were received?

The general fund of the City of Columbia transferred money to establish an internal service fund for the city's data processing needs. The general fund of Columbia should account for this transaction as a(n):

Which of the following funds are classified as governmental funds?