Exam 5: Governmental Activities - Recognizing Expenditures and Expenses

The amount of pension expenditures that should be recognized in the General Fund financial statements during the current year is

Bay City uses the purchases method to account for supplies.At the beginning of the year the City had no supplies on hand.During the year the City purchased $600,000 of supplies for use by activities accounted for in the General Fund.The City used $400,000 of those supplies during the year.Assuming that the city maintains its books and records in a manner that facilitates the preparation of the fund financial statements, at fiscal year-end the appropriate account balances related to supplies expenditures and supplies inventory would be

This year Port City was sued for injuries sustained when a citizen slipped and broke her hip on the icy City Hall steps.The City attorney estimates the City will be held liable by the courts and a judgment of $200,000 will result.Because of the nature of the case it will likely be four years before the City makes any payment related to the accident.The present value of the likely future payment is $167,000.In the General Fund, at the end of the current fiscal year, Port City should recognize a liability of

Employees of the City of Orleans earn ten days paid leave for each 12 months of employment.The City has a policy that employed must take their vacation days during the year following the year in which it is earned.If they do not take vacation in the allotted period, they forfeit the vacation pay benefit.Traditionally, employees have taken 80% of the vacation days earned.During the current year, employees of the City of Orleans earned $400,000 in vacation pay.Assuming the city maintains its books and records in a manner to facilitate the preparation of the government-wide financial statements, which of the following entries is the correct entry in the General Fund to record the vacation pay earned during the current period?

Assume that the City of Juneau maintains its books and records to facilitate the preparation of its fund financial statement.The City pays its employees bi-weekly on Friday.The fiscal year ended on Wednesday, June 30.Employees had been paid on Friday, June 25.The employees paid from the General Fund had earned $120,000 on Monday, Tuesday, and Wednesday (June 28, 29, and 30).What entry, if any, should be made on June 30?

Several years ago, Grant County was sued by a former County employee for wrongful discharge.Although it was to be contested by the County, at the time of the lawsuit the attorneys felt that that the County was likely to lose and the estimated amount of the ultimate judgment would be $100,000.This year, the case was finally settled with a judgment against the County of $150,000, which was paid.Assuming that the county maintains its books and records in a manner to facilitate the preparation of its government-wide financial statements, the entry in the current year should be

The City of Holbrook transferred $100,000 from the General Fund to the Debt Service Fund for payment of interest.The appropriate entry in the General Fund to record this transfer would be

When accounting for inventory items in a governmental fund, a reservation of fund balance is always required when the consumption method is used.

Government-wide statements present revenues and expenses from the perspective of the government, not of individual funds.

In a governmental fund, expenditures for wages and salaries should be recognized in the period in which the employees earn them.

Culver City recognized as revenues/expenditures those amounts collected/paid during the year or within 60 days of fiscal year-end.The City offers a pension benefit to its employees who meet certain age and years of employment criteria.The City participates in the State Pension Plan.The City's actuarially determined contribution to the State Pension Plan for the fiscal year ended 6/30/00 is $4 million.Due to cash inflow shortages the City, which budgeted $4 million for pension payments paid only $3 million in the fiscal year ended 6/30/00.The City made the final payment September 30, 2000.Assuming the City maintains its books and records in a manner that facilitates the preparation of the fund financial statements, what is the appropriate entry to record the pension payments and recognize any associated liability?

On July 1 Gilbert County bought computer equipment for use in the administrative offices of the County.The equipment has an estimated useful life of three years and salvage of $10,000.Gilbert County has a 6/30 fiscal year-end.Assuming that the County maintains its books and records in a manner that facilitates the preparation of government-wide financial statements, the $70,000 cost of this equipment would require which of the following entries?

Several years ago, Durham City issued $1 million in zero coupon bonds due and payable in 2010.The bonds were sold at an amount to yield investors 6% over the life of the bonds.During the current year, how much interest expenditures would Durham City recognize related to these bonds?

When recording a general long-term liability in a governmental fund upon issuing a bond, the credit should be to a bonds payable account.

Employees of the General Fund of Scott City earn ten days paid leave for each 12 months of employment.The City permits employees to carry the vacation days forward as long as they wish.During the current year employees earned $800,000 of vacation benefits of which the City estimates that $500,000 will be taken in the next year and the balance will be carried forward.Assuming that the City maintains its books and records in a manner that facilitates the preparation of their fund financial statements, which of the following entries is the correct entry in the General Fund to record the vacation pay earned during the current period?

The amount of pension expenditures that should be recognized in the government-wide financial statements during the current year is

Most governments budget (appropriate)resources for principal and interest only for the period in which a payment is due-not for future payments.

In budgeting for a governmental fund, the government should appropriate the resources for general capital assets in the periods when they are to be purchased, not those in which they will be used.

Culver City recognized as revenues/expenditures those amounts collected/paid during the year or within 60 days of fiscal year-end.The City offers a pension benefit to its employees who meet certain age and years of employment criteria.The City participates in the State Pension Plan.The City's actuarially determined contribution to the State Pension Plan for the fiscal year ended 6/30/00 is $4 million.Due to cash inflow shortages the City, which budgeted $4 million for pension payments paid only $3 million in the fiscal year ended 6/30/00.The City made the final payment September 30, 2000.Assuming the City maintains its books and records in a manner that facilitates the preparation of the government-wide financial statements, what is the appropriate entry to record the pension payments and recognize any associated liability?

Employees of the General Fund of Scott City earn ten days paid leave for each 12 months of employment.The City permits employees to carry the vacation days forward as long as they wish.During the current year employees earned $800,000 of vacation benefits of which the City estimates that $500,000 will be taken in the next year and the balance will be carried forward.Assuming that the City maintains its books and records in a manner that facilitates the preparation of their government-wide financial statements, which of the following entries is the correct entry in the General Fund to record the vacation pay earned during the current period?