Exam 4: Governmental Activities - Recognizing Revenues

Under the modified accrual basis of accounting, derived nonexchange revenues are recognized by a governmental entity as revenue

If an entity elects to focus on all economic resources (both current and long-term assets and liabilities), then it should adopt a modified accrual basis of accounting.

A city that has adopted 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 2000 to finance the activities of fiscal year 2001.Property taxes are due in two installments June 20 and December 20.Cash collections related to property taxes are as follows: 1/15/01 for property taxes levied in 1999, due in 2000 $ 25,000 2/15/01 for property taxes levied in 1999, due in 2000 $ 15,000 3/15/01 for property taxes levied in 1999, due in 2000 $ 10,000 6/20/01 First installment of taxes levied in 2000, due 6/20/01 $350,000 12/20/01 Second installment of taxes levied in 2000, due 12/20/01 $150,000 1/15/02 for property taxes levied in 2000, due in 2001 $ 15,000 2/15/02 for property taxes levied in 2000, due in 2001 $ 10,000 3/15/02 for property taxes levied in 2000, due in 2001 $ 5,000 The total amount of property tax revenue that will be recognized in the government-wide financial statements in 2001 is:

Reimbursement-type grant revenues are recognized in the accounting period in which

A City levies a 2% sales tax that is collected for them by the State.Sales tax must be remitted by the merchants to the State by the 20^th 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 tax is as follows: Amount received 1/20/00, applicable to December 1999 sales $ 50 Amount received 2/20/00, applicable to January 2000 sales $ 15 Amount received 3/20/00, applicable to February 2000 sales $ 10 Amount received during 2000 related to March-November 2000 sales $190 Amount received 1/20/01 for December 2000 sales $ 55 Amount received 2/20/01 for January 2001 $ 20 Amount received 3/20/01 for February 2001 $ 5 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 fund financial statements for the fiscal year ended 12/31/00.

Under the accrual basis of accounting used by a governmental entity, investment revenues for the current period should include

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

Sales taxes are taxpayer assessed, that is, parties other than the beneficiary government determine the tax base.

For fund financial statements, the measurement focus and basis of accounting used by governmental fund types are

Governmental activities tend to derive the majority of their revenues from exchange transactions.

Under the accrual basis of accounting, derived nonexchange revenues are recognized by a governmental entity as revenue

Under GAAP, license and permit fees should be recognized in the fund financial statements in the accounting period

Under the accrual basis of accounting, fines, license fees, permits, and other miscellaneous revenue are generally recognized

Income taxes are classified as ad valorem taxes.

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

A local governmental entity began the year with a portfolio of securities with an historical cost of $600 and a fair value of $620.During the year the government acquired an additional security at a cost of $130 and sold for $100 a security that had an historical cost of $86 and a fair value at the beginning of the year of $95.At the end of the year the securities portfolio had a fair value of $665.The amount that should be recognized on the financial statements for the year as investment income is

A city receives notice of a $200,000 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 one bus for $85,000 and issues a purchase order for another van for $80,000.The grant revenue that the city should recognize in the government-wide financial statements in the current year is

A City levies a 2% sales tax.Sales tax must be remitted by the merchants to the City by the 20^th day of the month following the month in which the sale occurred.Cash received by the City related to sales tax is as follows: Amount received 1/20/00, applicable to December 1999 sales $ 50 Amount received 2/20/00, applicable to January 2000 sales $ 15 Amount received during 2000 related to February-November 2000 sales $200 Amount received 1/20/01 for December 2000 sales $ 55 Amount received 2/20/01 for January 2001 $ 20 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 fund financial statement as sales tax revenue for the fiscal year ended 12/31/00.

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

During 2000, 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 2000 will be uncollectible.During 1999 the city collected $230 related to 2000 fines and $20 related to 1999 fines.The amount of revenue that the city should recognize in its 2000 fund financial statements related to fines is