Exam 4: Recognizing Revenues in Governmental Funds

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 $1 / 20 / 11$ , applicable to December 2010 sales $\quad\$ 100$ Amount received $2 / 20 / 11$ , applicable to January 2011 sales $\quad\$ 30$ Amount received during 2011 related to February-November 2011 sales $\quad\$ 400$ Amount received 1 / 20 / 12 for December 2011 sales $\quad\$ 110$ Amount received $2 / 20 / 12$ for January 2012 $\quad\$ 40$ 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 statement as sales tax revenue for the fiscal year ended 12/31/11.

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 2011, cash collections related to licenses were as follows Licenses issued during 2010 for the $10 / 1 / 06 - 9 / 30 / 11$ fiscal year $\quad\$ 30$ Licenses issued during 2010 for the $10 / 1 / 07 - 9 / 30 / 12$ fiscal year $\quad\$ 180$ It is anticipated that during 2012 the amount collected on licenses for the 10/1/07-9/30/08 fiscal year will be $45.In September 2010 the amount collected related to 10/1/06-9/30/07 licenses was $144.What amount should be recognized as revenue in the fund financial statements for the fiscal year ended 12/31/11?

Ideally, under the accrual basis of accounting, license fees, permits, and other miscellaneous revenue should be recognized

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 $1 / 20 / 11$ , applicable to December 2010 sales $\quad\$ 100$ Amount received $2 / 20 / 11$ , applicable to January 2011 sales $\quad\$ 30$ Amount received $3 / 20 / 11$ , applicable to February 2011 sales $\quad\$ 20$ Amount received during 2011 related to March-November 2011 sales $\quad\$ 380$ Amount received 1 / 20 / 12 for December 2011 sales $\quad\$ 110$ Amount received $2 / 20 / 12$ for January 2012 $\quad\$ 40$ Amount received $3 / 20 / 12$ for February 2012 $\quad\$ 10$ 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 12/31/11.

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

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

Governmental entities should recognize revenue from donated fixed assets that will be sold to support programs of the entity at which amount in their government-wide financial statements?

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 $1 / 20 / 11$ , applicable to December 2010 sales $\quad\$ 100$ Amount received $2 / 20 / 11$ , applicable to January 2011 sales $\quad\$ 30$ Amount received $3 / 20 / 11$ , applicable to February 2011 sales $\quad\$ 20$ Amount received during 2011 related to March-November 2011 sales $\quad\$ 380$ Amount received 1 / 20 / 12 for December 2011 sales $\quad\$ 110$ Amount received $2 / 20 / 12$ for January 2012 $\quad\$ 40$ Amount received $3 / 20 / 12$ for February 2012 $\quad\$ 10$ 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 government-wide financial statements for the fiscal year ended 12/31/11.

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

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

Under the accrual basis of accounting, gains and losses on disposal of fixed assets

During 2011, a state has the following cash collections related to state income taxes Payroll withholdings and estimated payments related to 2011 income $\quad \$ 360$ $4 / 15 / 11$ Balance of 2010 net of $\$ 10$ refunds income taxes $\$ 40$ $1 / 15 / 12$ payroll withholdings and estimated payments related to 2011 income $\quad \$ 30$ $2 / 15 / 12$ payroll withholdings and estimated payments related to 2011 income $\$ 35$ $3 / 15 / 12$ payroll withholdings and estimated payments related to 2012 income $\$ 25$ $4 / 15 / 12$ Balance of 2011 net of $\$ 5$ refunds income taxes $\$ 45$ Assuming that the state defines available as the maximum period allowable for property taxes, what is the amount of revenue that will be recognized in the 2011 government-wide financial statements related to state income taxes?

Under the modified accrual basis of accounting, imposed nonexchange revenues such as fines should be recognized

If an entity elects to focus on all economic resources, then it should adopt a modified accrual basis of accounting.

Under GAAP, investment income for governmental entities must include

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 one bus for $65,000 and issues a purchase order for another van for $60,000.The grant revenue that the city should recognize in the government-wide financial statements in the current year is

Under the modified accrual basis of accounting, the amount of property tax revenues that should be recognized by a governmental entity in the current year related to the current year levy will be

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

Under GAAP, income tax revenues should be recognized in the governmental fund financial statements in the accounting period

State governments should recognize food stamp revenue