Question 1

Unrestricted grant revenues with a time requirement should be recognized

Accepted Answer

A) when the award is announced. 
B) when the cash is received. 
C) in the period in which the grant is required to be used. 
D) when expenditures are recognized on grant-related activities. 
A) when the award is announced. 
B) when the cash is received. 
C) in the period in which the grant is required to be used. 
D) when expenditures are recognized on grant-related activities.

Question 2

A local governmental entity began the year with a portfolio of securities with an historical cost of $1,200 and a fair value of $1,240.During the year the government acquired an additional security at a cost of $260 and sold for $200 a security that had an historical cost of $172 and a fair value at the beginning of the year of $190.At the end of the year, the securities portfolio had a fair value of $1,330.The amount that should be recognized on the financial statements for the year as investment income is

Accepted Answer

A) $10. 
B) $20. 
C) $28. 
D) $30. 
A) $10. 
B) $20. 
C) $28. 
D) $30.

Question 3

A city is the recipient of a cash bequest of $500,000 that must be used to plant flowers and shrubs in the city parks.During the year only $200,000 is actually received from the bequest and $150,000 is spent on shrubs.The amount that should be recognized as revenue by the city in its government-wide financial statements in the current year is

Accepted Answer

A)  $-0-. 
B)  $150,000. 
C)  $200,000. 
D)  $500,000. 
A)  $-0-. 
B)  $150,000. 
C)  $200,000. 
D)  $500,000.

Question 4

Revenues that cannot be classified as general revenues are by default considered program revenues.

Accepted Answer

A) True 
 B)False

Question 5

During 2011, 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 2012 will be uncollectible.During 2011 the city collected $230 related to 2011 fines and $20 related to 2010 fines.The amount of revenue that the city should recognize in its 2011 governmental fund financial statements related to fines is

Accepted Answer

A)  $230. 
B)  $250. 
C)  $270. 
D)  $300. 
A)  $230. 
B)  $250. 
C)  $270. 
D)  $300.

Question 6

A City levies a 2% sales tax.Sales tax must be remitted by the merchants to the City by the 20th 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 $1 / 20 / 10$, applicable to December 2010 sales $\quad\$ 100$ 
Amount received $2 / 20 / 10$, applicable to January 2011 sales $\quad\$ 30$ 
Amount received during 2010 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 governmental fund financial statement as sales tax revenue for the fiscal year ended 12/31/11.

Accepted Answer

A)  $430. 
B)  $530. 
C)  $540. 
D)  $550. 
A)  $430. 
B)  $530. 
C)  $540. 
D)  $550.

Question 7

A governmental entity is the recipient of a bequest of a multi-story office building that the government intends to sell to support program activities.The building has a historical of $850,000; a book value in the hands of the benefactor of $700,000; and a fair value of $1,050,000.The city had not yet begun to try to sell the building when its annual financial statements were issued.The city should recognize on its governmental fund financial statements, donations revenue of

Accepted Answer

A)  $-0-. 
B)  $700,000. 
C)  $850,000. 
D)  $1,050,000. 
A)  $-0-. 
B)  $700,000. 
C)  $850,000. 
D)  $1,050,000.

Question 8

A city that has 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 2010 to finance the activities of fiscal year 2011.Property taxes are due in two installments June 20 and December 20.Cash collections related to property taxes are as follows: $$\begin{array} { r l l } 
1 / 15 / 11 & \text { for property taxes levied in 2009, due in } 2010 & \$ 25,000 \
2 / 15 / 11 & \text { for property taxes levied in 2009, due in } 2010 & \$ 15,000 \
3 / 15 / 11 & \text { for property taxes levied in 2009, due in } 2010 & \$ 10,000 \
6 / 20 / 11 & \text { First install ment of taxes levied in 2010, due } 6 / 20 / 11 & \$ 350,000 \
12 / 20 / 11 & \text { Second installment of taxes levied in } 2010 \text {, due } 12 / 20 / 11 & \$ 150,000 \
1 / 15 / 12 & \text { for property taxes levied in 2010, due in } 2011 & \$ 15,000 \
2 / 15 / 12 & \text { for property taxes levied in 2010, due in } 2011 & \$ 10,000 \
3 / 15 / 12 & \text { for property taxes levied in 2010, due in } 2011 & \$5 , 000
\end{array}$$ The total amount of property tax revenue that should be recognized in the governmental fund financial statements in 2011 is:

Accepted Answer

A) $600,000. 
B) $575,000. 
C) $535,000. 
D) $525,000. 
A) $600,000. 
B) $575,000. 
C) $535,000. 
D) $525,000.

Question 9

A governmental entity is the recipient of a bequest of a multi-story office building that the government intends to use as a new city hall.The building has a historical cost of $850,000; a book value in the hands of the benefactor of $700,000; and a fair value of $1,050,000.The city should recognize on its governmental fund financial statements, donations revenue of

Accepted Answer

A)  $-0-. 
B)  $700,000. 
C)  $850,000. 
D)  $1,050,000. 
A)  $-0-. 
B)  $700,000. 
C)  $850,000. 
D)  $1,050,000.

Question 10

Under the modified accrual basis of accounting, investment revenues for the current period should include

Accepted Answer

A) only interest and dividends received. 
B) all interest and dividends received during the period plus all accruals of interest and dividends earned. 
C) all interest and dividends received plus gains and losses on securities that were sold during the period. 
D) all interest and dividends received, all gains and losses on securities sold and all changes in market values on securities held in the portfolio at year-end. 
A) only interest and dividends received. 
B) all interest and dividends received during the period plus all accruals of interest and dividends earned. 
C) all interest and dividends received plus gains and losses on securities that were sold during the period. 
D) all interest and dividends received, all gains and losses on securities sold and all changes in market values on securities held in the portfolio at year-end.

Question 11

In accounting for property taxes, under the modified accrual basis, existing standards provide that, except in unusual circumstances, revenues should be recognized only if cash is expected to be collected within sixty days of year-end.

Accepted Answer

A) True 
 B)False

Question 12

Under the modified accrual basis of accounting, derived nonexchange revenues are recognized when

Accepted Answer

A) they are earned. 
B) they are measurable and available to finance the expenditures of the current period. 
C) the underlying exchange transaction occurs. 
D) the underlying exchange transaction occurs and they are measurable and available to finance the expenditures of the current period. 
A) they are earned. 
B) they are measurable and available to finance the expenditures of the current period. 
C) the underlying exchange transaction occurs. 
D) the underlying exchange transaction occurs and they are measurable and available to finance the expenditures of the current period.

Question 13

A city that has 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 2010 to finance the activities of fiscal year 2011.Property taxes are due in two installments June 20 and December 20.Cash collections related to property taxes are as follows: $$\begin{array} { r l l } 
1 / 15 / 11 & \text { for property taxes levied in 2009, due in } 2010 & \$ 25,000 \
2 / 15 / 11 & \text { for property taxes levied in 2009, due in } 2010 & \$ 15,000 \
3 / 15 / 11 & \text { for property taxes levied in 2009, due in } 2010 & \$ 10,000 \
6 / 20 / 11 & \text { First install ment of taxes levied in 2010, due } 6 / 20 / 11 & \$ 350,000 \
12 / 20 / 11 & \text { Second installment of taxes levied in } 2010 \text {, due } 12 / 20 / 11 & \$ 150,000 \
1 / 15 / 12 & \text { for property taxes levied in 2010, due in } 2011 & \$ 15,000 \
2 / 15 / 12 & \text { for property taxes levied in 2010, due in } 2011 & \$ 10,000 \
3 / 15 / 12 & \text { for property taxes levied in 2010, due in } 2011 & \$5 , 000
\end{array}$$ The total amount of property tax revenue that will be recognized in the government-wide financial statements in 2011 is:

Accepted Answer

A)  $600,000. 
B)  $575,000. 
C)  $535,000. 
D)  $525,000. 
A)  $600,000. 
B)  $575,000. 
C)  $535,000. 
D)  $525,000.

Question 14

For purposes of recognizing property tax revenues in governmental funds, "available" is defined as

Accepted Answer

A) revenues received within 90 days of year-end. 
B) revenues received within 60 days of year-end. 
C) revenues received within 120 days of year-end. 
D) being up to the judgment of the preparer. 
A) revenues received within 90 days of year-end. 
B) revenues received within 60 days of year-end. 
C) revenues received within 120 days of year-end. 
D) being up to the judgment of the preparer.

Question 15

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

Accepted Answer

A) the award is made. 
B) the cash is received. 
C) the grantee is notified of the award. 
D) expenditures are recorded on grant-related activities. 
A) the award is made. 
B) the cash is received. 
C) the grantee is notified of the award. 
D) expenditures are recorded on grant-related activities.

Question 16

Under the modified accrual basis of accounting, license fees, permits, and other miscellaneous revenue are generally recognized for practical purposes

Accepted Answer

A) when cash is received. 
B) when the exchange takes place. 
C) over the period during which the government obtains an enforceable legal claim. 
D) when related expenditures are incurred. 
A) when cash is received. 
B) when the exchange takes place. 
C) over the period during which the government obtains an enforceable legal claim. 
D) when related expenditures are incurred.

Question 17

Ad valorem taxes are taxes that are based on value.

Accepted Answer

A) True 
 B)False

Question 18

Endowments are provided to governments with the specification that only the revenues generated from-not the contributed assets-may be used to finance specific programs.A government should recognize revenue from the initial endowment when

Accepted Answer

A) it receives the assets cash. 
B) when it receives the pledge. 
C) ratably over 30 years. 
D) never.The contributions themselves cannot be used to support the government's programs. 
A) it receives the assets cash. 
B) when it receives the pledge. 
C) ratably over 30 years. 
D) never.The contributions themselves cannot be used to support the government's programs.

Question 19

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 governmental fund financial statements related to state income taxes?

Accepted Answer

A)  $400. 
B)  $405. 
C)  $430. 
D)  $465. 
A)  $400. 
B)  $405. 
C)  $430. 
D)  $465.

Question 20

The budgetary measurement focus of governments is determined by applicable state or local laws.

Accepted Answer

A) True 
 B)False

Unrestricted grant revenues with a time requirement should be recognized

Revenues that cannot be classified as general revenues are by default considered program revenues.

Under the modified accrual basis of accounting, investment revenues for the current period should include

In accounting for property taxes, under the modified accrual basis, existing standards provide that, except in unusual circumstances, revenues should be recognized only if cash is expected to be collected within sixty days of year-end.

Under the modified accrual basis of accounting, derived nonexchange revenues are recognized when

For purposes of recognizing property tax revenues in governmental funds, "available" is defined as

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

Under the modified accrual basis of accounting, license fees, permits, and other miscellaneous revenue are generally recognized for practical purposes

Ad valorem taxes are taxes that are based on value.

Endowments are provided to governments with the specification that only the revenues generated from-not the contributed assets-may be used to finance specific programs.A government should recognize revenue from the initial endowment when

The budgetary measurement focus of governments is determined by applicable state or local laws.

The Government and Not-For-Profit Environment

Fund Accounting

Issues of Budgeting and Control

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 4: Recognizing Revenues in Governmental Funds

Unrestricted grant revenues with a time requirement should be recognized

Revenues that cannot be classified as general revenues are by default considered program revenues.

Under the modified accrual basis of accounting, investment revenues for the current period should include

In accounting for property taxes, under the modified accrual basis, existing standards provide that, except in unusual circumstances, revenues should be recognized only if cash is expected to be collected within sixty days of year-end.

Under the modified accrual basis of accounting, derived nonexchange revenues are recognized when

For purposes of recognizing property tax revenues in governmental funds, "available" is defined as

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

Under the modified accrual basis of accounting, license fees, permits, and other miscellaneous revenue are generally recognized for practical purposes

Ad valorem taxes are taxes that are based on value.

Endowments are provided to governments with the specification that only the revenues generated from-not the contributed assets-may be used to finance specific programs.A government should recognize revenue from the initial endowment when

The budgetary measurement focus of governments is determined by applicable state or local laws.

The Government and Not-For-Profit Environment

Fund Accounting

Issues of Budgeting and Control

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