Question 1

Expenditures should be budgeted by "character." An example of a character classification would be

Accepted Answer

A) Current expenditures. 
B) Salaries. 
C) Public Safety. 
D) Police Department. 
A) Current expenditures. 
B) Salaries. 
C) Public Safety. 
D) Police Department.

Question 2

A county general fund budget includes budgeted revenues of $900 and budgeted expenditures of $890.Actual revenues for the year were $915.To close the Estimated revenues account at the end of the year

Accepted Answer

A) Debit Estimated revenues $15 
B) Credit Estimated revenue $15 
C) Debit Estimated revenues $900 
D) Credit Estimated revenues $900 
A) Debit Estimated revenues $15 
B) Credit Estimated revenue $15 
C) Debit Estimated revenues $900 
D) Credit Estimated revenues $900

Question 3

A city formally adopted a budget at the beginning of the current year.Budgeted revenues were $500 and budgeted expenditures were $490.During the year actual revenues were $520 and actual expenditures were $480.Which of the following statements is true with regard to Fund Balance at the end of the current year.Fund balance at the end of the current year in comparison to fund balance at the end of the preceding year will be

Accepted Answer

A) $10 greater. 
B) $30 greater. 
C) $40 greater. 
D) $50 greater. 
A) $10 greater. 
B) $30 greater. 
C) $40 greater. 
D) $50 greater.

Question 4

During the previous year, Bane County closed its Encumbrances account.At the end of the previous year there were $5,000 in outstanding purchase commitments.To restore these commitments to the accounts, which of the following entries would be required?

Accepted Answer

A) Debit Reserve for encumbrances $5,000; Credit Encumbrances $5,000. 
B) Debit Encumbrances $5,000; Credit Reserve for encumbrances $5,000. 
C) Debit Encumbrances $5,000; Credit Fund balance $5,000 
D) Debit Fund balance $5,000; Credit Reserve for encumbrances $5,000. 
A) Debit Reserve for encumbrances $5,000; Credit Encumbrances $5,000. 
B) Debit Encumbrances $5,000; Credit Reserve for encumbrances $5,000. 
C) Debit Encumbrances $5,000; Credit Fund balance $5,000 
D) Debit Fund balance $5,000; Credit Reserve for encumbrances $5,000.

Question 5

Which of the following is NOT a reason that legally adopted budgets may not be readily comparable to amounts reported in the GAAP-based financial statements?

Accepted Answer

A) Differences in Basis of Accounting. 
B) Differences in Timing. 
C) Differences in Reporting Entity. 
D) Differences in Recognition. 
A) Differences in Basis of Accounting. 
B) Differences in Timing. 
C) Differences in Reporting Entity. 
D) Differences in Recognition.

Question 6

When budgets are integrated into a government's accounting system, estimated revenues are debited.

Accepted Answer

A) True 
 B)False

Question 7

Most budgets are prepared on a cash or modified cash basis.

Accepted Answer

A) True 
 B)False

Question 8

Cash-basis budgets help governments focus on interperiod equity.

Accepted Answer

A) True 
 B)False

Question 9

For which of the following funds would flexible budgeting be most valuable?

Accepted Answer

A) Special revenue fund. 
B) Capital project fund. 
C) Agency fund. 
D) Enterprise fund. 
A) Special revenue fund. 
B) Capital project fund. 
C) Agency fund. 
D) Enterprise fund.

Question 10

Which of the following is NOT true about cash basis budgeting?

Accepted Answer

A) Cash basis budgeting permits a government to balance its budget by delaying cash disbursements. 
B) Cash basis budgeting permits a government to balance its budget by advancing the recognition of revenue. 
C) Cash basis budgeting encourages interperiod equity. 
D) Cash basis budgeting complicates financial accounting and reporting. 
A) Cash basis budgeting permits a government to balance its budget by delaying cash disbursements. 
B) Cash basis budgeting permits a government to balance its budget by advancing the recognition of revenue. 
C) Cash basis budgeting encourages interperiod equity. 
D) Cash basis budgeting complicates financial accounting and reporting.

Question 11

Neither the GASB not the FASB set standards for budgetary accounting.

Accepted Answer

A) True 
 B)False

Question 12

The City of Denton uses encumbrance accounting to control expenditures.It charges the cost of outstanding purchase commitments to expenditures in the year they are received, not in the year they are ordered.If the City had $11,000 of purchase commitments outstanding at the end of Year 1 and received those goods during Year 2 at a cost of $11,700, what would be the impact on total Fund Balance for Year 2?

Accepted Answer

A) Total fund balance at the end of Year 2 would be $11,700 less than at the end of Year 1. 
B) Total fund balance at the end of Year 2 would be $700 less than at the end of Year 1. 
C) Total fund balance at the end of Year 2 would be $700 greater than at the end of Year 1. 
D) Total fund balance at the end of Year 2 would be same as it was at the end of Year 1. 
A) Total fund balance at the end of Year 2 would be $11,700 less than at the end of Year 1. 
B) Total fund balance at the end of Year 2 would be $700 less than at the end of Year 1. 
C) Total fund balance at the end of Year 2 would be $700 greater than at the end of Year 1. 
D) Total fund balance at the end of Year 2 would be same as it was at the end of Year 1.

Question 13

When Spruce City receives goods at a cost of $9,700 that were encumbered in the prior year for $10,000, which of the following entries are required assume that encumbrances lapse at year end?

Accepted Answer

A) Debit Expenditures $9,700; Credit Accounts payable $9,700; no entry for Encumbrances. 
B) Debit Expenditures $9,700 and Reserve for encumbrances $10,000; Credit Accounts payable $9,700 and Encumbrances $10,000. 
C) Debit Expenditures $10,000 and Reserve for encumbrances $10,000; Credit Accounts payable $10,000 and Encumbrances $10,000. 
D) Debit Reserve for encumbrances $10,000; Credit Encumbrances $10,000; no entry for Expenditures. 
A) Debit Expenditures $9,700; Credit Accounts payable $9,700; no entry for Encumbrances. 
B) Debit Expenditures $9,700 and Reserve for encumbrances $10,000; Credit Accounts payable $9,700 and Encumbrances $10,000. 
C) Debit Expenditures $10,000 and Reserve for encumbrances $10,000; Credit Accounts payable $10,000 and Encumbrances $10,000. 
D) Debit Reserve for encumbrances $10,000; Credit Encumbrances $10,000; no entry for Expenditures.

Question 14

State and local government's budget to actual comparisons present both original and final budget amounts.

Accepted Answer

A) True 
 B)False

Question 15

Which branch of local city and county government most commonly prepares the budget?

Accepted Answer

A) Executive branch. 
B) Legislative branch. 
C) Judicial branch. 
D) None of the above. 
A) Executive branch. 
B) Legislative branch. 
C) Judicial branch. 
D) None of the above.

Question 16

Which of the following is the primary reason why governments formally integrate their legally adopted budget into their accounting systems?

Accepted Answer

A) It is required by GASB. 
B) It enables the government to better control its expenditures. 
C) It keeps the government from overspending its budget. 
D) It helps a government by letting it know when it is in danger of overspending its budget. 
A) It is required by GASB. 
B) It enables the government to better control its expenditures. 
C) It keeps the government from overspending its budget. 
D) It helps a government by letting it know when it is in danger of overspending its budget.

Question 17

Property taxes levied on the citizens of the Hill County would most appropriately be budgeted in which of the following budgets?

Accepted Answer

A) Operating budget. 
B) Capital budget. 
C) Flexible budget. 
D) All of the above. 
A) Operating budget. 
B) Capital budget. 
C) Flexible budget. 
D) All of the above.

Question 18

Which of the following is the best reason for preparing budgets for governmental entities on the cash basis?

Accepted Answer

A) Cash basis budgeting helps to achieve interperiod equity. 
B) Cash basis budgeting helps to ensure that the government will receive no more in revenues than it is required to disburse. 
C) Cash basis budgeting helps a government plan to have cash on hand to pay bills 
D) Cash basis budgeting more accurately reflects the economic impact of fiscal activities. 
A) Cash basis budgeting helps to achieve interperiod equity. 
B) Cash basis budgeting helps to ensure that the government will receive no more in revenues than it is required to disburse. 
C) Cash basis budgeting helps a government plan to have cash on hand to pay bills 
D) Cash basis budgeting more accurately reflects the economic impact of fiscal activities.

Question 19

Not-for-profit budgets focus first on revenues and secondarily on expenditures.

Accepted Answer

A) True 
 B)False

Question 20

To close Encumbrances at the end of the year which of the following entries should be made?

Accepted Answer

A) Debit Encumbrances; Credit Fund balance. 
B) Debit Reserve for encumbrances; Credit Encumbrances. 
C) Debit Fund balance; Credit Encumbrances. 
D) No closing entry needed. 
A) Debit Encumbrances; Credit Fund balance. 
B) Debit Reserve for encumbrances; Credit Encumbrances. 
C) Debit Fund balance; Credit Encumbrances. 
D) No closing entry needed.

Expenditures should be budgeted by "character." An example of a character classification would be

A county general fund budget includes budgeted revenues of $900 and budgeted expenditures of $890.Actual revenues for the year were $915.To close the Estimated revenues account at the end of the year

During the previous year, Bane County closed its Encumbrances account.At the end of the previous year there were $5,000 in outstanding purchase commitments.To restore these commitments to the accounts, which of the following entries would be required?

Which of the following is NOT a reason that legally adopted budgets may not be readily comparable to amounts reported in the GAAP-based financial statements?

When budgets are integrated into a government's accounting system, estimated revenues are debited.

Most budgets are prepared on a cash or modified cash basis.

Cash-basis budgets help governments focus on interperiod equity.

For which of the following funds would flexible budgeting be most valuable?

Which of the following is NOT true about cash basis budgeting?

Neither the GASB not the FASB set standards for budgetary accounting.

When Spruce City receives goods at a cost of $9,700 that were encumbered in the prior year for $10,000, which of the following entries are required assume that encumbrances lapse at year end?

State and local government's budget to actual comparisons present both original and final budget amounts.

Which branch of local city and county government most commonly prepares the budget?

Which of the following is the primary reason why governments formally integrate their legally adopted budget into their accounting systems?

Property taxes levied on the citizens of the Hill County would most appropriately be budgeted in which of the following budgets?

Which of the following is the best reason for preparing budgets for governmental entities on the cash basis?

Not-for-profit budgets focus first on revenues and secondarily on expenditures.

To close Encumbrances at the end of the year which of the following entries should be made?

The Government and Not-For-Profit Environment

Fund Accounting

Recognizing Revenues in Governmental Funds

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 3: Issues of Budgeting and Control

Expenditures should be budgeted by "character." An example of a character classification would be

A county general fund budget includes budgeted revenues of $900 and budgeted expenditures of $890.Actual revenues for the year were $915.To close the Estimated revenues account at the end of the year

During the previous year, Bane County closed its Encumbrances account.At the end of the previous year there were $5,000 in outstanding purchase commitments.To restore these commitments to the accounts, which of the following entries would be required?

Which of the following is NOT a reason that legally adopted budgets may not be readily comparable to amounts reported in the GAAP-based financial statements?

When budgets are integrated into a government's accounting system, estimated revenues are debited.

Most budgets are prepared on a cash or modified cash basis.

Cash-basis budgets help governments focus on interperiod equity.

For which of the following funds would flexible budgeting be most valuable?

Which of the following is NOT true about cash basis budgeting?

Neither the GASB not the FASB set standards for budgetary accounting.

When Spruce City receives goods at a cost of $9,700 that were encumbered in the prior year for $10,000, which of the following entries are required assume that encumbrances lapse at year end?

State and local government's budget to actual comparisons present both original and final budget amounts.

Which branch of local city and county government most commonly prepares the budget?

Which of the following is the primary reason why governments formally integrate their legally adopted budget into their accounting systems?

Property taxes levied on the citizens of the Hill County would most appropriately be budgeted in which of the following budgets?

Which of the following is the best reason for preparing budgets for governmental entities on the cash basis?

Not-for-profit budgets focus first on revenues and secondarily on expenditures.

To close Encumbrances at the end of the year which of the following entries should be made?

The Government and Not-For-Profit Environment

Fund Accounting

Recognizing Revenues in Governmental Funds

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