Question 1

The amount of sick leave expense that should appear on the government-wide financial statements for the fiscal year ended 6/30/15 is

Accepted Answer

A) $2.8 million. 
B) $2.6 million. 
C) $1.2 million. 
D) $1.4 million. 
A) $2.8 million. 
B) $2.6 million. 
C) $1.2 million. 
D) $1.4 million.

Question 2

Employees of the City of Orleans earn ten days paid leave for each 12 months of employment.The city has a policy that employees must take their vacation days during the year following the year in which they are earned.If they do not take vacation in the allotted period, they forfeit the vacation pay benefit.Traditionally, employees have taken 80 percent of the vacation days earned.During the current year, city employees earned $600,000 in vacation pay.Assuming the city maintains its books and records in a manner to facilitate the preparation of government-wide financial statements, which of the following entries should be made to record the vacation pay earned during the current period?

Accepted Answer

A) Debit Expenditures $600,000; credit Vacation payable $600,000. 
B) Debit Expenses $600,000; credit Vacation payable $600,000. 
C) Debit Expenses $480,000; credit Vacation pay payable $480,000. 
D) No entry required. 
A) Debit Expenditures $600,000; credit Vacation payable $600,000. 
B) Debit Expenses $600,000; credit Vacation payable $600,000. 
C) Debit Expenses $480,000; credit Vacation pay payable $480,000. 
D) No entry required.

Question 3

Sugar City uses the purchases method to record all prepayments.The city has a 6/30 fiscal year-end.On 12/31/14, the city purchased a three-year insurance policy covering all city owned vehicles acquired by the general fund to be used in general government activities.Cost of the policy was $360,000.After the 6/30/15 closing entries, the appropriate balance sheet accounts and balances in the city's general fund associated with this transaction are

Accepted Answer

A) Prepaid insurance $300,000; Expenditures $60,000. 
B) Prepaid insurance $300,000; Expenditures $360,000 
C) Prepaid insurance $0; Expenditures $360,000. 
D) Prepaid insurance $0; Expenditures $60,000. 
A) Prepaid insurance $300,000; Expenditures $60,000. 
B) Prepaid insurance $300,000; Expenditures $360,000 
C) Prepaid insurance $0; Expenditures $360,000. 
D) Prepaid insurance $0; Expenditures $60,000.

Question 4

As used in government accounting, expenditures are decreases in

Accepted Answer

A) Net assets. 
B) Net current financial resources. 
C) Net cash. 
D) Net economic resources. 
A) Net assets. 
B) Net current financial resources. 
C) Net cash. 
D) Net economic resources.

Question 5

State Community College, a public college, grants faculty members a one-year sabbatical leave after each seven years of service.There are no requirements for research, study, or service during the compensated sabbatical leave.A particular faculty member earns $40,000 per year.Assuming that the college maintains its books and records in a manner that facilitates the preparation of government-wide financial statements and assuming that any appropriate accruals have been made, what is the appropriate entry to record the employee's salary paid while on sabbatical?

Accepted Answer

A) Debit Expenditures $40,000; Credit Cash $40,000. 
B) Debit Sabbatical leave payable $40,000; Credit Cash $40,000. 
C) Debit Expenditures $40,000; Credit Cash $40,00 
D) No entry required. 
A) Debit Expenditures $40,000; Credit Cash $40,000. 
B) Debit Sabbatical leave payable $40,000; Credit Cash $40,000. 
C) Debit Expenditures $40,000; Credit Cash $40,00 
D) No entry required.

Question 6

Other financing sources/uses would appear on which of the following statements?

Accepted Answer

A) Balance sheet. 
B) Statement of revenues, expenditures, and changes in fund balances. 
C) Cash flows statement. 
D) None of the above. 
A) Balance sheet. 
B) Statement of revenues, expenditures, and changes in fund balances. 
C) Cash flows statement. 
D) None of the above.

Question 7

The purchases method is consistent with full accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The amount of pension expenditures that a government should recognize in its general fund financial statements during the current year is

Accepted Answer

A) The amount paid. 
B) The amount paid plus the amount that will be paid with available expendable financial resources. 
C) The amount paid so long as it does not exceed the contractually agreed amount. 
D) The contractually agreed amount. 
A) The amount paid. 
B) The amount paid plus the amount that will be paid with available expendable financial resources. 
C) The amount paid so long as it does not exceed the contractually agreed amount. 
D) The contractually agreed amount.

Question 10

Prepaid expenses such as for insurance are classified as deferred outflows, rather than as assets.

Accepted Answer

A) True 
 B)False

Question 11

State Community College, a public college, grants faculty members a one-year sabbatical leave after each seven years of service.There are no requirements for research, study, or service during the compensated sabbatical leave.A particular faculty member earns $40,000 per year.Assuming that the college maintains its books and records in a manner that facilitates the preparation of fund financial statements and assuming that any appropriate accruals have been made, what is the appropriate entry to record the employee's salary paid while on sabbatical?

Accepted Answer

A) Debit Expenditures $40,000; Credit Cash $40,000. 
B) Debit Sabbatical leave payable $40,000; Credit Cash $40,000. 
C) Debit Expenditures $40,000; Credit Sabbatical leave payable $40,000. 
D) No entry required. 
A) Debit Expenditures $40,000; Credit Cash $40,000. 
B) Debit Sabbatical leave payable $40,000; Credit Cash $40,000. 
C) Debit Expenditures $40,000; Credit Sabbatical leave payable $40,000. 
D) No entry required.

Question 12

Campbell County uses the consumption method to record all inventories and prepayments.The County has a 9/30 fiscal year-end.On April 1, 2015, the county purchased a two-year insurance policy at a total cost of $400,000, paying for the policy out of the general fund.In the fund financial statements, the amount of insurance expenditures for the fiscal year ended 9/30/15 would be

Accepted Answer

A) $400,000. 
B) $300,000. 
C) $200,000. 
D) $100,000. 
A) $400,000. 
B) $300,000. 
C) $200,000. 
D) $100,000.

Question 13

Culver City recognizes 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.Per its contractual arrangement, the city's required contribution to the State Pension Plan for the fiscal year ended 6/30/15 is $5 million.Due to cash inflow shortages the city, which budgeted $5 million for pension contributions, paid only $4 million in the fiscal year ended 6/30/15.The city paid the remaining amount on September 30, 2015.Assuming the city maintains its books and records in a manner that facilitates the preparation of government-wide financial statements, how should the city record the pension contribution and any associated liability for the year ended 6/10/15?

Accepted Answer

A) Debit Expenditures $5 million; Credit Cash $4 million and Pension contribution payable $1 million. 
B) Debit Expenses $5 million; Credit Cash $4 million and Pension contribution payable $1 million. 
C) Debit Expenditures $4 million; Credit Cash $4 million. 
D) Debit Expenses $4 million; Credit Cash $4 million. 
A) Debit Expenditures $5 million; Credit Cash $4 million and Pension contribution payable $1 million. 
B) Debit Expenses $5 million; Credit Cash $4 million and Pension contribution payable $1 million. 
C) Debit Expenditures $4 million; Credit Cash $4 million. 
D) Debit Expenses $4 million; Credit Cash $4 million.

Question 14

Assume that the City of Juneau maintains its books and records to facilitate the preparation of its government-wide financial statements.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 $90,000 on Monday, Tuesday, and Wednesday (June 28, 29, and 30).They will earn $60,000 on Thursday and Friday (July 1 and 2).What entry, if any, should be made on June 30?

Accepted Answer

A) Debit Expenditures $90,000; credit Wages and salaries payable $90,000. 
B) Debit Expenditures $150,000; credit Wages and salaries payable $150,000. 
C) Debit Expenses $90,000; credit Wages and salaries payable $90,000. 
D) No entry is required. 
A) Debit Expenditures $90,000; credit Wages and salaries payable $90,000. 
B) Debit Expenditures $150,000; credit Wages and salaries payable $150,000. 
C) Debit Expenses $90,000; credit Wages and salaries payable $90,000. 
D) No entry is required.

Question 15

State employees earn $10 million in vacation leave.$7 million is paid in the current year and the remaining amount is deferred to future years.Which of the following the accounts will be credited in the general fund entry and the government-wide entry?

Accepted Answer

The answer of State employees earn $10 million in vacation...

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

The City of Holbrook transferred $100,000 from the general fund to a debt service fund for payment of interest.The appropriate entry in the general fund to record this transfer would be

Accepted Answer

A) Debit Expenditures $100,000; Credit Cash $100,000. 
B) Debit Nonreciprocal transfer-out $100,000; Credit Cash $100,000. 
C) Debit Fund balance$100,000; Credit Cash $100,000. 
D) Debit Reciprocal transfer-out $100,000; Credit Cash $100,000. 
A) Debit Expenditures $100,000; Credit Cash $100,000. 
B) Debit Nonreciprocal transfer-out $100,000; Credit Cash $100,000. 
C) Debit Fund balance$100,000; Credit Cash $100,000. 
D) Debit Reciprocal transfer-out $100,000; Credit Cash $100,000.

Question 18

Which of the following items is NOT an example of an item that would be reported as Other Financing Sources/Uses in the general fund?

Accepted Answer

A) $10 million received from the issuance of bonds. 
B) $7,000 received from the sale of a used bulldozer. 
C) $200,000 capital lease obligation for a new bulldozer. 
D) $100,000 paid to a Motor Pool Internal Service Fund for automobile usage during the period. 
A) $10 million received from the issuance of bonds. 
B) $7,000 received from the sale of a used bulldozer. 
C) $200,000 capital lease obligation for a new bulldozer. 
D) $100,000 paid to a Motor Pool Internal Service Fund for automobile usage during the period.

Question 19

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 its fund financial statements, at fiscal year-end the appropriate account balances related to supplies expenditures and supplies inventory would be

Accepted Answer

A) Expenditures $600,000; Supplies inventory $200,000. 
B) Expenditures $600,000; Supplies inventory $0. 
C) Expenditures $400,000; Supplies inventory $200,000. 
D) Expenditures $400,000; Supplies inventory $0. 
A) Expenditures $600,000; Supplies inventory $200,000. 
B) Expenditures $600,000; Supplies inventory $0. 
C) Expenditures $400,000; Supplies inventory $200,000. 
D) Expenditures $400,000; Supplies inventory $0.

Question 20

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 $300,000 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 $251,000.In the general fund, at the end of the current fiscal year, Port City should recognize a liability of

Accepted Answer

A) $300,000. 
B) $251,000. 
C) $0. 
D) $75,000. 
A) $300,000. 
B) $251,000. 
C) $0. 
D) $75,000.

The amount of sick leave expense that should appear on the government-wide financial statements for the fiscal year ended 6/30/15 is

As used in government accounting, expenditures are decreases in

Other financing sources/uses would appear on which of the following statements?

The purchases method is consistent with full accrual basis of accounting.

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

The amount of pension expenditures that a government should recognize in its general fund financial statements during the current year is

Prepaid expenses such as for insurance are classified as deferred outflows, rather than as assets.

State employees earn $10 million in vacation leave.$7 million is paid in the current year and the remaining amount is deferred to future years.Which of the following the accounts will be credited in the general fund entry and the government-wide entry?

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

The City of Holbrook transferred $100,000 from the general fund to a debt service fund for payment of interest.The appropriate entry in the general fund to record this transfer would be

Which of the following items is NOT an example of an item that would be reported as Other Financing Sources/Uses in the general fund?

The Government and Not-For-Profit Environment

Fund Accounting

Issues of Budgeting and Control

Recognizing Revenues in Governmental Funds

Accounting for Capital Projects and Debt Service

Capital Assets and Investments in Marketable Securities

Long-Term Obligations

Business-Type Activities

Pensions and Other Fiduciary Activities

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Notforprofit Organizations

Federal Government Accounting

Filters

Exam 5: Recognizing Expenditures in Governmental Funds

The amount of sick leave expense that should appear on the government-wide financial statements for the fiscal year ended 6/30/15 is

As used in government accounting, expenditures are decreases in

Other financing sources/uses would appear on which of the following statements?

The purchases method is consistent with full accrual basis of accounting.

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

The amount of pension expenditures that a government should recognize in its general fund financial statements during the current year is

Prepaid expenses such as for insurance are classified as deferred outflows, rather than as assets.

State employees earn $10 million in vacation leave.$7 million is paid in the current year and the remaining amount is deferred to future years.Which of the following the accounts will be credited in the general fund entry and the government-wide entry?

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

The City of Holbrook transferred $100,000 from the general fund to a debt service fund for payment of interest.The appropriate entry in the general fund to record this transfer would be

Which of the following items is NOT an example of an item that would be reported as Other Financing Sources/Uses in the general fund?

The Government and Not-For-Profit Environment

Fund Accounting

Issues of Budgeting and Control

Recognizing Revenues in Governmental Funds

Accounting for Capital Projects and Debt Service

Capital Assets and Investments in Marketable Securities

Long-Term Obligations

Business-Type Activities

Pensions and Other Fiduciary Activities

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Auditing Governments and Notforprofit Organizations

Federal Government Accounting

Filters