Exam 24: Governmental Accounting: Basic Principles and the General Fund

The three types of trust funds that exist in governmental accounting are __________________________ funds, __________________________ funds, and __________________________ funds.

Interfund payables and receivables are presented in presenting individual fund balance sheets.

_____ For governmental funds, the operating statement used at the fund-based reporting level is, in essence, a

The operating statement for governmental funds is essentially a statement of cash flows.

When the entry recording the budget is reversed at year-end, the Budgetary Fund Balance Reserved for Encumbrances account is debited.

_____ The Board of Commissioners of Vane City adopted its budget for the year ending 7/31/06, comprising estimated revenues of $30,000,000 and appropriations of $29,000,000. What entry should be made for the budgeted excess of revenues over appropriations?

A major reason the modified accrual basis of accounting is used for "governmental" funds is that many expenditures are not susceptible to being accrued.

A commitment made to acquire goods or services is referred to as a(n) ___________________________________ in governmental accounting.

The entry to remove the budgetary accounts relating to encumbrances outstanding at year-end requires a credit to the Encumbrances account.

A liability for compensated absences that is created during the current period but that is not expected to be paid for several years would not result in the reporting of Expenditures in the current-period operating statement of the General Fund-at the fund-based reporting level.

_____ The following balances appeared in the City of Reedbury's General fund at 6/30/06: Dr.(Cr.) Encumbrances-current year \2 00,000 Expenditures: Current year 3,000,000 Fund Balance Reserved for Encumbrances: 100,000 Prior year Current year (200,000) Prior year None Reedsbury maintains its General Fund books on a legal budgetary basis, requiring revenues and expenditures to be accounted for on a modified-accrual basis. In addition, the sum of current-year expenditures and encumbrances cannot exceed current-year appropriations. What total amount of expenditures (and encumbrances, if appropriate) should the city report in the General Fund Statement of Revenues, Expenditures, and Changes in Fund Balance for the year ended 6/30/06?

In the normal course of operations, encumbrances will eventually be recorded as _____________________________________.

_____ Which of the following items could not result in an interfund transaction?

_____ What is the normal balance of the following accounts? Estimated Revenues Appropriations a. Debit Debit b. Debit Credit c. Credit Debit d. Credit Credit

Under the modified accrual basis of accounting, expenditures are recognized when the liability is incurred-not when the fund liability is incurred.

Proprietary funds can have revenues only from entities or individuals outside the governmental unit.

The Fund Balance-Reserved for Encumbrances account is a budgetary account.

Depreciation expense is never reported in the operating statement of any of the governmental funds at the fund-based reporting level.

For governmental funds, capital maintenance is measured instead of net income.

_____ The Appropriations account of a governmental unit is credited when