Exam 2: The Use of Funds in Governmental Accounting

Property taxes are recognized as revenues in governmental type funds to the extent that they are collected in the year for which they are levied.

Governmental-type funds use the current financial resources measurement focus and the modified accrual basis of accounting.

For financial reporting purposes, operating transfers from the General Fund to another fund are generally reported in a separate section of the operating statements for each of the funds.

A county collects property taxes not only for itself, but also on behalf of all cities within the county. What type of fund should the county use to account for the property taxes held for the cities?

Enterprise Funds are financed to some degree through charges to external users.

For financial reporting, current assets and liabilities are separated from noncurrent assets and liabilities in the balance sheets of Enterprise Funds.

All the long-term debt of a government, including the long-term debt that will be financed by Enterprise Fund revenues, is reported in the fund-level financial statements.

A General Fund has total liabilities in excess of its total assets at the end of the fiscal year. It has no deferred resource inflows or outflows. Which of the following statements is always true?

To determine whether they have obtained sufficient revenues to cover their expenses, funds that account for governmental business-type activities use the modified accrual basis of accounting.

Depreciation of capital assets is not recognized as an expense in a Special Revenue Fund, but it is recognized as an expense in an Internal Service Fund.