Question 1

List the basic financial statements required by GASB standards and briefly explain their purposes.

Accepted Answer

The basic financial statements include two government-wide financial statements, seven fund financial statements, and notes thereto. The government-wide statements are a statement of net position and statement of activities designed to report on the operational accountability of the government as a whole. The fund financial statements that follow are designed to report on the government's fiscal accountability for spending according to legal budgets, laws, and agreements with resource providers. A balance sheet and statement of revenues, expenditures, and changes in fund balance are required for governmental-type funds, as well as a reconciliation of the change in fund balances to change in net position at the government-wide level. A statement of net position; a statement of revenues, expenses, and changes in fund net position; and statement of cash flows are required for proprietary-type funds. A statement of net position and statement of changes in net position are required for fiduciary funds.

Question 2

Which of the following activities is considered a core government activity?

Accepted Answer

A)  Finance and budget. 
B)  Central purchasing. 
C)  Culture and recreation. 
D)  Employee pension fund. 
A)  Finance and budget. 
B)  Central purchasing. 
C)  Culture and recreation. 
D)  Employee pension fund. C

Question 3

In accordance with GASB standards, a deferred inflow of resources is reported on the financial statements the same as an unearned revenue.

Accepted Answer

A) True 
 B)False  False

Question 4

The types of funds that may be used in governmental accounting are classified into the three categories of governmental, proprietary, and fiduciary.

Accepted Answer

A) True 
 B)False

Question 5

All capital assets acquired by or used by a fund should be reported in the fund balance sheet or statement of net position.

Accepted Answer

A) True 
 B)False

Question 6

Under the modified accrual basis of accounting, revenues should be recognized when

Accepted Answer

A)  Earned. 
B)  Collected in cash. 
C)  Authorized by the budget ordinance. 
D)  Measurable and available. 
A)  Earned. 
B)  Collected in cash. 
C)  Authorized by the budget ordinance. 
D)  Measurable and available.

Question 7

A permanent endowment is an example of a nonspendable fund balance.

Accepted Answer

A) True 
 B)False

Question 8

Assigned fund balances can be either positive or negative.

Accepted Answer

A) True 
 B)False

Question 9

A major governmental fund is one that has one or more elements (e.g., assets, liabilities, revenues, or expenditures) that is at least:

Accepted Answer

A)  Five percent of the corresponding element(s) of total governmental funds and 10 percent of the corresponding element(s) of total governmental and enterprise funds combined. 
B)  Ten percent of the corresponding element(s) of total governmental funds and 10 percent of the corresponding element(s) of total governmental and enterprise funds combined. 
C)  Five percent of the corresponding element(s) of total governmental funds and five percent of the corresponding element(s) of total governmental and enterprise funds combined. 
D)  Ten percent of the corresponding element(s) of total governmental funds and 5 percent of the corresponding element(s) of total governmental and enterprise funds combined. 
A)  Five percent of the corresponding element(s) of total governmental funds and 10 percent of the corresponding element(s) of total governmental and enterprise funds combined. 
B)  Ten percent of the corresponding element(s) of total governmental funds and 10 percent of the corresponding element(s) of total governmental and enterprise funds combined. 
C)  Five percent of the corresponding element(s) of total governmental funds and five percent of the corresponding element(s) of total governmental and enterprise funds combined. 
D)  Ten percent of the corresponding element(s) of total governmental funds and 5 percent of the corresponding element(s) of total governmental and enterprise funds combined.

Question 10

Which of the following funds would be used to account for an activity that provides centralized purchasing and sales of goods or services to other departments or agencies of the government on a cost-reimbursement basis?

Accepted Answer

A)  Enterprise fund. 
B)  Fiduciary fund. 
C)  Internal service fund. 
D)  Permanent fund. 
A)  Enterprise fund. 
B)  Fiduciary fund. 
C)  Internal service fund. 
D)  Permanent fund.

Question 11

In accounting for state and local governments the modified accrual basis is required for

Accepted Answer

A)  Proprietary and fiduciary funds. 
B)  Governmental funds. 
C)  Governmental and fiduciary funds. 
D)  Governmental and internal service funds. 
A)  Proprietary and fiduciary funds. 
B)  Governmental funds. 
C)  Governmental and fiduciary funds. 
D)  Governmental and internal service funds.

Question 12

An expenditure is an example of what the GASB terms an outflow of resources.

Accepted Answer

A) True 
 B)False

Question 13

The measurement focus and basis of accounting that are most unlike those used by business entities are those used by

Accepted Answer

A)  Governmental funds. 
B)  Fiduciary funds. 
C)  Proprietary funds. 
D)  Contribution funds. 
A)  Governmental funds. 
B)  Fiduciary funds. 
C)  Proprietary funds. 
D)  Contribution funds.

Question 14

Under GASB standards which of the following funds can report a positive amount for unassigned fund balance?

Accepted Answer

A)  Capital projects fund. 
B)  Special revenue fund. 
C)  General Fund. 
D)  All of the options. 
A)  Capital projects fund. 
B)  Special revenue fund. 
C)  General Fund. 
D)  All of the options.

Question 15

Only those governmental and proprietary funds that meet the GASB size criteria for major funds are reported in separate columns of the governmental and proprietary fund financial statements.

Accepted Answer

A) True 
 B)False

Question 16

For each of the following scenarios, indicate how they would be classified for fund balance reporting purposes using the classification list.
A.	Nonspendable
B.	Restricted
C.	Committed
D.	Assigned
E.	Unassigned
________ 1.	Bond proceeds of $15,000,000 that must be used for construction of a fire substation remain unspent at the end of the fiscal year.
________ 2.	Prepaid rent of $6,000 remains at the end of the fiscal year.
________ 3.	The city council adopted a plan to set aside 2% of revenues over the next three years to help build cash reserves. At the end of the fiscal year 2% of the revenues were set aside.
________ 4.	The state transportation department provided $1,000,000 in state funds to be used for street widening. At the end of the fiscal year $750,000 remained unspent.
________ 5.	The county received a $3,000,000 endowment during the year.

Accepted Answer

1. B
 2.

Question 17

Which of the following is a proprietary fund?

Accepted Answer

A)  Special revenue fund. 
B)  Investment trust fund. 
C)  Debt service fund. 
D)  Internal service fund. 
A)  Special revenue fund. 
B)  Investment trust fund. 
C)  Debt service fund. 
D)  Internal service fund.

Question 18

The GASB concept statements indicate that in certain instances a remeasured value for an asset or liability should be reported on the financial statements. Which of the following is not one of the methods recommended by the GASB for remeasured amounts?

Accepted Answer

A)  Historical cost. 
B)  Lower of cost or market. 
C)  Fair value. 
D)  Replacement cost. 
A)  Historical cost. 
B)  Lower of cost or market. 
C)  Fair value. 
D)  Replacement cost.

Question 19

Proprietary funds primarily provide services to the general public for a fee.

Accepted Answer

A) True 
 B)False

Question 20

The activities of a water utility department, which offers its services to the general public on a user charge basis, should be accounted for in

Accepted Answer

A)  An enterprise fund. 
B)  A special revenue fund. 
C)  The General Fund. 
D)  An internal service fund. 
A)  An enterprise fund. 
B)  A special revenue fund. 
C)  The General Fund. 
D)  An internal service fund.

List the basic financial statements required by GASB standards and briefly explain their purposes.

Which of the following activities is considered a core government activity?

In accordance with GASB standards, a deferred inflow of resources is reported on the financial statements the same as an unearned revenue.

The types of funds that may be used in governmental accounting are classified into the three categories of governmental, proprietary, and fiduciary.

All capital assets acquired by or used by a fund should be reported in the fund balance sheet or statement of net position.

Under the modified accrual basis of accounting, revenues should be recognized when

A permanent endowment is an example of a nonspendable fund balance.

Assigned fund balances can be either positive or negative.

A major governmental fund is one that has one or more elements (e.g., assets, liabilities, revenues, or expenditures) that is at least:

Which of the following funds would be used to account for an activity that provides centralized purchasing and sales of goods or services to other departments or agencies of the government on a cost-reimbursement basis?

In accounting for state and local governments the modified accrual basis is required for

An expenditure is an example of what the GASB terms an outflow of resources.

The measurement focus and basis of accounting that are most unlike those used by business entities are those used by

Under GASB standards which of the following funds can report a positive amount for unassigned fund balance?

Only those governmental and proprietary funds that meet the GASB size criteria for major funds are reported in separate columns of the governmental and proprietary fund financial statements.

Which of the following is a proprietary fund?

The GASB concept statements indicate that in certain instances a remeasured value for an asset or liability should be reported on the financial statements. Which of the following is not one of the methods recommended by the GASB for remeasured amounts?

Proprietary funds primarily provide services to the general public for a fee.

The activities of a water utility department, which offers its services to the general public on a user charge basis, should be accounted for in

Introduction to Accounting and Financial Reporting for Government and Not-for-Profit Entities

Governmental Operating Statement Accounts; Budgetary Accounting

Accounting for Governmental Operating Activities–Illustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-type Activities of State and Local Governments

Accounting for Fiduciary Activities—Custodial and Trust Funds

Financial Reporting of State and Local Governments

Analysis of Government Financial Performance

Auditing of Government and Not-for-Profit Organizations

Budgeting and Performance Measurement

Not-for-Profit Organizations—Regulatory, Taxation, and Performance Issues

Accounting for Not-for-Profit Organizations

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government

Filters

Exam 2: Principles of Accounting and Financial Reporting for State and Local Governments

List the basic financial statements required by GASB standards and briefly explain their purposes.

Which of the following activities is considered a core government activity?

In accordance with GASB standards, a deferred inflow of resources is reported on the financial statements the same as an unearned revenue.

The types of funds that may be used in governmental accounting are classified into the three categories of governmental, proprietary, and fiduciary.

All capital assets acquired by or used by a fund should be reported in the fund balance sheet or statement of net position.

Under the modified accrual basis of accounting, revenues should be recognized when

A permanent endowment is an example of a nonspendable fund balance.

Assigned fund balances can be either positive or negative.

A major governmental fund is one that has one or more elements (e.g., assets, liabilities, revenues, or expenditures) that is at least:

Which of the following funds would be used to account for an activity that provides centralized purchasing and sales of goods or services to other departments or agencies of the government on a cost-reimbursement basis?

In accounting for state and local governments the modified accrual basis is required for

An expenditure is an example of what the GASB terms an outflow of resources.

The measurement focus and basis of accounting that are most unlike those used by business entities are those used by

Under GASB standards which of the following funds can report a positive amount for unassigned fund balance?

Only those governmental and proprietary funds that meet the GASB size criteria for major funds are reported in separate columns of the governmental and proprietary fund financial statements.

Which of the following is a proprietary fund?

The GASB concept statements indicate that in certain instances a remeasured value for an asset or liability should be reported on the financial statements. Which of the following is not one of the methods recommended by the GASB for remeasured amounts?

Proprietary funds primarily provide services to the general public for a fee.

The activities of a water utility department, which offers its services to the general public on a user charge basis, should be accounted for in

Introduction to Accounting and Financial Reporting for Government and Not-for-Profit Entities

Governmental Operating Statement Accounts; Budgetary Accounting

Accounting for Governmental Operating Activities–Illustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-type Activities of State and Local Governments

Accounting for Fiduciary Activities—Custodial and Trust Funds

Financial Reporting of State and Local Governments

Analysis of Government Financial Performance

Auditing of Government and Not-for-Profit Organizations

Budgeting and Performance Measurement

Not-for-Profit Organizations—Regulatory, Taxation, and Performance Issues

Accounting for Not-for-Profit Organizations

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government

Filters