Exam 6: Proprietary Funds

Municipal solid waste landfills,when accounted for as proprietary funds,record a liability for closure and post-closure care costs; recording expenses on a units of production basis.

When estimating uncollectible accounts,an enterprise fund will record a debit to Bad Debt Expense and a credit to Accumulated Provision for Uncollectible Accounts.

Revenue bonds sold by a water utility fund,upon sale,would be recorded in an enterprise fund as:

The most numerous and important enterprise services rendered by local governments are public utilities.

Which of the following is not correct regarding the GASB Cash Flow Statement?

GASB requires that the reconciliation of income and cash flows from operations starts with operating income.

If a government decides to account for its risk management activities in a single fund,it must use:

An internal service fund provided services to a General Fund department.At the time of billing,the credit entry in the internal service fund would be:

What is the appropriate accounting for the signing of a contract to build a new water treatment facility by an Enterprise Fund?

Under GASB Statement 34,enterprise funds must be used under which circumstances?

According to GASB 34,Enterprise funds must be used when:

Which of the following is true regarding the Statement of Cash Flows required by the GASB for proprietary funds?

The Balance Sheet and the Statement of Revenues,Expenditures,and Changes in Fund Balances are required for Proprietary funds.

Proprietary funds use the economic resources measurement focus and accrual basis of accounting.

How should customer deposits held for water meters that cannot be spent for operating purposes be classified?

Montgomery County operates a landfill as an enterprise fund.The closure and postclosure care costs are estimated to be $24 million.It is estimated that the capacity of the landfill is 12 million tons of waste and that waste will be accepted for 4 years.During 2014,2.9 million tons of waste was accepted.The charge for closure and postclosure care costs for 2014 would be:

Restricted Net Assets for a proprietary fund:

The Water Utility (an enterprise fund)has just sent out a purchase order to a vendor for some new equipment.Which of the following would be included in the journal entry to record this event?

Activities that produce goods or services to be provided to other departments or other governmental units on a cost-reimbursement basis are accounted for by enterprise funds.

Which of the following is not true regarding proprietary funds?