Question 1

Unlike internal service funds,it is frequently desirable for enterprise funds to operate at a profit.

Accepted Answer

A) True 
 B)False

Question 2

Which financial statements are required for a proprietary fund?

Accepted Answer

A)  Income statement, Statement of Net Assets and Statement of Cash Flows 
B)  Statement of Revenues, Expenses and Changes in Net Assets, Statement of Net Assets and Statement of Cash Flows 
C)  Statement of Revenues, Expenses and Changes in Fund Balance and Statement of Net Assets, and Statement of Cash Flows 
D)  Statement of Revenues, Expenses and Changes in Net Assets and Statement of Net Assets 
A)  Income statement, Statement of Net Assets and Statement of Cash Flows 
B)  Statement of Revenues, Expenses and Changes in Net Assets, Statement of Net Assets and Statement of Cash Flows 
C)  Statement of Revenues, Expenses and Changes in Fund Balance and Statement of Net Assets, and Statement of Cash Flows 
D)  Statement of Revenues, Expenses and Changes in Net Assets and Statement of Net Assets

Question 3

Enterprise Funds and Internal Service Funds are part of the larger category of Proprietary Funds.

Accepted Answer

A) True 
 B)False

Question 4

An internal service fund is required whenever an activity is funded by fees or charges from other government departments.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is true regarding proprietary funds?

Accepted Answer

A)  Accruals and deferrals common to business accounting are recorded in proprietary funds. 
B)  Proprietary funds use the modified accrual basis of accounting 
C)  GASB standards require budget-actual reporting for proprietary funds. 
D)  The purchase of a capital asset is recorded as an expenditure in proprietary funds. 
A)  Accruals and deferrals common to business accounting are recorded in proprietary funds. 
B)  Proprietary funds use the modified accrual basis of accounting 
C)  GASB standards require budget-actual reporting for proprietary funds. 
D)  The purchase of a capital asset is recorded as an expenditure in proprietary funds.

Question 6

The following Statement of Cash Receipts and Disbursements was prepared by the bookkeeper of The Anchorage Arboretum Authority.The Arboretum Authority is a component unit of the City of Anchorage and must be included in the City's financial statements.It began operations on January 1,2014 with no outstanding liabilities or commitments and only 2 assets:
 (1)$15,000 cash and (2)land that it had paid $ 23,000 to acquire.
   •The loan from the bank is dated April 1 and is for a five year period.Interest (4% annual rate)is paid on Oct.1 and April 1 of each year,beginning October 1,2014.
•The machinery was purchased on April 1 with the proceeds provided by the bank loan and has an estimated useful life of 10 years.(straight-line basis)
•Supplies on hand amounted to $ 3,760 at December 31,2014.These included $650 of fertilizer that was received on December 29 and paid in January 2015.All other bills and salaries related to 2014 had been paid by close of business on December 31.
Required:
Part A.Prepare a Statement of Revenues,Expenses and Changes in Net Assets for the year ended 12-31-09 for the Arboretum assuming the City plans to account for its activities on the accrual basis.
Part B.Prepare a Statement of Revenues,Expenditures and Changes in Fund Balance for the year ended 12-31-09 for the Arboretum assuming the City plans to account for its activities on the modified accrual basis.

Accepted Answer

The answer of The following Statement of Cash Receipts and...

Question 7

An Enterprise Fund has an indefinite life.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is correct with respect to Internal Service Funds?

Accepted Answer

A)  Internal service funds use accrual accounting and the economic resource measurement focus 
B)  Net Assets (fund equity) are to be reported in two categories: assigned and unassigned 
C)  Internal service funds account for long-term debt but not capital assets 
D)  All of the above are false statements 
A)  Internal service funds use accrual accounting and the economic resource measurement focus 
B)  Net Assets (fund equity) are to be reported in two categories: assigned and unassigned 
C)  Internal service funds account for long-term debt but not capital assets 
D)  All of the above are false statements

Question 9

Proprietary funds use the accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 10

Postclosure costs are recorded in a solid waste landfill enterprise fund at the present value of estimated future costs.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true of the Statement of Net Assets for proprietary funds?

Accepted Answer

A)  a classified format is used in which current assets, noncurrent assets, current liabilities, and noncurrent liabilities are presented separately. 
B)  separate disclosure is required for major enterprise funds and a total for all non-major enterprise funds 
C)  Neither A nor B are correct. 
D)  Both A and B are correct. 
A)  a classified format is used in which current assets, noncurrent assets, current liabilities, and noncurrent liabilities are presented separately. 
B)  separate disclosure is required for major enterprise funds and a total for all non-major enterprise funds 
C)  Neither A nor B are correct. 
D)  Both A and B are correct.

Question 12

In the government-wide statements,enterprise funds are a(n)______ activity,whereas Internal Service funds are typically a(n)______activity.

Accepted Answer

A)  business-type; governmental. 
B)  governmental; business-type. 
C)  restricted; unrestricted. 
D)  unrestricted; restricted. 
A)  business-type; governmental. 
B)  governmental; business-type. 
C)  restricted; unrestricted. 
D)  unrestricted; restricted.

Question 13

For landfills accounted for as enterprise funds,a portion of the estimated cost of closure of solid waste landfills should be charged as an expense and a liability of the landfill operation each year on a:

Accepted Answer

A)  Actual cost method. 
B)  Units-of-production method. 
C)  Estimated cost method. 
D)  None of the above. 
A)  Actual cost method. 
B)  Units-of-production method. 
C)  Estimated cost method. 
D)  None of the above.

Question 14

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

Accepted Answer

A)  Other Financing Sources-Transfers Out. 
B)  Expenditures. 
C)  Operating Revenues-Charges for Services. 
D)  Expenses. 
A)  Other Financing Sources-Transfers Out. 
B)  Expenditures. 
C)  Operating Revenues-Charges for Services. 
D)  Expenses.

Question 15

The Statement of Cash Flows for a proprietary fund would include which of the following?

Accepted Answer

A)  Operating, investing, financing 
B)  Operating, capital and related financing, investing 
C)  Operating, investing, fiduciary and capital related financing activities 
D)  Operating, investing, capital and related financing and noncapital related financing 
A)  Operating, investing, financing 
B)  Operating, capital and related financing, investing 
C)  Operating, investing, fiduciary and capital related financing activities 
D)  Operating, investing, capital and related financing and noncapital related financing

Question 16

The city is using an internal service fund to self-insure its risk financing activities.Claims accrued or paid by this fund are recorded as:

Accepted Answer

A)  Transfers out. 
B)  Operating Expenses. 
C)  Special Items. 
D)  Nonoperating Expenses. 
A)  Transfers out. 
B)  Operating Expenses. 
C)  Special Items. 
D)  Nonoperating Expenses.

Question 17

Which of the following is false regarding the cash flow statements of a proprietary fund?

Accepted Answer

A)  A reconciliation is required between the Statement of Revenues, Expenses, and Changes in Fund Net Assets and the cash flows from operating activities section of the Cash Flow Statement. 
B)  Interest payments are reported as increases in cash flows from either capital and related financing or noncapital financing activities, whichever is appropriate. 
C)  Purchases of equipment would be reported in the investing section. 
D)  None of the above. - these are all true. 
A)  A reconciliation is required between the Statement of Revenues, Expenses, and Changes in Fund Net Assets and the cash flows from operating activities section of the Cash Flow Statement. 
B)  Interest payments are reported as increases in cash flows from either capital and related financing or noncapital financing activities, whichever is appropriate. 
C)  Purchases of equipment would be reported in the investing section. 
D)  None of the above. - these are all true.

Question 18

Capital assets of internal service funds should be reported:

Accepted Answer

A)  In the internal service funds only. 
B)  In the government-wide statements only. 
C)  In both the internal service funds and the government-wide statements. 
D)  None of the above, they are not reported 
A)  In the internal service funds only. 
B)  In the government-wide statements only. 
C)  In both the internal service funds and the government-wide statements. 
D)  None of the above, they are not reported

Question 19

Which of the following is true regarding internal service funds?

Accepted Answer

A)  Internal service funds provide services primarily to external users on a user charge basis. 
B)  Internal service funds normally record the annual budget in the accounts. 
C)  Internal service funds use full accrual accounting. 
D)  Internal service funds' capital assets are not accounted for in the accounts. 
A)  Internal service funds provide services primarily to external users on a user charge basis. 
B)  Internal service funds normally record the annual budget in the accounts. 
C)  Internal service funds use full accrual accounting. 
D)  Internal service funds' capital assets are not accounted for in the accounts.

Question 20

Which of the following is not true regarding enterprise funds?

Accepted Answer

A)  Similar to commercial businesses, enterprise funds equity accounts include both contributed capital and retained earnings. 
B)  A Statement of Revenues, Expenses, and Changes in Fund Net Assets would be the primary operating statement for enterprise funds. 
C)  Enterprise funds' Cash Flow Statements could have up to four categories. 
D)  None of the above; all are true. 
A)  Similar to commercial businesses, enterprise funds equity accounts include both contributed capital and retained earnings. 
B)  A Statement of Revenues, Expenses, and Changes in Fund Net Assets would be the primary operating statement for enterprise funds. 
C)  Enterprise funds' Cash Flow Statements could have up to four categories. 
D)  None of the above; all are true.

Unlike internal service funds,it is frequently desirable for enterprise funds to operate at a profit.

Which financial statements are required for a proprietary fund?

Enterprise Funds and Internal Service Funds are part of the larger category of Proprietary Funds.

An internal service fund is required whenever an activity is funded by fees or charges from other government departments.

Which of the following statements is true regarding proprietary funds?

An Enterprise Fund has an indefinite life.

Which of the following is correct with respect to Internal Service Funds?

Proprietary funds use the accrual basis of accounting.

Postclosure costs are recorded in a solid waste landfill enterprise fund at the present value of estimated future costs.

Which of the following is true of the Statement of Net Assets for proprietary funds?

In the government-wide statements,enterprise funds are a(n) activity,whereas Internal Service funds are typically a(n)activity.

For landfills accounted for as enterprise funds,a portion of the estimated cost of closure of solid waste landfills should be charged as an expense and a liability of the landfill operation each year on a:

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

The Statement of Cash Flows for a proprietary fund would include which of the following?

The city is using an internal service fund to self-insure its risk financing activities.Claims accrued or paid by this fund are recorded as:

Which of the following is false regarding the cash flow statements of a proprietary fund?

Capital assets of internal service funds should be reported:

Which of the following is true regarding internal service funds?

Which of the following is not true regarding enterprise funds?

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Fiduciary Trustfunds

Government-Wide Statements, Capital Assets, Long-Term Debt

Accounting for Special-Purpose Entities, Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Auditing, Tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters

Exam 6: Proprietary Funds

Unlike internal service funds,it is frequently desirable for enterprise funds to operate at a profit.

Which financial statements are required for a proprietary fund?

Enterprise Funds and Internal Service Funds are part of the larger category of Proprietary Funds.

An internal service fund is required whenever an activity is funded by fees or charges from other government departments.

Which of the following statements is true regarding proprietary funds?

An Enterprise Fund has an indefinite life.

Which of the following is correct with respect to Internal Service Funds?

Proprietary funds use the accrual basis of accounting.

Postclosure costs are recorded in a solid waste landfill enterprise fund at the present value of estimated future costs.

Which of the following is true of the Statement of Net Assets for proprietary funds?

In the government-wide statements,enterprise funds are a(n)______ activity,whereas Internal Service funds are typically a(n)______activity.

For landfills accounted for as enterprise funds,a portion of the estimated cost of closure of solid waste landfills should be charged as an expense and a liability of the landfill operation each year on a:

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

The Statement of Cash Flows for a proprietary fund would include which of the following?

The city is using an internal service fund to self-insure its risk financing activities.Claims accrued or paid by this fund are recorded as:

Which of the following is false regarding the cash flow statements of a proprietary fund?

Capital assets of internal service funds should be reported:

Which of the following is true regarding internal service funds?

Which of the following is not true regarding enterprise funds?

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Fiduciary Trustfunds

Government-Wide Statements, Capital Assets, Long-Term Debt

Accounting for Special-Purpose Entities, Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Auditing, Tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters

In the government-wide statements,enterprise funds are a(n) activity,whereas Internal Service funds are typically a(n)activity.