Question 1

The purpose of an encumbrance is to prevent governments from:

Accepted Answer

A)  Overriding Unauthorized Contracts 
B)  Spending in Excess of the Amounts Authorized 
C)  Revising the Approved Budget 
D)  Misappropriating Tax Revenues 
A)  Overriding Unauthorized Contracts 
B)  Spending in Excess of the Amounts Authorized 
C)  Revising the Approved Budget 
D)  Misappropriating Tax Revenues B

Question 2

Revenues of governmental fund types should be recognized when:

Accepted Answer

A)  collected in cash. 
B)  authorized by the budget ordinance. 
C)  taxes become delinquent. 
D)  measurable and available. 
A)  collected in cash. 
B)  authorized by the budget ordinance. 
C)  taxes become delinquent. 
D)  measurable and available. D

Question 3

The Fire Department of a certain city received an appropriation in the amount of $13,000,000 for the fiscal year ended December 31,2014.During the month ended January 31,2014,the following transactions occurred: (a)purchase orders were issued in the amount of $400,000; (b)purchase orders,related to (a)above,were filled in the amount of $380,000; the related invoice amount was $368,000; invoices were paid in the amount of $350,000; (c)salaries were accrued and paid in the amount of $575,000; (d)the appropriation was increased in amount of $100,000.The amount available for the Fire Department as of January 31,2014 would be:

Accepted Answer

A)  $11,787,000. 
B)  $12,077,000. 
C)  $12,057,000. 
D)  $12,137,000. 
A)  $11,787,000. 
B)  $12,077,000. 
C)  $12,057,000. 
D)  $12,137,000. D

Question 4

Encumbrances are often deemed unnecessary for recurring expenditures such as payroll.

Accepted Answer

A) True 
 B)False

Question 5

Governmental Funds Fund Balance is displayed in which of the following categories?

Accepted Answer

A)  Nonspendable, Spendable, Assigned, Unassigned 
B)  Nonspendable, Restricted, Unrestricted 
C)  Restricted, Unrestricted, Assigned, Unassigned 
D)  Nonspendable, Restricted, Committed, Assigned, Unassigned 
A)  Nonspendable, Spendable, Assigned, Unassigned 
B)  Nonspendable, Restricted, Unrestricted 
C)  Restricted, Unrestricted, Assigned, Unassigned 
D)  Nonspendable, Restricted, Committed, Assigned, Unassigned

Question 6

Which of the following is not one of the four classes into which nonexchange transactions apply in accordance with GASB Statement No.33?

Accepted Answer

A)  Voluntary nonexchange transactions. 
B)  Imposed nonexchange revenues. 
C)  Derived Tax Revenues. 
D)  Mandatory exchange transactions. 
A)  Voluntary nonexchange transactions. 
B)  Imposed nonexchange revenues. 
C)  Derived Tax Revenues. 
D)  Mandatory exchange transactions.

Question 7

Transfers from one fund to another are classified as expenditures in the fund making the transfer.

Accepted Answer

A) True 
 B)False

Question 8

Use the following to answer the next two questions:
The City of Park Ridge reported appropriations in the amount of $17,000,000 for its General Fund for the fiscal year ended December 31, 2014. During that year, expenditures amounted to $16,200,000 (related to current year purchase orders) and $900,000 (related to prior year purchase orders). In addition, $700,000 in encumbrances had been issued this year, but not filled. Park Ridge follows the budgetary procedure where encumbrances do not lapse.
-The amount that Park Ridge would report for expenditures (and encumbrances,if applicable)in its 2014 General Fund Statement of Revenues,Expenditures,and Changes in Fund Balances (GAAP Basis)would be:

Accepted Answer

A)  $17,100,000. 
B)  $16,200,000. 
C)  $17,700,000. 
D)  $16,900,000. 
A)  $17,100,000. 
B)  $16,200,000. 
C)  $17,700,000. 
D)  $16,900,000.

Question 9

Property tax revenue is considered available if it is received no more than 30 days after the fiscal year end.

Accepted Answer

A) True 
 B)False

Question 10

The only difference between modified accrual accounting and accrual accounting is the difference in the recognition of long-term assets and liabilities.

Accepted Answer

A) True 
 B)False

Question 11

Budgetary Fund Balance -- Reserve for Encumbrances (current year)in excess of a balance of Encumbrances Control indicates:

Accepted Answer

A)  An excess of Vouchers Payable over Encumbrances Control. 
B)  An excess of purchase orders released over invoices received. 
C)  An excess of invoices received over purchase orders released. 
D)  A recording error. 
A)  An excess of Vouchers Payable over Encumbrances Control. 
B)  An excess of purchase orders released over invoices received. 
C)  An excess of invoices received over purchase orders released. 
D)  A recording error.

Question 12

Briefly discuss how governmental budgeting differs from budgeting for businesses.

Accepted Answer

Governmental budgets carry the authority

Question 13

Which of the following results in a decrease in fund balance on a governmental fund's Balance Sheet?

Accepted Answer

A)  Expenditures 
B)  Transfers Received 
C)  Encumbrance 
D)  Both A and B 
A)  Expenditures 
B)  Transfers Received 
C)  Encumbrance 
D)  Both A and B

Question 14

Modified accrual accounting is essentially equivalent to cash basis accounting

Accepted Answer

A) True 
 B)False

Question 15

"Unexpended Appropriations Balance" may be interpreted as how much a government may continue to spend and remain within its budget.

Accepted Answer

A) True 
 B)False

Question 16

Sales taxes,income taxes,and motor fuel taxes are examples of exchange transactions.

Accepted Answer

A) True 
 B)False

Question 17

All of the following are budgetary accounts except:

Accepted Answer

A)  Estimated Revenues 
B)  Appropriations 
C)  Expenditures 
D)  All of the above 
A)  Estimated Revenues 
B)  Appropriations 
C)  Expenditures 
D)  All of the above

Question 18

The GASB has categorized nonexchange transactions into two categories:
 (1)imposed nonexchange revenues and (2)voluntary nonexchange transactions.

Accepted Answer

A) True 
 B)False

Question 19

In a budgetary entry (combining entry),if Estimated Revenues Control exceeds Appropriations Control,the excess would be:

Accepted Answer

A)  credited to Fund Balance-Unreserved. 
B)  debited to Fund Balance-Unreserved. 
C)  debited to Budgetary Fund Balance. 
D)  credited to Budgetary Fund Balance. 
A)  credited to Fund Balance-Unreserved. 
B)  debited to Fund Balance-Unreserved. 
C)  debited to Budgetary Fund Balance. 
D)  credited to Budgetary Fund Balance.

Question 20

With respect to Governmental Funds,Fund Balance must be broken down into assigned and unassigned.

Accepted Answer

A) True 
 B)False

The purpose of an encumbrance is to prevent governments from:

Revenues of governmental fund types should be recognized when:

Encumbrances are often deemed unnecessary for recurring expenditures such as payroll.

Governmental Funds Fund Balance is displayed in which of the following categories?

Which of the following is not one of the four classes into which nonexchange transactions apply in accordance with GASB Statement No.33?

Transfers from one fund to another are classified as expenditures in the fund making the transfer.

Property tax revenue is considered available if it is received no more than 30 days after the fiscal year end.

The only difference between modified accrual accounting and accrual accounting is the difference in the recognition of long-term assets and liabilities.

Budgetary Fund Balance -- Reserve for Encumbrances (current year)in excess of a balance of Encumbrances Control indicates:

Briefly discuss how governmental budgeting differs from budgeting for businesses.

Which of the following results in a decrease in fund balance on a governmental fund's Balance Sheet?

Modified accrual accounting is essentially equivalent to cash basis accounting

"Unexpended Appropriations Balance" may be interpreted as how much a government may continue to spend and remain within its budget.

Sales taxes,income taxes,and motor fuel taxes are examples of exchange transactions.

All of the following are budgetary accounts except:

The GASB has categorized nonexchange transactions into two categories: (1)imposed nonexchange revenues and (2)voluntary nonexchange transactions.

In a budgetary entry (combining entry),if Estimated Revenues Control exceeds Appropriations Control,the excess would be:

With respect to Governmental Funds,Fund Balance must be broken down into assigned and unassigned.

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

Overview of Financial Reporting for State and Local Governments

Accounting for the General and Special Revenue Funds

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

Proprietary Funds

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

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Exam 3: Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

The purpose of an encumbrance is to prevent governments from:

Revenues of governmental fund types should be recognized when:

Encumbrances are often deemed unnecessary for recurring expenditures such as payroll.

Governmental Funds Fund Balance is displayed in which of the following categories?

Which of the following is not one of the four classes into which nonexchange transactions apply in accordance with GASB Statement No.33?

Transfers from one fund to another are classified as expenditures in the fund making the transfer.

Property tax revenue is considered available if it is received no more than 30 days after the fiscal year end.

The only difference between modified accrual accounting and accrual accounting is the difference in the recognition of long-term assets and liabilities.

Budgetary Fund Balance -- Reserve for Encumbrances (current year)in excess of a balance of Encumbrances Control indicates:

Briefly discuss how governmental budgeting differs from budgeting for businesses.

Which of the following results in a decrease in fund balance on a governmental fund's Balance Sheet?

Modified accrual accounting is essentially equivalent to cash basis accounting

"Unexpended Appropriations Balance" may be interpreted as how much a government may continue to spend and remain within its budget.

Sales taxes,income taxes,and motor fuel taxes are examples of exchange transactions.

All of the following are budgetary accounts except:

The GASB has categorized nonexchange transactions into two categories: (1)imposed nonexchange revenues and (2)voluntary nonexchange transactions.

In a budgetary entry (combining entry),if Estimated Revenues Control exceeds Appropriations Control,the excess would be:

With respect to Governmental Funds,Fund Balance must be broken down into assigned and unassigned.

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

Overview of Financial Reporting for State and Local Governments

Accounting for the General and Special Revenue Funds

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

Proprietary Funds

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