Exam 12: Accounting for State and Local Governments, Part II

According to the GASB (Governmental Accounting Standards Board), which one of the following is not a criterion for determining whether a government is legally separate?

Which of the following is a section of the general purpose external financial statements of a state or local government? (1) Management's discussion and analysis (MD&A). (2) Required supplementary information (other than MD&A). (3) Basic financial statements and notes to financial statements.

What are the three broad sections of a state or local government's CAFR?

A five-year lease is signed by the City of Wachovia for equipment with a seven-year life. The asset will be returned to the lessor at the end of the lease. The present value of the lease is $20,000, and annual payments of $5,411.41 are payable beginning on the date the lease is signed. The interest portion of the second payment is $1,604.75. The equipment is to be used in City Hall and was purchased from appropriated funds of the General Fund. What should be recorded in the General Fund on the date the lease is signed?

For government-wide financial statements, what account is credited when a piece of equipment is leased on a capital lease?

The City of Kamen maintains a collection of paintings of a former citizen in its City Hall building. During the year, one painting was purchased by the city for $2,000 at an auction using appropriated funds in the General Fund. Also during the year, a donation of a painting valued at $3,000 was made to the city and the city has appropriately decided to record this painting as an asset. Required: Prepare the journal entry/entries for the two transactions for the purposes of preparing the government-wide financial statements.

The city operates a public pool where each person is assessed a $2 entrance fee. Which fund is most appropriate to record these revenues?

Which statement is false regarding the Statement of Revenues, Expenditures, and Changes in Fund Balance when it is included with government-wide financial statements?

A city starts a solid waste landfill during 2012. When the landfill was opened the city estimated that it would fill to capacity within 5 years and that the cost to cover the facility would be $1.5 million which will not be paid until the facility is closed. At the end of 2012, the facility was 20% full, and at the end of 2013 the facility was 45% full. If the landfill is judged to be a governmental fund, what liability is reported on the fund financial statements at the end of 2013?

The Town of Portsmouth has at the beginning of the year a $213,000 Net Asset balance, and a $52,000 Fund Balance. The following information relates to the activities within the Town of Portsmouth for the year of 2013. Prepare a Statement of Net Assets

What are the three broad sections of a state or local government's CAFR?

What is meant by the term fiscally independent?

A five-year lease is signed by the City of Wachovia for equipment with a seven-year life. The asset will be returned to the lessor at the end of the lease. The present value of the lease is $20,000, and annual payments of $5,411.41 are payable beginning on the date the lease is signed. The interest portion of the second payment is $1,604.75. The equipment is to be used in City Hall and was purchased from appropriated funds of the General Fund. What should be recorded in the General Fund one year from the date the lease is signed? A) Expenditures - Leased Asset 5,411.41 Cash 5,411.41 B) Expenditures - Interest 1,604.75 Expenditures - Lease Principal 3,806.66 Cash 5,411.41 C) Lease Principal 5,411.41 Other Financing Sources - Capital Lease 5,411.41 D) Expenditures - Interest 1,604.75 Expenditures - Leased Asset 3,806.66 Cash 5,411.41 E) Other Financing Sources - Capital Lease 5,411.41 Cash 5,411.41

How is the Statement of Cash Flows for Proprietary Funds similar and dissimilar to a Statement of Cash Flows for a for-profit business?

What three criteria must be met before a governmental unit can elect to not capitalize and therefore report a work of art or historical treasure as an asset?

GASB Codification Section 2200.106-107 makes which of the following statements regarding Management's Discussion and Analysis?

What information is required in the introductory section of a state or local government's CAFR?

The parking garage and parking lots owned by the City of Danton reported the following balances for 2013: Receipts from public users of the parking facilities \ 190,000 Receipts from the city for parking of city-owned vehicles 8,000 Salaries paid to employees 75,000 Printing - paid to an internal service fund 6,000 Interest on bonded indebtedness 10,000 Sculpture for entrance to parking lot (donated during 2013) 12,500 Depreciation on parking garage 30,000 Truck (purchased during 2013) 35,000 Maintenance - paid to an internal service fund 17,000 Required: What amount of net revenue (or expense) should be reported by the fund that was used to account for parking operations assuming the preparation of government-wide financial statements?

The Town of Conway opened a solid waste landfill in 2001 that is now filled to capacity. The city initially anticipated closure costs of $2 million. These costs were not expected to be incurred until the landfill is closed. What is the final journal entry to record these costs assuming the estimated $2 million closure costs were properly recorded and the landfill is accounted for in an enterprise fund? A) Expense-Landfill Closure 2,000,000 Landfill Closure Liability 2,000,000 B) Landfill Closure Liability 2,000,000 Expense-Landfill Closure 2,000,000 C) Expense-Landfill Closure 2,000,000 Cash 2,000,000 D) Landfill Closure Liability 2,000,000 Cash 2,000,000 E) Expenditure- Landfill Closure 2,000,000 Cash 2,000,000

Which one of the following is a criterion for identifying a primary government?