Exam 4: Accounting for Governmental Operating Activitiesillustrative Transactions and Financial Statements

Identify the four types of nonexchange transactions and discuss the rules for recognition of revenues and expenses/expenditures for each type of transaction.

In fiscal year 2017 the "Expenditures-2016" account represents

On May 1,the City of Dustin was notified of approval of a $300,000 federal operating grant,payable on a reimbursement basis as the city expends resources for the intended purpose of the grant.As of May 1,no expenditures had been made for grant purposes.The journal entry to record approval of this grant will include:

How does the use of encumbrance procedures improve budgetary control over expenditures?

The account Budgetary Fund Balance can have either a debit or credit balance.

Year-end interfund receivable or payable balances will appear in the line item internal balances within their respective columns on the government-wide statement of net position.

Grant funds received before time requirements are met,but after all other eligibility requirements have been met,should be reported as an asset and a deferred inflow of resources by the recipient.

Encumbrance accounts need not be closed at year-end if the government is required or intends to honor the encumbrances outstanding at year-end.

Dover City has calculated that General Fund property tax revenues of $5,640,000 are required for the current fiscal year.Over the past several years,the city has collected 94 percent of all property taxes levied.The city levied property taxes in the amount that will generate the required $5,640,000.Which of the following general journal entries would correctly record the property tax levy?

At the end of the 2017 fiscal year the General Fund had $500 in encumbrances that remained opened into fiscal year 2018.In 2018 the encumbered goods were received at an invoiced cost of $520.How much would be recorded as the 2018 expenditure?

Which of the following transactions is classified as an exchange transaction?

In what ways does the government-wide statement of net position differ from the balance sheet for governmental funds?

Which of the following transactions is classified as an exchange transaction?

A payment made by the General Fund to a debt service fund would not be recorded in the governmental activities journal.

The following transactions occurred for the City of Fontaine's General Fund. 1.The budget prepared for the fiscal year included Total estimated revenues of $2,774,000 and appropriations of $2,693,000. 2.Encumbrances issued against the appropriations during the year were $931,000. 3.The current year's tax levy of $2,005,000 was recorded; uncollectibles were estimated as $65,000. 4.Collections of delinquent taxes from prior years' levies totaled $132,000; collections of the current year's levy totaled $1,459,000. 5.Invoices were received and approved for payment for items ordered in documents recorded as encumbrances in Transaction (2)of this problem. The estimated liability was $851,200. Actual costs were $850,500. 6.Revenue other than taxes collected during the year consisted of licenses and permits,$373,000; intergovernmental revenue,$400,000; and $66,000 of miscellaneous revenues. 7.Payments on Vouchers Payable totaled $1,505,000. Prepare journal entries in the General Fund general journal to record the transactions. (Subsidiary detail may be omitted.)

The General Fund used electricity provided by the city-owned electric utility (an enterprise fund of the city).The governmental activities journal entry to record the transaction will include:

Which of the following should not be reported on the balance sheet of the General Fund?

Cartier Village's capital expenditures during the year ended December 31 included: Equipment for village tax collector's office $40,000 Vehicles for village electric utility 60,000 What amounts should have been recorded in the General Fund and enterprise fund for the increase in equipment during the year ended December 31,assuming the electric utility is considered an enterprise fund?

Which of the following accounts would not be closed at the end of each fiscal year?

The Governmental Activities column of the government-wide statement of net position reports both current and noncurrent assets and liabilities.