Exam 2: Principles of Accounting and Financial Reporting for State and Local Governments

Revenues is an example of what the GASB terms an inflow of resources.

The following are fund balance classifications described in Chapter 2: A.Nonspendable B.Spendable-Restricted C.Spendable-Committed D.Spendable-Assigned E.Spendable-Unassigned For each of the following scenarios,indicate how they would be classified for fund balance reporting purposes using the classification list above.Place the appropriate letter in the blank space next to each scenario. _____ 1.Bond proceeds of $15,000,000 that must be used for construction of a fire substation remain unspent at the end of the fiscal year. _____ 2.Prepaid rent of $6,000 remains at the end of the fiscal year. _____ 3.The city council adopted a plan to set aside 2% of revenues over the next three years to help build cash reserves. At the end of the fiscal year 2% of the revenues were set aside. _____ 4.The state transportation department provided $1,000,000 in state funds to be used for street widening. At the end of the fiscal year $750,000 remained unspent. _____ 5.The county received a $3,000,000 endowment during the year.

All capital assets acquired by or used by a fund should be reported in the fund balance sheet or statement of net position.

Which of the following funds is a governmental fund-type?

Which of the following funds would record depreciation of capital assets?

The basis of accounting that should be used in preparing fund financial statements is:

List the basic financial statements required by GASB standards and briefly explain their purposes.

Financial resources set aside to pay principal and interest on general long-term debt may be accounted for in which of the following fund types?

Generally accepted accounting principles applicable to state and local governments require that

Proprietary funds primarily provide services to the general public for a fee.

Which of the following funds would be used to account for an activity that provides centralized purchasing and sales of goods or services to other departments or agencies of the government on a cost-reimbursement basis?

Which of the following funds are governmental funds?

According to GASB standards transfers should be recognized

Deferred inflow of resources and deferred outflow of resources would be shown in separate sections of a government's statement of net position.

Which of the following is a fiduciary fund?

Use the following information to determine whether the Development Special Revenue and the Debt Service Funds should be reported as major funds based on asset amounts provided. P1P1_1.27Development Special Revenue Fund AssetsP1P1_EP1P1_13.97$740,000P1P1_E P1P1_1.27Debt Service Fund AssetsP1P1_EP1P1_13.97$150,000P1P1_E P1P1_1.27Total Governmental Fund AssetsP1P1_EP1P1_13.97$7,500,000P1P1_E P1P1_1.27Total Governmental Fund and Enterprise Fund AssetsP1P1_EP1P1_13.97$8,750,000P1P1_E

The positive fund balance in a special revenue fund must at a minimum be reported as assigned.

Under GASB standards which of the following funds can report a positive amount for unassigned fund balance?

Explain the difference between measurement focus and basis of accounting.Also,explain the difference between the economic resources measurement focus and the current financial resources measurement focus as well as the difference between the accrual and modified accrual bases of accounting.Which funds and government-wide activities use each focus and each basis?

A city received resources that the state indicates can only be used for public works projects,such as road construction.Assuming the resources have not been expended by year end,how would the resources the city received be shown in the city's fund balances?