Exam 4: Accounting for the General and Special Revenue Funds

The City of Morganville had the following preclosing account balances in its General Fund as of April 30,2012.Debits and credits are not separated; each account had its "normal" balance.Among the expenditures recorded this year is an amount expended on supplies ordered at the end of the previous year.Assume that encumbrances do not lapse and that the City failed to make the journal entry(s)necessary to re-establish the encumbrance in the current year. Required: (a)Prepare all entries necessary to close the General Fund of the City of Morganville. (b)Prepare a Statement of Revenues,Expenditures,and Changes in Fund Balance for the General Fund for the City of Morganville for the Year Ended April 30,2012.End with the ending fund balance.This is the GAAP operating statement.

A local government was awarded a federal grant in the amount of $800,000 to provide for a summer youth employment program for young people.The grant was a reimbursement grant,and a notification of the grant award was received on Apri1 30,2012.The local government expended the resources as follows: The federal government sent the funds in the month following the expenditure.The local government would recognize revenues for the fiscal year ended June 30,2012 in which amount?

When closing out the General Fund and Special Revenue Funds of a state or local governmental unit,the balance of the operating statement accounts and the balances of the budgetary accounts are closed to:

When a special revenue fund accounts for grants that are awarded on a reimbursement basis,revenues are recognized only after expenditures have been recognized.

The expenditures account equals the amount of supplies purchased during a period under which of the following inventory methods?

Which account would be debited when the City of Corfu issued purchase orders for materials and supplies?

The Town of Tonawanda has $30,000 of purchase orders outstanding at the end of 2011 which will be honored.The goods and supplies were received early in January,2012.The invoice amounted to $28,950. What is the journal entry necessary to record receipt of goods and supplies?

Special revenue funds are used if the resources are required to be used to acquire capital assets or for the payment of interest and principal on long-term debt.

The following information was available for the General Fund of the City of Thomasville for the Year Ended December 31,2012. (a)Revenues for the year included property taxes in the amount of $6,700,000,fines and forfeits in the amount of $1,200,000,and miscellaneous in the amount of $400,000. (b)Expenditures from current appropriations included: general government,$4,600,000; public safety,$1,924,000; culture and recreation,$512,000. (c)In addition to (b)above,expenditures related to prior year appropriations (encumbered last year)amounted to $40,000 (public safety).Encumbrances issued this year but not filled amounted to $60,000 (general government). (d)A transfer was made from the General Fund to a debt service fund in the amount of $700,000.A transfer was made from an enterprise fund to the General Fund in the amount of $450,000. (e)A sale of park land was made during the year,which was considered infrequent but not unusual and under the control of management.The proceeds amounted to $400,000,and the land had a basis of $250,000 reported in the government-wide Statement of Net Assets the year before. (f)Beginning balances included Fund Balance in the amount of $260,000 and Reserve for Encumbrances in the amount of $40,000. Required: Prepare a Statement of Revenues,Expenditures,and Changes in Fund Balances for the General Fund for the City of Thomasville for the Year Ended December 31,2012

Proceeds from the Sale of Land in the General Fund is a source of funds and would be closed at year end.

Which of the following is true regarding modified accrual accounting?

If invoices for items purchased total $200,000,and related purchase orders total $185,000,which of the following is correct?

Reciprocal interfund activity:

What is the difference between reciprocal interfund activity and nonreciprocal interfund activity?

Which of the following General Fund accounts would be closed at year end?

Which of the following is not correct with respect to accounting for supplies inventories in a governmental fund?

In the General Fund,revenues are recognized when earned and available.

In special revenue funds,revenues are recognized when earned and measurable.

Interfund services provided and used are recognized as Increases and Decreases in Fund Balance.

Governmental fund financial statements are to be prepared on the