Question 1

Which of the following is true with respect to Special revenue funds?

Accepted Answer

A)  Special revenue funds are used when it is desirable to provide separate reporting of resources that are designated for specific purposes. 
B)  Special revenue funds are used when it is desirable to provide separate reporting for capital projects. 
C)  Special revenue funds are used when it is desirable to provide funding for debt service. 
D)  Special revenue funds are used when it is desirable to provide separate reporting of resources that are restricted or committed as to expenditure for purposes other than debt service or capital projects. 
A)  Special revenue funds are used when it is desirable to provide separate reporting of resources that are designated for specific purposes. 
B)  Special revenue funds are used when it is desirable to provide separate reporting for capital projects. 
C)  Special revenue funds are used when it is desirable to provide funding for debt service. 
D)  Special revenue funds are used when it is desirable to provide separate reporting of resources that are restricted or committed as to expenditure for purposes other than debt service or capital projects.

Question 2

GASB standards for property tax revenue recognition under the modified accrual basis of accounting provide that revenue is permitted to be recorded if the expected amount to be collected can be determined and collection is reasonably assured even if the taxes are expected to be collected more than 60 days after the fiscal year end.

Accepted Answer

A) True 
 B)False

Question 3

Under modified accrual accounting,revenues are recognized when measurable and:

Accepted Answer

A)  Earned. 
B)  Available. 
C)  Collected. 
D)  Expenditures have been made. 
A)  Earned. 
B)  Available. 
C)  Collected. 
D)  Expenditures have been made.

Question 4

In February,X City ordered $500,000 of supplies.On March 17th it received all of the ordered supplies and an invoice of $492,000.Which of the following would be recorded upon receipt of the supplies and invoice?

Accepted Answer

A)  Debit Encumbrances Control for $500,000. 
B)  Debit Budgetary Fund Balance -- Reserve for Encumbrances for $500,000. 
C)  Debit Encumbrances Control for $492,000. 
D)  Credit Expenditures Control for $492,000. 
A)  Debit Encumbrances Control for $500,000. 
B)  Debit Budgetary Fund Balance -- Reserve for Encumbrances for $500,000. 
C)  Debit Encumbrances Control for $492,000. 
D)  Credit Expenditures Control for $492,000.

Question 5

Which of the following accounts of a governmental unit is debited when supplies previously ordered are received?

Accepted Answer

A)  Encumbrances Control. 
B)  Reserve for Supplies. 
C)  Budgetary Fund Balance -- Reserve for Encumbrances. 
D)  Appropriations. 
A)  Encumbrances Control. 
B)  Reserve for Supplies. 
C)  Budgetary Fund Balance -- Reserve for Encumbrances. 
D)  Appropriations.

Question 6

The General Fund of the City of Lexington approved a tax levy for the calendar year 2012 in the amount of $2,000,000.Of that amount,$30,000 is expected to be uncollectible.During 2012,$1,750,000 was collected.During 2013,$100,000 was collected during the first 30 days,$70,000 was collected during the next 30 days,and $50,000 was collected during the next 30 days.During the postaudit,you discovered that the City showed $2,000,000 in revenues.What adjusting entry would you need to make,assuming you decided to allow the maximum amount of revenues for 2012,using modified accrual accounting?

Accepted Answer

A)  Debit Revenues and Credit Deferred Revenues in the amount of $50,000. 
B)  Debit Revenues and Credit Deferred Revenues in the amount of $120,000. 
C)  Debit Revenues and Credit Deferred Revenues in the amount of $350,000. 
D)  No entry is required. 
A)  Debit Revenues and Credit Deferred Revenues in the amount of $50,000. 
B)  Debit Revenues and Credit Deferred Revenues in the amount of $120,000. 
C)  Debit Revenues and Credit Deferred Revenues in the amount of $350,000. 
D)  No entry is required.

Question 7

When establishing funds,governments should attempt to have a large number of special revenue and other funds to provide the user with enough detail to understand the transactions.

Accepted Answer

A) True 
 B)False

Question 8

The City of Pine Cove levied property taxes for the fiscal year ended June 30,2012 in the amount of $9,000,000.It is estimated that 2% will not be collected.During the year ended June 30,2012,$8,100,000 in property taxes was collected.It is estimated that $500,000 will be collected during the next 60 days,$265,000 will be collected after 60 days,and $160,000 will not be collected.What is the maximum amount Lonesome Pines can recognize as property tax revenue for the fiscal year ended June 30,2012 in its Governmental Funds Statement of Revenues,Expenditures,and Changes in Fund Balances,assuming there were no unpaid property taxes at the end of the previous year?

Accepted Answer

A)  $9,000,000. 
B)  $8,865,000. 
C)  $8,600,000. 
D)  $8,100,000. 
A)  $9,000,000. 
B)  $8,865,000. 
C)  $8,600,000. 
D)  $8,100,000.

Question 9

Which of the following occurs when uncollectible delinquent taxes are written off? (Ignore interest and penalties)

Accepted Answer

A)  Net receivables remain unchanged. 
B)  Accounts receivable goes down and the Estimated Uncollectible Taxes Account is increased. 
C)  Delinquent Tax Receivable is increased. 
D)  Uncollectible Delinquent Tax Expense is increased. 
A)  Net receivables remain unchanged. 
B)  Accounts receivable goes down and the Estimated Uncollectible Taxes Account is increased. 
C)  Delinquent Tax Receivable is increased. 
D)  Uncollectible Delinquent Tax Expense is increased.

Question 10

Under the consumption method to account for supplies inventory,the expenditures account is debited when the supplies are received and the inventory account is adjusted at year end if significant.

Accepted Answer

A) True 
 B)False

Question 11

Governmental fund financial statements are prepared using the accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 12

Use the following classification to classify each General Fund transaction that follows by placing the appropriate letter in the space next to each item:
a.Revenue
b.Other Financing Source or Use-Transfers In or Out
c.Neither a revenue nor an operating transfer
Transactions:

Accepted Answer

1.c,2.c,3.

Question 13

Moving cash from the General Fund to a debt service fund for payment of debt service is an example of a (an)

Accepted Answer

A)  Inter-fund transfer. 
B)  Inter-fund loan. 
C)  Inter-fund reimbursement. 
D)  Cash payment. 
A)  Inter-fund transfer. 
B)  Inter-fund loan. 
C)  Inter-fund reimbursement. 
D)  Cash payment.

Question 14

If a government has debt service due no more than one month after the end of a fiscal year and has the resources available,then it is permitted to accrue expenditures and a fund liability for the debt service.

Accepted Answer

A) True 
 B)False

Question 15

When accounting for the General Fund,the Encumbrances Control account is credited when:

Accepted Answer

A)  A purchase order is approved. 
B)  A purchase order is filled or canceled. 
C)  An invoice is paid. 
D)  The budget is approved. 
A)  A purchase order is approved. 
B)  A purchase order is filled or canceled. 
C)  An invoice is paid. 
D)  The budget is approved.

Question 16

Which of the following is true regarding modified accrual accounting?

Accepted Answer

A)  Expenditures for claims and judgments, compensated absences, and special termination benefits should be recognized whether or not the liabilities are to be paid with available resources. 
B)  Expenditures for services used by General Fund departments should be recognized when those services are received, regardless of whether or not resources are available in the fund. 
C)  Both of the above are true. 
D)  Neither of the above is true. 
A)  Expenditures for claims and judgments, compensated absences, and special termination benefits should be recognized whether or not the liabilities are to be paid with available resources. 
B)  Expenditures for services used by General Fund departments should be recognized when those services are received, regardless of whether or not resources are available in the fund. 
C)  Both of the above are true. 
D)  Neither of the above is true.

Question 17

The City of Corning General Fund reported the following at year-end,prior to closing entries: Revenues,$11,000,000; Expenditures,$9,900,000; Other Financing Uses,$500,000; Other Financing Sources,$300,000; Encumbrances,$600,000.Assume the beginning unassigned fund balance was $1,000,000,what is the amount that would be reported as ending unassigned fund balance?

Accepted Answer

A)  $1,400,000. 
B)  $1,900,000. 
C)  $1,300,000. 
D)  Cannot be determined without information concerning constraints placed on the fund's resources. 
A)  $1,400,000. 
B)  $1,900,000. 
C)  $1,300,000. 
D)  Cannot be determined without information concerning constraints placed on the fund's resources.

Question 18

The journal entry to record the budget would include:

Accepted Answer

A)  A debit to appropriations Control 
B)  A credit to Estimated Revenues Control 
C)  A debit to Estimated Revenues Control 
D)  A and B would both be included in the journal entry 
A)  A debit to appropriations Control 
B)  A credit to Estimated Revenues Control 
C)  A debit to Estimated Revenues Control 
D)  A and B would both be included in the journal entry

Question 19

Interfund transfers occur between individual funds in the same government system without the requirement of repayment.If the General Fund transferred money to the Debt Service Fund,how would the Debt Service Fund account for the transaction?

Accepted Answer

A)  As non-operating revenue. 
B)  As a liability on the balance sheet. 
C)  As a source of funds on the activities statement. 
D)  As a reduction in net liabilities. 
A)  As non-operating revenue. 
B)  As a liability on the balance sheet. 
C)  As a source of funds on the activities statement. 
D)  As a reduction in net liabilities.

Question 20

The initial transfer of cash from the General Fund to establish a motor pool internal service fund would require the General Fund to credit cash and debit:

Accepted Answer

A)  Investment in Internal Service Fund. 
B)  Other Financing Uses-Transfers Out Control. 
C)  Expenditures - Vehicle maintenance. 
D)  Accounts Receivable-Internal Service Fund. 
A)  Investment in Internal Service Fund. 
B)  Other Financing Uses-Transfers Out Control. 
C)  Expenditures - Vehicle maintenance. 
D)  Accounts Receivable-Internal Service Fund.

Which of the following is true with respect to Special revenue funds?

Under modified accrual accounting,revenues are recognized when measurable and:

In February,X City ordered $500,000 of supplies.On March 17th it received all of the ordered supplies and an invoice of $492,000.Which of the following would be recorded upon receipt of the supplies and invoice?

Which of the following accounts of a governmental unit is debited when supplies previously ordered are received?

When establishing funds,governments should attempt to have a large number of special revenue and other funds to provide the user with enough detail to understand the transactions.

Which of the following occurs when uncollectible delinquent taxes are written off? (Ignore interest and penalties)

Under the consumption method to account for supplies inventory,the expenditures account is debited when the supplies are received and the inventory account is adjusted at year end if significant.

Governmental fund financial statements are prepared using the accrual basis of accounting.

Use the following classification to classify each General Fund transaction that follows by placing the appropriate letter in the space next to each item: a.Revenue b.Other Financing Source or Use-Transfers In or Out c.Neither a revenue nor an operating transfer Transactions:

Moving cash from the General Fund to a debt service fund for payment of debt service is an example of a (an)

If a government has debt service due no more than one month after the end of a fiscal year and has the resources available,then it is permitted to accrue expenditures and a fund liability for the debt service.

When accounting for the General Fund,the Encumbrances Control account is credited when:

Which of the following is true regarding modified accrual accounting?

The journal entry to record the budget would include:

Interfund transfers occur between individual funds in the same government system without the requirement of repayment.If the General Fund transferred money to the Debt Service Fund,how would the Debt Service Fund account for the transaction?

The initial transfer of cash from the General Fund to establish a motor pool internal service fund would require the General Fund to credit cash and debit:

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

Overview of Financial Reporting for State and Local Governments

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

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

Proprietary Funds

Fiduciary Trustfunds

Government-Wide Statements, capital Assets, long-Term Debt

Advanced Topics for State and Local Governments

Accounting for Private Not-For-Profit Organizations

College and University Accounting

Accounting for Hospitals and Other Health Care Providers

Auditing, tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters

Exam 4: Accounting for the General and Special Revenue Funds

Which of the following is true with respect to Special revenue funds?

Under modified accrual accounting,revenues are recognized when measurable and:

In February,X City ordered $500,000 of supplies.On March 17th it received all of the ordered supplies and an invoice of $492,000.Which of the following would be recorded upon receipt of the supplies and invoice?

Which of the following accounts of a governmental unit is debited when supplies previously ordered are received?

When establishing funds,governments should attempt to have a large number of special revenue and other funds to provide the user with enough detail to understand the transactions.

Which of the following occurs when uncollectible delinquent taxes are written off? (Ignore interest and penalties)

Under the consumption method to account for supplies inventory,the expenditures account is debited when the supplies are received and the inventory account is adjusted at year end if significant.

Governmental fund financial statements are prepared using the accrual basis of accounting.

Use the following classification to classify each General Fund transaction that follows by placing the appropriate letter in the space next to each item: a.Revenue b.Other Financing Source or Use-Transfers In or Out c.Neither a revenue nor an operating transfer Transactions:

Moving cash from the General Fund to a debt service fund for payment of debt service is an example of a (an)

If a government has debt service due no more than one month after the end of a fiscal year and has the resources available,then it is permitted to accrue expenditures and a fund liability for the debt service.

When accounting for the General Fund,the Encumbrances Control account is credited when:

Which of the following is true regarding modified accrual accounting?

The journal entry to record the budget would include:

Interfund transfers occur between individual funds in the same government system without the requirement of repayment.If the General Fund transferred money to the Debt Service Fund,how would the Debt Service Fund account for the transaction?

The initial transfer of cash from the General Fund to establish a motor pool internal service fund would require the General Fund to credit cash and debit:

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

Overview of Financial Reporting for State and Local Governments

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

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

Proprietary Funds

Fiduciary Trustfunds

Government-Wide Statements, capital Assets, long-Term Debt

Advanced Topics for State and Local Governments

Accounting for Private Not-For-Profit Organizations

College and University Accounting

Accounting for Hospitals and Other Health Care Providers

Auditing, tax-Exempt Organizations, and Evaluating Performance

Financial Reporting by the Federal Government

Filters