Question 1

The users of goods or services provided by proprietary funds are charged based on their consumption of the goods or services.

Accepted Answer

A) True 
 B)False

Question 2

Proprietary funds are required to have a Statement of Revenues,Expenses,and Change in Net Assets,a Statement of Net Assets,and a Statement of Cash Flows.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not true regarding the Statement of Cash Flows required by the GASB for proprietary funds?

Accepted Answer

A)  Either the direct or indirect method may be used. 
B)  Interest payments would be recorded as financing activities. 
C)  Acquisition of capital assets with bond proceeds would be a decrease in cash provided by capital and related financing activities. 
D)  Four categories of activities are used instead of the three required by the FASB. 
A)  Either the direct or indirect method may be used. 
B)  Interest payments would be recorded as financing activities. 
C)  Acquisition of capital assets with bond proceeds would be a decrease in cash provided by capital and related financing activities. 
D)  Four categories of activities are used instead of the three required by the FASB.

Question 4

Customer's meter deposits which cannot be spent for normal operating purposes would be classified as restricted cash in the Statement of Net Assets of which fund?

Accepted Answer

A)  Agency. 
B)  Nonexpendable Trust. 
C)  Special Revenue. 
D)  Enterprise. 
A)  Agency. 
B)  Nonexpendable Trust. 
C)  Special Revenue. 
D)  Enterprise.

Question 5

Which of the following statements is true regarding estimated closure costs for municipal solid waste landfills,assuming that it is operating as an enterprise fund?

Accepted Answer

A)  The estimated closure costs are expensed fully at the time of the estimate. 
B)  A portion of those future estimated costs be charged as an expense and a liability based on a units-of-production method. 
C)  Modified accrual principles apply and the amount expensed is limited to annual anticipated capacity of the landfill. 
D)  None of the above is true. 
A)  The estimated closure costs are expensed fully at the time of the estimate. 
B)  A portion of those future estimated costs be charged as an expense and a liability based on a units-of-production method. 
C)  Modified accrual principles apply and the amount expensed is limited to annual anticipated capacity of the landfill. 
D)  None of the above is true.

Question 6

An Enterprise Fund has an indefinite life.

Accepted Answer

A) True 
 B)False

Question 7

Activities that produce goods or services to be provided to other departments or other governmental units on a cost-reimbursement basis are accounted for by enterprise funds.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is false regarding proprietary fund accounting?

Accepted Answer

A)  The economic resources measurement focus and accrual accounting are used. 
B)  Capital assets are recorded in the accounts and depreciated. 
C)  The Statement of Net Assets must be in a classified format, with current assets separated from noncurrent assets and current liabilities separated from noncurrent liabilities. 
D)  In the Statement of Net Assets, the net assets are reported as either reserved or unreserved. 
A)  The economic resources measurement focus and accrual accounting are used. 
B)  Capital assets are recorded in the accounts and depreciated. 
C)  The Statement of Net Assets must be in a classified format, with current assets separated from noncurrent assets and current liabilities separated from noncurrent liabilities. 
D)  In the Statement of Net Assets, the net assets are reported as either reserved or unreserved.

Question 9

The Statement of Cash Flows for a proprietary fund would include which of the following?

Accepted Answer

A)  Operating, investing, financing 
B)  Operating, capital and related financing, investing 
C)  Operating, investing, capital and related financing and noncapital related financing 
D)  Operating, financing and noncapital related financing activities 
A)  Operating, investing, financing 
B)  Operating, capital and related financing, investing 
C)  Operating, investing, capital and related financing and noncapital related financing 
D)  Operating, financing and noncapital related financing activities

Question 10

According to GASB 34,Enterprise funds must be used when:

Accepted Answer

A)  Debt is backed solely by fees and charges. 
B)  A legal requirement exists that the cost of providing services for an activity, including capital costs, be recovered through fees or charges. 
C)  A government has a policy to establish fees and charges to cover the cost of providing services for an activity. 
D)  Any of the above applies. 
A)  Debt is backed solely by fees and charges. 
B)  A legal requirement exists that the cost of providing services for an activity, including capital costs, be recovered through fees or charges. 
C)  A government has a policy to establish fees and charges to cover the cost of providing services for an activity. 
D)  Any of the above applies.

Question 11

An internal service fund provided services to a General Fund department.At the time of billing,the debit entry in the General Fund would be:

Accepted Answer

A)  Other Financing Sources-Transfers Out. 
B)  Expenditures. 
C)  Operating Revenues-Charges for Services. 
D)  Expenses. 
A)  Other Financing Sources-Transfers Out. 
B)  Expenditures. 
C)  Operating Revenues-Charges for Services. 
D)  Expenses.

Question 12

Governmental units use which fund type to account for services provided to the general public on a user-charge basis?

Accepted Answer

A)  General Fund. 
B)  Enterprise fund. 
C)  Permanent fund. 
D)  Internal service fund. 
A)  General Fund. 
B)  Enterprise fund. 
C)  Permanent fund. 
D)  Internal service fund.

Question 13

Which of the following is true regarding internal service funds?

Accepted Answer

A)  Internal service funds provide services primarily to external users on a user charge basis. 
B)  Internal service funds normally record the annual budget in the accounts. 
C)  Internal service funds use full accrual accounting. 
D)  Internal service funds' capital assets are not accounted for in the accounts. 
A)  Internal service funds provide services primarily to external users on a user charge basis. 
B)  Internal service funds normally record the annual budget in the accounts. 
C)  Internal service funds use full accrual accounting. 
D)  Internal service funds' capital assets are not accounted for in the accounts.

Question 14

Capital assets constructed by an internal service fund are recorded in a capital projects fund.

Accepted Answer

A) True 
 B)False

Question 15

Under GASB Statement 34,enterprise funds must be used in which of the following circumstances?

Accepted Answer

A)  When debt is backed solely by fees and charges. 
B)  When services are provided to other governmental units for a fee. 
C)  When the activities are expected to make a profit to be used to fund other government programs. 
D)  None of the above; enterprise funds are optional. 
A)  When debt is backed solely by fees and charges. 
B)  When services are provided to other governmental units for a fee. 
C)  When the activities are expected to make a profit to be used to fund other government programs. 
D)  None of the above; enterprise funds are optional.

Question 16

Montgomery County operates a landfill as an enterprise fund.The closure and postclosure care costs are estimated to be $24 million.It is estimated that the capacity of the landfill is 12 million tons of waste and that waste will be accepted for 4 years.During 2012,2.9 million tons of waste was accepted.The charge for closure and postclosure care costs for 2012 would be:

Accepted Answer

A)  $3 million. 
B)  $5.8 million. 
C)  $6 million. 
D)  $4.5 million. 
A)  $3 million. 
B)  $5.8 million. 
C)  $6 million. 
D)  $4.5 million.

Question 17

Which of the following statements is true regarding proprietary funds?

Accepted Answer

A)  Accruals and deferrals common to business accounting are recorded in proprietary funds. 
B)  Proprietary funds use the modified accrual basis of accounting. 
C)  GASB standards require budget-actual reporting for proprietary funds. 
D)  The purchase long-term assets is recorded as an expenditure in proprietary funds. 
A)  Accruals and deferrals common to business accounting are recorded in proprietary funds. 
B)  Proprietary funds use the modified accrual basis of accounting. 
C)  GASB standards require budget-actual reporting for proprietary funds. 
D)  The purchase long-term assets is recorded as an expenditure in proprietary funds.

Question 18

Impact fees charged to real estate developers are recorded in an enterprise fund as capital contributions,a nominal account that will increase Net Assets,but is reported separately in the statement of Revenues,Expenses and Changes in Fund Net Assets.

Accepted Answer

A) True 
 B)False

Question 19

Restricted Net Assets for a proprietary fund:

Accepted Answer

A)  Are net resources whose use is restricted by law. 
B)  Are reported net of acquisition debt. 
C)  Are net resources whose use is restricted by creditors, grantors or other governments. 
D)  Are reported net of depreciation. 
A)  Are net resources whose use is restricted by law. 
B)  Are reported net of acquisition debt. 
C)  Are net resources whose use is restricted by creditors, grantors or other governments. 
D)  Are reported net of depreciation.

Question 20

An internal service fund provided services to a General Fund department.At the time of billing,the credit entry in the internal service fund would be:

Accepted Answer

A)  Other Financing Sources-Transfers In. 
B)  Expenditures. 
C)  Operating Revenues-Charges for Services. 
D)  Due from General Fund. 
A)  Other Financing Sources-Transfers In. 
B)  Expenditures. 
C)  Operating Revenues-Charges for Services. 
D)  Due from General Fund.

The users of goods or services provided by proprietary funds are charged based on their consumption of the goods or services.

Proprietary funds are required to have a Statement of Revenues,Expenses,and Change in Net Assets,a Statement of Net Assets,and a Statement of Cash Flows.

Which of the following is not true regarding the Statement of Cash Flows required by the GASB for proprietary funds?

Customer's meter deposits which cannot be spent for normal operating purposes would be classified as restricted cash in the Statement of Net Assets of which fund?

Which of the following statements is true regarding estimated closure costs for municipal solid waste landfills,assuming that it is operating as an enterprise fund?

An Enterprise Fund has an indefinite life.

Activities that produce goods or services to be provided to other departments or other governmental units on a cost-reimbursement basis are accounted for by enterprise funds.

Which of the following is false regarding proprietary fund accounting?

The Statement of Cash Flows for a proprietary fund would include which of the following?

According to GASB 34,Enterprise funds must be used when:

An internal service fund provided services to a General Fund department.At the time of billing,the debit entry in the General Fund would be:

Governmental units use which fund type to account for services provided to the general public on a user-charge basis?

Which of the following is true regarding internal service funds?

Capital assets constructed by an internal service fund are recorded in a capital projects fund.

Under GASB Statement 34,enterprise funds must be used in which of the following circumstances?

Which of the following statements is true regarding proprietary funds?

Impact fees charged to real estate developers are recorded in an enterprise fund as capital contributions,a nominal account that will increase Net Assets,but is reported separately in the statement of Revenues,Expenses and Changes in Fund Net Assets.

Restricted Net Assets for a proprietary fund:

An internal service fund provided services to a General Fund department.At the time of billing,the credit entry in the internal service fund would be:

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 the General and Special Revenue Funds

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

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

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Exam 6: Proprietary Funds

The users of goods or services provided by proprietary funds are charged based on their consumption of the goods or services.

Proprietary funds are required to have a Statement of Revenues,Expenses,and Change in Net Assets,a Statement of Net Assets,and a Statement of Cash Flows.

Which of the following is not true regarding the Statement of Cash Flows required by the GASB for proprietary funds?

Customer's meter deposits which cannot be spent for normal operating purposes would be classified as restricted cash in the Statement of Net Assets of which fund?

Which of the following statements is true regarding estimated closure costs for municipal solid waste landfills,assuming that it is operating as an enterprise fund?

An Enterprise Fund has an indefinite life.

Activities that produce goods or services to be provided to other departments or other governmental units on a cost-reimbursement basis are accounted for by enterprise funds.

Which of the following is false regarding proprietary fund accounting?

The Statement of Cash Flows for a proprietary fund would include which of the following?

According to GASB 34,Enterprise funds must be used when:

An internal service fund provided services to a General Fund department.At the time of billing,the debit entry in the General Fund would be:

Governmental units use which fund type to account for services provided to the general public on a user-charge basis?

Which of the following is true regarding internal service funds?

Capital assets constructed by an internal service fund are recorded in a capital projects fund.

Under GASB Statement 34,enterprise funds must be used in which of the following circumstances?

Which of the following statements is true regarding proprietary funds?

Impact fees charged to real estate developers are recorded in an enterprise fund as capital contributions,a nominal account that will increase Net Assets,but is reported separately in the statement of Revenues,Expenses and Changes in Fund Net Assets.

Restricted Net Assets for a proprietary fund:

An internal service fund provided services to a General Fund department.At the time of billing,the credit entry in the internal service fund would be:

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 the General and Special Revenue Funds

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

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