Question 1

Which of the following is not true regarding enterprise funds?

Accepted Answer

A)  Enterprise funds record long-term debt directly in the fund accounts. 
B)  Enterprise funds record capital assets directly in the fund accounts. 
C)  Enterprise funds report a Statement of Cash Flows. 
D)  The difference between assets and liabilities of enterprise funds is called "Fund Balance." 
A)  Enterprise funds record long-term debt directly in the fund accounts. 
B)  Enterprise funds record capital assets directly in the fund accounts. 
C)  Enterprise funds report a Statement of Cash Flows. 
D)  The difference between assets and liabilities of enterprise funds is called "Fund Balance."

Question 2

Capital assets of an enterprise fund should be reported in the:

Accepted Answer

A)  Government-Wide Statement of Net Assets only. 
B)  Proprietary Fund Statement of Net Assets only. 
C)  General Fixed Asset Account Group only. 
D)  Government-Wide Statement of Net Assets and Proprietary Funds Statement of Net Assets. 
A)  Government-Wide Statement of Net Assets only. 
B)  Proprietary Fund Statement of Net Assets only. 
C)  General Fixed Asset Account Group only. 
D)  Government-Wide Statement of Net Assets and Proprietary Funds Statement of Net Assets.

Question 3

The Proprietary Fund Statement of Net Assets must classify assets and liabilities between current and long-term.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is correct with respect to Internal Service Funds?

Accepted Answer

A)  Internal service funds use accrual accounting and the economic resource focus. 
B)  Net Assets (fund equity) are to be reported in two categories: assigned and unassigned. 
C)  Internal service funds account for long-term debt but not long-term fixed assets. 
D)  All of the above are false statements. 
A)  Internal service funds use accrual accounting and the economic resource focus. 
B)  Net Assets (fund equity) are to be reported in two categories: assigned and unassigned. 
C)  Internal service funds account for long-term debt but not long-term fixed assets. 
D)  All of the above are false statements.

Question 5

Which of the following would not be true regarding internal service funds?

Accepted Answer

A)  Internal service funds use the economic resources measurement focus and accrual basis of accounting. 
B)  Examples of internal service funds would include self-insurance funds, motor pool funds, and print shop funds. 
C)  In the government-wide financial statements, internal service funds are most commonly reported in the business-type activities column. 
D)  None of the above; all are true. 
A)  Internal service funds use the economic resources measurement focus and accrual basis of accounting. 
B)  Examples of internal service funds would include self-insurance funds, motor pool funds, and print shop funds. 
C)  In the government-wide financial statements, internal service funds are most commonly reported in the business-type activities column. 
D)  None of the above; all are true.

Question 6

When preparing the Statement of Cash Flows for the Proprietary Fund,cash flows from noncapital financing activities include all of the following EXCEPT:

Accepted Answer

A)  Receipts from customers. 
B)  Proceeds and repayment of debt not clearly related to capital outlay. 
C)  Grants received from and paid to other governments for noncapital purposes. 
D)  Transfers to and from other funds. 
A)  Receipts from customers. 
B)  Proceeds and repayment of debt not clearly related to capital outlay. 
C)  Grants received from and paid to other governments for noncapital purposes. 
D)  Transfers to and from other funds.

Question 7

Which of the following is not true regarding enterprise funds?

Accepted Answer

A)  Similar to commercial businesses, enterprise funds equity accounts include both contributed capital and retained earnings. 
B)  A Statement of Revenues, Expenses, and Changes in Fund Net Assets would be the primary operating statement for enterprise funds. 
C)  Enterprise funds' Cash Flow Statements could have up to four categories. 
D)  None of the above; all are true. 
A)  Similar to commercial businesses, enterprise funds equity accounts include both contributed capital and retained earnings. 
B)  A Statement of Revenues, Expenses, and Changes in Fund Net Assets would be the primary operating statement for enterprise funds. 
C)  Enterprise funds' Cash Flow Statements could have up to four categories. 
D)  None of the above; all are true.

Question 8

The categories of Net assets for a proprietary fund are classified within which of the following categories?

Accepted Answer

A)  Net Assets Invested in Capital Assets Net of Related Debt, Restricted Net Assets and Unrestricted Net Assets 
B)  Spendable Net Assets and Spendable Net Assets 
C)  Committed Net Assets, Assigned Net Assets and Unassigned Net Assets 
D)  Restricted Fund balance, Committed Fund balance and Spendable Fund Balance 
A)  Net Assets Invested in Capital Assets Net of Related Debt, Restricted Net Assets and Unrestricted Net Assets 
B)  Spendable Net Assets and Spendable Net Assets 
C)  Committed Net Assets, Assigned Net Assets and Unassigned Net Assets 
D)  Restricted Fund balance, Committed Fund balance and Spendable Fund Balance

Question 9

The most numerous and important enterprise services rendered by local governments are public utilities.

Accepted Answer

A) True 
 B)False

Question 10

Pollution remediation costs:

Accepted Answer

A)  Are recorded as expenses when incurred if they will be paid from current resources. 
B)  Are to be accrued as a liability in the basic financial statements as required by GASB Statement 49. 
C)  Can be the responsibility of state and local governments even if the government did not operate, but merely used the site. 
D)  B and C are correct statements. 
A)  Are recorded as expenses when incurred if they will be paid from current resources. 
B)  Are to be accrued as a liability in the basic financial statements as required by GASB Statement 49. 
C)  Can be the responsibility of state and local governments even if the government did not operate, but merely used the site. 
D)  B and C are correct statements.

Question 11

In a proprietary fund Statement of Net Assets,which of the following is not true?

Accepted Answer

A)  Net assets are reported only by restricted and unrestricted categories. 
B)  GASB requires a classified format, where current assets, noncurrent assets, current liabilities, and noncurrent liabilities are separately reported. 
C)  Net assets that are restricted are presented separately. 
D)  Net assets may be unrestricted. 
A)  Net assets are reported only by restricted and unrestricted categories. 
B)  GASB requires a classified format, where current assets, noncurrent assets, current liabilities, and noncurrent liabilities are separately reported. 
C)  Net assets that are restricted are presented separately. 
D)  Net assets may be unrestricted.

Question 12

The two types of proprietary funds include:

Accepted Answer

A)  Enterprise funds and capital projects funds. 
B)  Enterprise funds and internal service funds. 
C)  Internal service funds and capital project funds. 
D)  Agency funds and enterprise funds. 
A)  Enterprise funds and capital projects funds. 
B)  Enterprise funds and internal service funds. 
C)  Internal service funds and capital project funds. 
D)  Agency funds and enterprise funds.

Question 13

According to GASB 34,restricted net assets include those that are the results of constraints imposed by law through constitutional provisions or enabling legislation.

Accepted Answer

A) True 
 B)False

Question 14

The City of Brewster operated a motor pool fund as an internal service fund.A loan of $600,000 was made from an enterprise fund,to be repaid over 10 years with no interest.Capital assets were purchased as follows: land,$200,000; buildings (40 year life),$800,000; equipment (10 year life),$300,000; automobiles (4 year life,)$1,250,000.In addition,fuel costs were expected to be $100,000 and salaries were expected to be $200,000.A budget is prepared to breakeven,using full accrual accounting,plus pay back one year's principal on the loan.It is anticipated that cars will be driven 2,000,000 miles.The cost per mile would be:

Accepted Answer

A)  $0.39. 
B)  $0.33. 
C)  $0.36. 
D)  $0.23. 
A)  $0.39. 
B)  $0.33. 
C)  $0.36. 
D)  $0.23.

Question 15

Proprietary funds use the economic resources measurement focus and modified accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following would generally be included in the Statement of Net Assets of an Enterprise Fund?

Accepted Answer

A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D 
A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D

Question 17

Long term debt serviced from proprietary funds are recorded in the proprietary fund.

Accepted Answer

A) True 
 B)False

Question 18

An internal service fund is required whenever an activity is funded by fees or charges from other government departments.

Accepted Answer

A) True 
 B)False

Question 19

Funds that are used to account for activities similar to those often engaged in by profit-seeking businesses are:

Accepted Answer

A)  Proprietary funds. 
B)  Special revenue funds. 
C)  Capital project funds. 
D)  Agency funds. 
A)  Proprietary funds. 
B)  Special revenue funds. 
C)  Capital project funds. 
D)  Agency funds.

Question 20

Municipal solid waste landfills,when accounted for as proprietary funds,record a liability for closure and post-closure care costs; recording expenses on a units of production basis.

Accepted Answer

A) True 
 B)False

Which of the following is not true regarding enterprise funds?

Capital assets of an enterprise fund should be reported in the:

The Proprietary Fund Statement of Net Assets must classify assets and liabilities between current and long-term.

Which of the following is correct with respect to Internal Service Funds?

Which of the following would not be true regarding internal service funds?

When preparing the Statement of Cash Flows for the Proprietary Fund,cash flows from noncapital financing activities include all of the following EXCEPT:

Which of the following is not true regarding enterprise funds?

The categories of Net assets for a proprietary fund are classified within which of the following categories?

The most numerous and important enterprise services rendered by local governments are public utilities.

Pollution remediation costs:

In a proprietary fund Statement of Net Assets,which of the following is not true?

The two types of proprietary funds include:

According to GASB 34,restricted net assets include those that are the results of constraints imposed by law through constitutional provisions or enabling legislation.

Proprietary funds use the economic resources measurement focus and modified accrual basis of accounting.

Which of the following would generally be included in the Statement of Net Assets of an Enterprise Fund?

Long term debt serviced from proprietary funds are recorded in the proprietary fund.

An internal service fund is required whenever an activity is funded by fees or charges from other government departments.

Funds that are used to account for activities similar to those often engaged in by profit-seeking businesses are:

Municipal solid waste landfills,when accounted for as proprietary funds,record a liability for closure and post-closure care costs; recording expenses on a units of production basis.

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

Which of the following is not true regarding enterprise funds?

Capital assets of an enterprise fund should be reported in the:

The Proprietary Fund Statement of Net Assets must classify assets and liabilities between current and long-term.

Which of the following is correct with respect to Internal Service Funds?

Which of the following would not be true regarding internal service funds?

When preparing the Statement of Cash Flows for the Proprietary Fund,cash flows from noncapital financing activities include all of the following EXCEPT:

Which of the following is not true regarding enterprise funds?

The categories of Net assets for a proprietary fund are classified within which of the following categories?

The most numerous and important enterprise services rendered by local governments are public utilities.

Pollution remediation costs:

In a proprietary fund Statement of Net Assets,which of the following is not true?

The two types of proprietary funds include:

According to GASB 34,restricted net assets include those that are the results of constraints imposed by law through constitutional provisions or enabling legislation.

Proprietary funds use the economic resources measurement focus and modified accrual basis of accounting.

Which of the following would generally be included in the Statement of Net Assets of an Enterprise Fund?

Long term debt serviced from proprietary funds are recorded in the proprietary fund.

An internal service fund is required whenever an activity is funded by fees or charges from other government departments.

Funds that are used to account for activities similar to those often engaged in by profit-seeking businesses are:

Municipal solid waste landfills,when accounted for as proprietary funds,record a liability for closure and post-closure care costs; recording expenses on a units of production basis.

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