Exam 4: Accounting for Governmental Operating Activitiesillustrative Transactions and Financial Statements

When an activity accounted for by the General Fund issues purchase orders or contracts for goods or services a record must be kept,but no journal entries in the General Fund are necessary.

Regular periodic transfers of resources raised by one fund to another fund that is to use the resources are classified as "interfund transfers."

The Governmental Activities column of the government-wide statement of net assets differs from the General Fund balance sheet in that it reports both current and noncurrent assets and liabilities,reports financial information for all governmental funds,not just the General Fund,and reports net assets rather than fund balances.

Which of the following transactions is classified as an exchange transaction rather than a nonexchange transaction?

Which of the following are reported in the functions/programs section of the statement of activities at the government-wide level where they reduce the net expense of each function or produce a net revenue?

Which of the following assets would appropriately be reported on the governmental funds balance sheet?

The following are key terms in Chapter 4 that relate to exchange and nonexchange transactions: A.Derived tax revenues B.Exchange-like transactions C.Nonexchange transactions D.Nonexchange revenue E.Voluntary nonexchange transactions F.Imposed nonexchange revenue G.Exchange transactions H.Time restrictions I.Purpose restrictions J.Eligibility requirements For each of the following definitions,indicate the key term from the list above that best matches by placing the appropriate letter in the blank space next to the definition.

If one fund is both a debtor and creditor of a second fund,both funds must report the full amounts receivable and payable in their year-end balance sheets.

Which of the following accounts would not be closed at the end of each fiscal year?

Which of the following journal entries should be made to close the Encumbrances account at the end of the fiscal year?

An interim schedule comparing the detailed budgeted revenues with actual revenues should be prepared on an appropriate periodic basis to determine whether budgeted revenues are being realized as expected so that timely corrective action can be taken if necessary.

The General Fund is used to account for:

Liabilities incurred,such as for accrued payroll,but still unpaid at year-end,should be recorded in the General Fund by a debit to which of the following accounts?

The Revenues account of a government is debited when

Beach City received a gift of corporate stock valued at $1,200,000 on the date of the gift.The donor specified that the principal amount of the gift be maintained in perpetuity,but that earnings can be used to acquire works of art to improve the appearance of public buildings.All changes in fair value are to increase or decrease the principal amount of the gift.Assuming that Beach City uses a permanent fund to account for the endowment and a special revenue fund to account for the earmarked earnings from the endowment,explain the accounting process for (1)receipt of the original gift, (2)receipt of quarterly dividends, (3)notification that fair value of the original stock increased by $3,000 during the year,and (4)the effect on fund balances of closing temporary accounts at year-end.(Note: Ignore the effects of the transactions at the government-wide level.

Governments,unlike business organizations,generally do not incur expenditures/expenses for the employer's share of FICA taxes and for contributions to other retirement plans established by law.

Which of the following financial statement(s)reports both current and noncurrent assets and liabilities?

During January 2011 General Fund supplies ordered in the previous fiscal year and encumbered at an estimated amount of $2,000 were received at an actual cost of $2,200.The entry to record this transaction will require a debit to

The General Fund has transferred cash to the appropriate fund for eventual retirement of term bonds maturing in 10 years.Which funds would record this transaction?

An interim schedule comparing the detail of appropriations,expenditures,and encumbrances should be prepared on an appropriate periodic basis to determine whether appropriations are being expended at the expected rate for the period and for the budget year to date.