Exam 19: An Introduction to Accounting for State and Local Governmental Units

Because a fund is an accounting entity,each fund has I.its own accounting equation. II.its own journals,ledgers,and other accounting records. III.its own separate auditor.

For each of the following events or transactions,identify the fund or funds that will be affected. 1.A city government charges a fee for the use of the municipal golf course. 2.Interest is paid on state government revenue bonds. 3.A motor pool was established to handle the vehicle needs of a county government. 4.Paid salaries for general governmental employees. 5.Accrued salaries for general governmental employees.

Approved or authorized expenditures that provide legislative control over the expenditure budget are referred to as

The modified accrual basis of accounting is used for

The following are transactions for the city of Springfield. a.Borrowed $20,000 by issuing a three-month,5% note. b.Paid $4,000 for equipment. c.Services for $1,000 were billed and collected. d.Year-end accrual of 3 months interest on note in (a). Required: Analyze the above transactions by using the accounting equation for a governmental fund.

Match the following definitions to the appropriate government accounting terms (numbered below). A.Legally separate organization for which primary government is financially accountable B.The use of governmental fund working capital C.Appropriation for a specific time period D.Governmental and Proprietary fund revenues and expenses presented using full accrual accounting E.Approved or authorized expenditures F.Revenues recognized when available to meet current obligations G.Self-balancing set of accounts H.Each state government and each general-purpose local government I.The responsibility to demonstrate compliance with public decisions with regard to the use of financial resources J.Governmental and Internal Service Funds assets and liabilities presented together ________ 1.Modified Accrual Basis ________ 2.Fund ________ 3.Primary Government ________ 4.Appropriation ________ 5.Statement of Net Assets ________ 6.Fiscal Accountability ________ 7.Allotment ________ 8.Component Unit ________ 9.Statement of Activities ________ 10.Expenditures

The following are transactions for the city of Clinton. a.Borrowed $100,000 by issuing a one-year,5% note,three months before year-end. b.Accrued interest at year end,but did not pay the interest at year end. c.Charges for services rendered of $2,500 were billed and collected immediately. d.Incurred salary costs of $5,000,unpaid. Required: Analyze the above transactions by using the accounting equation for a proprietary fund.

The following are transactions for the city of Greenville. a.Issued $50,000 10-year bonds. b.Used $30,000 of the cash to buy a truck. c.Sold the truck that was replaced which had cost $28,000,for $2,000.The old truck was fully depreciated.Residual value is zero. d.Computed depreciation on the new truck for the year of $6,000. Required: Analyze the above transactions by using the accounting equation for a proprietary fund.

A comprehensive annual financial report has the following three major sections:

Governmental accounting differs from corporate financial accounting primarily because

The key focus of government fund accounting concerns

For each of the following events or transactions,identify the type of fund(s)that will be affected. 1.A central purchasing department was established to handle all the purchasing needs of a county government. 2.A county government levies sales taxes restricted as to use for job creation. 3.A county government receives a large contribution specifying that income from the contribution be distributed each year to the county zoo.The principal is to remain intact indefinitely. 4.A city government paid construction costs of $12,000 on city hall building. 5.A city government paid general operating costs.

Using the revenue types shown below,match each of the revenue sources to a revenue type.Each revenue type may be used more than once. A.Derived Tax Revenues B.Imposed Nonexchange Revenues C.Government-Mandated Nonexchange Transactions D.Voluntary Nonexchange Transactions ________ 1.Corporate income tax ________ 2.Sales taxes ________ 3.Liquor taxes ________ 4.Fines and penalties paid to a government entity ________ 5.Cigarette taxes ________ 6.Personal income tax ________ 7.Donation made to a government entity ________ 8.Motor fuel tax ________ 9.Property tax

Under the modified accrual basis of accounting,revenues are recognized in the period

What basis of accounting is used to prepare Government-wide financial statements?

Which fund would most likely report depreciation expense?

For each of the following transactions that could be introduced to fund the maintenance of the city park,state the type of fund(s)that would be affected.Assume that a capital project fund will be used to handle any long-term improvements or additions to the park. 1.Resources used to make 60 monthly installments on outstanding long-term debt. 2.Implemented a tax on alcohol purchases specifically designated for the park upkeep. 3.A local sports organization that uses the park raises funds and donates the money,stating that the principal may not be spent,but designating earnings to the park upkeep. 4.City council approves the funds from existing resources for the upkeep required in the upcoming year. 5.Resources used only to pay principal and interest of debt outstanding to finance park maintenance.

Centralized data processing,central motor pools and garages,centralized risk-financing activities,and central stores typically would be accounted for using what type of fund?