Question 1

How is the Statement of Cash Flows for Proprietary Funds similar and dissimilar to a Statement of Cash Flows for a for-profit business?

Accepted Answer

The statement of cash flows for a proprietary fund is very similar to the statement of cash flows for a for-profit business.Two sections are similar including the cash flows from operating activities and cash flows from investing activities.The cash flows from financing activities are reported differently than for profit businesses and are split into two sections when reporting for a Proprietary Fund.These two sections specify the cash flows from noncapital financing and cash flows from capital and related financing activities.The statement of cash flows for a proprietary fund is different from the cash flow statement for a for-profit business in that GASB requires the direct method of presenting cash flows from operating activities,with a reconciliation to net operating income.At this time,GAAP for the cash flow statement for a for-profit business gives the option of presenting cash flows from operating activities using either the direct or the indirect method.

Question 2

Which of the following is true regarding Management's Discussion and Analysis (MD&A)?

Accepted Answer

A) MD&A should provide an objective analysis of the financial activities based on currently known facts,decisions,or conditions. 
B) MD&A should disclose total assets and liabilities for all substantial component units. 
C) Management should provide a cash flow projection for at least three consecutive fiscal years in MD&A. 
D) MD&A is optional for city governments. 
E) MD&A is the final element of the introductory section of the comprehensive annual financial report (CAFR). 
A) MD&A should provide an objective analysis of the financial activities based on currently known facts,decisions,or conditions. 
B) MD&A should disclose total assets and liabilities for all substantial component units. 
C) Management should provide a cash flow projection for at least three consecutive fiscal years in MD&A. 
D) MD&A is optional for city governments. 
E) MD&A is the final element of the introductory section of the comprehensive annual financial report (CAFR). A

Question 3

The City of Wetteville has a fiscal year ending June 30.  Examine the following transactions for Wetteville:
 (A.) On 6/5/18, Wetteville opens a new landfill.  The engineers estimate that at the end of 10 years the landfill will be full.  Estimated costs to close the landfill are currently $3,500,000.
(B.) On 6/18/18, Wetteville receives a donation of a vintage railroad steam engine.  The engine will be put on display at the local town park.  A fee will be charged to actually climb up into the engine.  The engine has been valued at $500,000. 
 (C.) On 6/30/18, Wetteville estimates that the landfill is 2% filled.

-Determine and prepare the journal entries for the City of Wetteville,on the dates mentioned for each lettered item,for the purposes of preparing the government-wide financial statements.

Accepted Answer

Entries for preparing government-wide financial statements
 A) $ 6 / 5 \quad $ No entry at time of opening

B) 
$\begin{array}{llr}
  6 / 18& \text { Vintage Steam Engine } &500,000.00\
& \text {Revenue - Donation  } &&500,000.00\
\end{array}$

C)
$\begin{array}{llr}
6 / 30&  \text { Expense - Landfill Closure } &70,000.00\
& \text { Landfill Closure Liability } &&70,000.00\
 \text {  } &
\end{array}$

Question 4

Which item is not included on the government-wide Statement of Activities?

Accepted Answer

A) Revenues. 
B) Expenses. 
C) Assets. 
D) Operating grants. 
E) Capital contributions. 
A) Revenues. 
B) Expenses. 
C) Assets. 
D) Operating grants. 
E) Capital contributions.

Question 5

A city starts a solid waste landfill during 2017. When the landfill was opened the city estimated that it would fill to capacity within 5 years and that the cost to cover the facility would be $1.5 million which will not be paid until the facility is closed.  At the end of 2017, the facility was 20% full, and at the end of 2018 the facility was 45% full.   
-On government-wide financial statements,which of the following are the appropriate amounts to present in the financial statements for 2018?

Accepted Answer

A) Both expense and liability will be zero. 
B) Expense will be $300,000 and liability will be $600,000. 
C) Expense will be $600,000 and liability will be $600,000. 
D) Expense will be $675,000 and liability will be $600,000. 
E) Expense will be $375,000 and liability will be $675,000. 
A) Both expense and liability will be zero. 
B) Expense will be $300,000 and liability will be $600,000. 
C) Expense will be $600,000 and liability will be $600,000. 
D) Expense will be $675,000 and liability will be $600,000. 
E) Expense will be $375,000 and liability will be $675,000.

Question 6

The Town of Wakefield opened a solid waste landfill in 2017 that was at 20% capacity on December 31, 2017 and at 50% capacity on December 31, 2018. The city initially anticipated closure costs of $2.3 million but in 2018 revised the estimate of the closure costs to be $2.7 million. None of these costs will be incurred until the landfill is scheduled to be closed.
-Assuming the landfill is recorded within the General fund,how would the landfill information be represented in the governmental fund financial statements at December 31,2018?

Accepted Answer

There is nothing recognized in the balan

Question 7

Which of the following statements regarding Management's Discussion and Analysis is true?

Accepted Answer

A) MD&A is required only for Proprietary Fund Financial Statements. 
B) MD&A is reported in the statistical section of the annual report. 
C) MD&A is required for comprehensive annual financial reports. 
D) MD&A for state and local government financial statements must include an analysis of potential,untapped revenue sources. 
E) MD&A is an optional inclusion for state and local government financial statements. 
A) MD&A is required only for Proprietary Fund Financial Statements. 
B) MD&A is reported in the statistical section of the annual report. 
C) MD&A is required for comprehensive annual financial reports. 
D) MD&A for state and local government financial statements must include an analysis of potential,untapped revenue sources. 
E) MD&A is an optional inclusion for state and local government financial statements.

Question 8

Which statement is false regarding the Balance Sheet for Governmental Fund Financial Statements?

Accepted Answer

A) The Balance Sheet for Governmental Fund Financial Statements measures only current financial resources of the governmental entity. 
B) The Balance Sheet for Governmental Fund Financial Statements uses the modified accrual method for timing purposes. 
C) Capital Assets are not reported on the Balance Sheet for Governmental Fund Financial Statements. 
D) The Balance Sheet for Governmental Fund Financial Statements measures only long-term financial resources of the governmental entity. 
E) Long-term debts are not reported on the Balance Sheet for Governmental Fund Financial Statements. 
A) The Balance Sheet for Governmental Fund Financial Statements measures only current financial resources of the governmental entity. 
B) The Balance Sheet for Governmental Fund Financial Statements uses the modified accrual method for timing purposes. 
C) Capital Assets are not reported on the Balance Sheet for Governmental Fund Financial Statements. 
D) The Balance Sheet for Governmental Fund Financial Statements measures only long-term financial resources of the governmental entity. 
E) Long-term debts are not reported on the Balance Sheet for Governmental Fund Financial Statements.

Question 9

Which of the following is a section of the financial section of the comprehensive annual financial report (CAFR)of a state or local government?
(1)Management's discussion and analysis (MD&A).
(2)Required supplementary information (other than MD&A).
(3) )Basic financial statements and notes to financial statements.

Accepted Answer

A) 1 and 2. 
B) 2 and 3. 
C) 1 and 3. 
D) 3 only. 
E) 1,2,and 3. 
A) 1 and 2. 
B) 2 and 3. 
C) 1 and 3. 
D) 3 only. 
E) 1,2,and 3.

Question 10

Which criteria must be met to be considered a special purpose government?
(1) )Have a separately elected governing body
(2) )Be legally independent
(3) )Be fiscally independent

Accepted Answer

A) 1 only. 
B) 1 and 2. 
C) 2 and 3. 
D) 1 and 3. 
E) 1,2,and 3. 
A) 1 only. 
B) 1 and 2. 
C) 2 and 3. 
D) 1 and 3. 
E) 1,2,and 3.

Question 11

Use the following to answer questions 
The Town of Portsmouth has at the beginning of the year a $213,000 Net Position balance,and a $52,000 Fund Balance.
The following information relates to the activities within the Town of Portsmouth for the year of 2018.
  
-Prepare a Statement of Net Position at December 31,2018.

Accepted Answer

The answer of Use the following to answer questions 
The...

Question 12

The City of Kamen maintains a collection of paintings of a former citizen in its City Hall building.  During the year, one painting was purchased by the city for $2,000 at an auction using appropriated funds in the General Fund.  Also during the year, a donation of a painting valued at $3,000 was made to the city.
-Prepare the journal entry/entries for the two transactions for the purposes of preparing the government-wide financial statements.

Accepted Answer

Government-wide financial statements - G

Question 13

All of the following are true about the modified approach to infrastructure depreciation except:

Accepted Answer

A) If specific guidelines are met,a government can choose to expense all maintenance costs each year in lieu of recording depreciation. 
B) The modified approach specifically excludes infrastructure assets within a network or subsystem of a network. 
C) If specific guidelines are met,additions and improvements must be capitalized. 
D) For eligible assets,the government must establish a minimum acceptable condition level. 
E) The government must have an asset management system in place to monitor the eligible assets. 
A) If specific guidelines are met,a government can choose to expense all maintenance costs each year in lieu of recording depreciation. 
B) The modified approach specifically excludes infrastructure assets within a network or subsystem of a network. 
C) If specific guidelines are met,additions and improvements must be capitalized. 
D) For eligible assets,the government must establish a minimum acceptable condition level. 
E) The government must have an asset management system in place to monitor the eligible assets.

Question 14

Which of the following is a financial statement of a proprietary fund?

Accepted Answer

A) Balance sheet. 
B) Statement of Operations. 
C) Statement of Changes in Cash Flows. 
D) Statement of Net Position. 
E) Statement of Revenues,Expenditures,and Changes in Fund Balance. 
A) Balance sheet. 
B) Statement of Operations. 
C) Statement of Changes in Cash Flows. 
D) Statement of Net Position. 
E) Statement of Revenues,Expenditures,and Changes in Fund Balance.

Question 15

The modified approach to accounting for infrastructure assets may be utilized by a state or local government if:
i.The government accumulates information about all infrastructure assets within either a network or subsystem of a network.
ii.The government capitalizes infrastructure assets.
iii.The government expenses costs of maintaining the infrastructure assets.
iv.The government chooses to depreciate its infrastructure assets.

Accepted Answer

A) i and ii. 
B) i,ii,and iv. 
C) ii and iii. 
D) i,ii,and iii. 
E) i,ii,iii,and iv. 
A) i and ii. 
B) i,ii,and iv. 
C) ii and iii. 
D) i,ii,and iii. 
E) i,ii,iii,and iv.

Question 16

What is meant by the term legally independent?

Accepted Answer

Legal independence is demonstr

Question 17

All of the following about tax abatement agreements must be disclosed by state and local governments except:

Accepted Answer

A) The purpose of the tax abatement program. 
B) The type of tax being abated. 
C) Identify the companies receiving the abatements. 
D) Dollar amount of taxes abated. 
E) Commitments made by the government or other party. 
A) The purpose of the tax abatement program. 
B) The type of tax being abated. 
C) Identify the companies receiving the abatements. 
D) Dollar amount of taxes abated. 
E) Commitments made by the government or other party.

Question 18

What are the three broad sections of a state or local government's CAFR?

Accepted Answer

A) Introductory,financial,and statistical. 
B) Financial statements,notes to the financial statements,and component units. 
C) Introductory,statistical,and component units. 
D) Component units,financial,and statistical. 
E) Financial statements,notes to the financial statements,and statistical. 
A) Introductory,financial,and statistical. 
B) Financial statements,notes to the financial statements,and component units. 
C) Introductory,statistical,and component units. 
D) Component units,financial,and statistical. 
E) Financial statements,notes to the financial statements,and statistical.

Question 19

Which one of the following is a criterion for identifying a primary government?

Accepted Answer

A) it has an appointed board of directors. 
B) it is fiscally dependent. 
C) it is a local government. 
D) it has a separately elected governing board. 
E) it must prepare financial statements. 
A) it has an appointed board of directors. 
B) it is fiscally dependent. 
C) it is a local government. 
D) it has a separately elected governing board. 
E) it must prepare financial statements.

Question 20

The Town of Conway opened a solid waste landfill in 1995 that is filled to capacity in the current year.The city initially anticipated closure costs of $2 million.These costs were not expected to be incurred until the landfill was closed.What is the final journal entry to record these costs assuming the estimated $2 million closure costs were properly recorded and the landfill is accounted for in an enterprise fund?
A)$\begin{array}{lcc} & \text { Expense -Landfill Closure } & 2,000,000 & \
 & \text { Landfill Closure Liability } & & 2,000,000 \\end{array}$

B) $\begin{array}{lcc}& \text { Landfill Closure Liability } & 2,000,000 & \
& \text { Expense - Landfill Closure } & & 2,000,000 \\end{array}$

C) $\begin{array}{lcc} & \text { Expense -Landfill Closure } & 2,000,000 & \
 & \text { Cash } & & 2,000,000 \\end{array}$

D) $\begin{array}{lcc}& \text { Landfill Closure Liability } & 2,000,000 & \
 & \text { Cash } & & 2,000,000 \\end{array}$

E) $\begin{array}{lcc} & \text { Expenditure- Landfill Closure } & 2,000,000 & \
 & \text { Cash } & & 2,000,000 \
\end{array}$

Accepted Answer

The answer of The Town of Conway opened a solid...

How is the Statement of Cash Flows for Proprietary Funds similar and dissimilar to a Statement of Cash Flows for a for-profit business?

Which of the following is true regarding Management's Discussion and Analysis (MD&A)?

Which item is not included on the government-wide Statement of Activities?

Which of the following statements regarding Management's Discussion and Analysis is true?

Which statement is false regarding the Balance Sheet for Governmental Fund Financial Statements?

Which criteria must be met to be considered a special purpose government? (1) )Have a separately elected governing body (2) )Be legally independent (3) )Be fiscally independent

All of the following are true about the modified approach to infrastructure depreciation except:

Which of the following is a financial statement of a proprietary fund?

What is meant by the term legally independent?

All of the following about tax abatement agreements must be disclosed by state and local governments except:

What are the three broad sections of a state or local government's CAFR?

Which one of the following is a criterion for identifying a primary government?

The Equity Method of Accounting for Investments

Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial

Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

Accounting for State and Local Governments, part I

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Exam 12: Accounting for State and Local Governments, part II

How is the Statement of Cash Flows for Proprietary Funds similar and dissimilar to a Statement of Cash Flows for a for-profit business?

Which of the following is true regarding Management's Discussion and Analysis (MD&A)?

Which item is not included on the government-wide Statement of Activities?

Which of the following statements regarding Management's Discussion and Analysis is true?

Which statement is false regarding the Balance Sheet for Governmental Fund Financial Statements?

Which criteria must be met to be considered a special purpose government? (1) )Have a separately elected governing body (2) )Be legally independent (3) )Be fiscally independent

All of the following are true about the modified approach to infrastructure depreciation except:

Which of the following is a financial statement of a proprietary fund?

What is meant by the term legally independent?

All of the following about tax abatement agreements must be disclosed by state and local governments except:

What are the three broad sections of a state or local government's CAFR?

Which one of the following is a criterion for identifying a primary government?

The Equity Method of Accounting for Investments

Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial

Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

Accounting for State and Local Governments, part I

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