Exam 17: Governmental Entities: Introduction and General Fund Accounting

Which of the following statements best describes the reporting process for profit seeking and governmental entities?

The town of Stow was incorporated and began governmental operations on July 1,20X8.Stow's transactions and events for the fiscal year ended June 30,20X9,are listed below.Stow uses the consumption method of accounting for purchases of supplies.Encumbrances do not lapse at year end. Required: Prepare the journal entry(ies)required in the general fund for each of the following transactions or events. a.The town budget was approved,providing for revenues of $800,000,a $40,000 transfer to establish an internal service fund (ISF),and expenditures of $750,000. b.Property taxes were levied in the amount of $700,000,with 4 percent of the total estimated to be uncollectible. c.Purchase orders were issued in the amount of $90,000 for equipment,and $635,000 for other goods and services. d.Collections for fines and licenses totaled $99,000 for the year. e.Property taxes collected amounted to $680,000;the balance was reclassified as delinquent,and the allowance for uncollectible taxes was reduced to $15,000. f.The equipment ordered was received,and a voucher was issued for the final invoice cost of $91,000. g.All but $12,000 of the other goods and services ordered was received.Vouchers were issued for the invoice cost of $622,000. h.All but $10,000 of the vouchers issued during the year was paid. i.A transfer in the amount of $40,000 was made to establish an internal service fund for the town.The general fund received services of $7,000 from the internal service fund during the year,with $2,000 remaining unpaid at year end. j.Expenditures recorded for the year included the purchase of supplies.The estimated balance of supplies on hand at year end was $2,000. k.A reserve was established at year end for the outstanding encumbrances,all of which will be honored in the next fiscal year. l.Closing entries were made.

Identify the legal term that allows the general fund to make expenditures.

The following information was obtained from the general fund balance sheet of Lincoln County on June 30,20X2,the close of its fiscal year: On June 30,20X2,what was Lincoln's unassigned fund balance in its general fund?

Which of the following funds are classified as proprietary funds?

Which of the following items should not be included as revenue for a state government?

Which of the following describes how a governmental fund (e.g.general fund)accounts for a capital lease?

Which of the following funds are classified as governmental funds?

At the end of the fiscal year,uncollected property taxes in the general fund should be:

Which of the following funds should use the accrual basis of accounting?

The general fund of Wold Township ordered office furniture for the mayor's office on August 1,20X8.The office furniture was estimated to cost $12,000.The office furniture was received on September 1,20X8,with the actual cost being $11,800.Which of the following accounts decreased on September 1,20X8?

In a statement of revenues,expenditures,and changes in fund balance,the unassigned fund balance will be increased by: I.a decrease in the fund balance-Nonspendable. II.an excess of other financing sources over other financing uses.

Goshen City acquires $36,000 of inventory on November 1,20X5,having held no inventory previously.On December 31,20X5,the end of Goshen City's fiscal year,a physical count shows $7,000 still in stock.During 20X6,$5,000 of this inventory is used,resulting in a $2,000 remaining balance of supplies on December 31,20X6. -Based on the preceding information,which of the following would be the correct account balances for 20X5 if Goshen City used the consumption method of accounting for inventories?

The general fund of Sun City was billed $7,000 for using the services of one of its internal service funds.The general fund should account for this transaction as an:

Under the modified accrual basis of accounting for the general fund,expenditures should be recognized in the period in which the related liability is: I.paid. II.incurred.

Discuss major differences between a governmental entity's uses of the modified accrual method and a for-profit corporation's use of the accrual method.

The Town of Baker reported the following items on the June 30,20X9,balance sheet of its general fund: At June 30,20X9,what amount should be reported for Fund Balance-Unassigned?

Which of the following funds provides goods and services only to other departments or agencies of the government on a cost-reimbursement basis?

Which of the financial statements described below is prepared by the general fund of a state or local government?

Goshen City acquires $36,000 of inventory on November 1,20X5,having held no inventory previously.On December 31,20X5,the end of Goshen City's fiscal year,a physical count shows $7,000 still in stock.During 20X6,$5,000 of this inventory is used,resulting in a $2,000 remaining balance of supplies on December 31,20X6. -Based on the preceding information,which of the following would be the correct account balances for 20X6 if Goshen City used the purchase method of accounting for inventories?