Question 1

The reconciliation on the statement of cash flows for a proprietary fund under GASB requirements is between operating income and cash flows from operating activities.

Accepted Answer

A) True 
 B)False

Question 2

The operation of internal service funds has important implications for other funds. Which of the following statements isincorrect?

Accepted Answer

A)  Charges for services of the internal service fund are recorded as expenditures in the governmental fund purchasing the services. 
B)  GASB standards require the use of internal service funds to facilitate comparisons between governments 
C)  If the expenditures for the purchasing entity is recorded in the General Fund, a positive operating income in the internal service fund would mean that the expenditures reported in the General Fund exceed the true cost of operating the government. 
D)  The problems created by internal service funds are resolved when the government-wide statements are prepared. 
A)  Charges for services of the internal service fund are recorded as expenditures in the governmental fund purchasing the services. 
B)  GASB standards require the use of internal service funds to facilitate comparisons between governments 
C)  If the expenditures for the purchasing entity is recorded in the General Fund, a positive operating income in the internal service fund would mean that the expenditures reported in the General Fund exceed the true cost of operating the government. 
D)  The problems created by internal service funds are resolved when the government-wide statements are prepared.

Question 3

Activities that produce goods or services to be provided to other departments or other governmental units would be reported in which fund?

Accepted Answer

A)  Internal service fund. 
B)  Advance fund. 
C)  Enterprise fund. 
D)  Agency fund. 
A)  Internal service fund. 
B)  Advance fund. 
C)  Enterprise fund. 
D)  Agency fund.

Question 4

Which of the following statements is true regarding proprietary funds?

Accepted Answer

A)  Accruals and deferrals common to business accounting are recorded in proprietary funds. 
B)  GASB standards require budget-actual reporting for proprietary funds. 
C)  The purchase of a capital asset is recorded as an expenditure in proprietary funds. 
D)  Proprietary funds use the modified accrual basis of accounting. 
A)  Accruals and deferrals common to business accounting are recorded in proprietary funds. 
B)  GASB standards require budget-actual reporting for proprietary funds. 
C)  The purchase of a capital asset is recorded as an expenditure in proprietary funds. 
D)  Proprietary funds use the modified accrual basis of accounting.

Question 5

According to GASB, Enterprise funds must be used when:

Accepted Answer

A)  Debt is backed solely by fees and charges. 
B)  A legal requirement exists that the cost of providing services for an activity, including capital costs, be recovered through fees or charges. 
C)  A government has a policy to establish fees and charges to cover the cost of providing services for an activity. 
D)  Any of the above apply. 
A)  Debt is backed solely by fees and charges. 
B)  A legal requirement exists that the cost of providing services for an activity, including capital costs, be recovered through fees or charges. 
C)  A government has a policy to establish fees and charges to cover the cost of providing services for an activity. 
D)  Any of the above apply.

Question 6

Proprietary funds are required to have a Statement of Revenues, Expenses, and Change in Fund Net Position, a Statement of Net Position, but not a Statement of Cash Flows.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true regarding the recording of long term debt in an enterprise fund?

Accepted Answer

A)  When revenue bonds are sold at par, Cash is debited and Bonds Payable is credited. 
B)  The bonds would be reported in both an enterprise fund and in the government-wide statements. 
C)  Both of the above. 
D)  Neither of the above. 
A)  When revenue bonds are sold at par, Cash is debited and Bonds Payable is credited. 
B)  The bonds would be reported in both an enterprise fund and in the government-wide statements. 
C)  Both of the above. 
D)  Neither of the above.

Question 8

With respect to proprietary funds, the net position i.e., fund equity) section of the Statement of Net Position is displayed within two categories: Restricted and Unrestricted Net Position.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is false regarding the cash flow statements of a proprietary fund?

Accepted Answer

A)  A reconciliation is required between the Statement of Revenues, Expenses, and Changes in Fund Net Position and the cash flows from operating activities section of the Cash Flow Statement. 
B)  Interest payments are reported as increases in cash flows from either capital and related financing or noncapital financing activities, whichever is appropriate. 
C)  Purchases of equipment would be reported in the investing section. 
D)  None of the above - these are all true. 
A)  A reconciliation is required between the Statement of Revenues, Expenses, and Changes in Fund Net Position and the cash flows from operating activities section of the Cash Flow Statement. 
B)  Interest payments are reported as increases in cash flows from either capital and related financing or noncapital financing activities, whichever is appropriate. 
C)  Purchases of equipment would be reported in the investing section. 
D)  None of the above - these are all true.

Question 10

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 termed "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 termed "Fund Balance."

Question 11

Proprietary funds utilize what basis of accounting?

Accepted Answer

A)  Modified accrual. 
B)  Accrual. 
C)  Cash. 
D)  Budgetary. 
A)  Modified accrual. 
B)  Accrual. 
C)  Cash. 
D)  Budgetary.

Question 12

Which of the following is an example of an Internal Service Fund?

Accepted Answer

A)  State Risk Management Fund 
B)  County Water and Sewer Utilities. 
C)  State Lotteries. 
D)  Municipal Golf Courses. 
A)  State Risk Management Fund 
B)  County Water and Sewer Utilities. 
C)  State Lotteries. 
D)  Municipal Golf Courses.

Question 13

Norton County operated a landfill, and accounted for it as an enterprise fund. The closure and post-closure care costs are estimated to be $20,000,000. It is estimated that the capacity of the landfill is 5 million tons of waste and that waste will be accepted for 10 years. During 2017, 750,000 tons of waste was accepted by the landfill. The charge for closure and post-closure care costs for 2017 would be:

Accepted Answer

A)  $ 750,000. 
B)  $2,000,000. 
C)  $3,000,000. 
D)  Impossible to determine from the information given. 
A)  $ 750,000. 
B)  $2,000,000. 
C)  $3,000,000. 
D)  Impossible to determine from the information given.

Question 14

Impact fees charged to real estate developers are recorded in an enterprise fund as capital contributions, a nominal account that will increase Net Position, but is reported separately in the statement of Revenues, Expenses and Changes in Fund Net Position.

Accepted Answer

A) True 
 B)False

Question 15

The Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net Position must include a performance indicator, such as operating income.

Accepted Answer

A) True 
 B)False

Question 16

According to GASB, enterprise funds must be used in which of the following circumstances?

Accepted Answer

A)  When debt is backed solely by fees and charges. 
B)  When services are provided to other governmental units for a fee. 
C)  When the activities are expected to make a profit to be used to fund other government programs. 
D)  None of the above; enterprise funds are optional. 
A)  When debt is backed solely by fees and charges. 
B)  When services are provided to other governmental units for a fee. 
C)  When the activities are expected to make a profit to be used to fund other government programs. 
D)  None of the above; enterprise funds are optional.

Question 17

Solid waste landfills are required to estimate the cost of closure which include:

Accepted Answer

A)  Cost of equipment used. 
B)  Cost of landfill cover. 
C)  Cost of caring for the site for 30 years. 
D)  All of the above. 
A)  Cost of equipment used. 
B)  Cost of landfill cover. 
C)  Cost of caring for the site for 30 years. 
D)  All of the above.

Question 18

In the government-wide statements, Internal Service Funds are an ______ activity, whereas Enterprise Funds are typically an ______activity.

Accepted Answer

A)  business-type; governmental. 
B)  governmental; business-type. 
C)  restricted; unrestricted. 
D)  unrestricted; restricted. 
A)  business-type; governmental. 
B)  governmental; business-type. 
C)  restricted; unrestricted. 
D)  unrestricted; restricted.

Question 19

An enterprise fund is required if there is a legal requirement that the cost of providing services for an activity, including capital costs, be recovered through fees or charges.

Accepted Answer

A) True 
 B)False

Question 20

Proprietary Funds use the accrual basis of accounting.

Accepted Answer

A) True 
 B)False

The reconciliation on the statement of cash flows for a proprietary fund under GASB requirements is between operating income and cash flows from operating activities.

The operation of internal service funds has important implications for other funds. Which of the following statements isincorrect?

Activities that produce goods or services to be provided to other departments or other governmental units would be reported in which fund?

Which of the following statements is true regarding proprietary funds?

According to GASB, Enterprise funds must be used when:

Proprietary funds are required to have a Statement of Revenues, Expenses, and Change in Fund Net Position, a Statement of Net Position, but not a Statement of Cash Flows.

Which of the following is true regarding the recording of long term debt in an enterprise fund?

With respect to proprietary funds, the net position i.e., fund equity) section of the Statement of Net Position is displayed within two categories: Restricted and Unrestricted Net Position.

Which of the following is false regarding the cash flow statements of a proprietary fund?

Which of the following is not true regarding enterprise funds?

Proprietary funds utilize what basis of accounting?

Which of the following is an example of an Internal Service Fund?

Impact fees charged to real estate developers are recorded in an enterprise fund as capital contributions, a nominal account that will increase Net Position, but is reported separately in the statement of Revenues, Expenses and Changes in Fund Net Position.

The Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net Position must include a performance indicator, such as operating income.

According to GASB, enterprise funds must be used in which of the following circumstances?

Solid waste landfills are required to estimate the cost of closure which include:

In the government-wide statements, Internal Service Funds are an activity, whereas Enterprise Funds are typically an activity.

An enterprise fund is required if there is a legal requirement that the cost of providing services for an activity, including capital costs, be recovered through fees or charges.

Proprietary Funds use the accrual basis of accounting.

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 Funds, Interfund Transactions

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

Exam 6: Proprietary Funds

The reconciliation on the statement of cash flows for a proprietary fund under GASB requirements is between operating income and cash flows from operating activities.

The operation of internal service funds has important implications for other funds. Which of the following statements isincorrect?

Activities that produce goods or services to be provided to other departments or other governmental units would be reported in which fund?

Which of the following statements is true regarding proprietary funds?

According to GASB, Enterprise funds must be used when:

Proprietary funds are required to have a Statement of Revenues, Expenses, and Change in Fund Net Position, a Statement of Net Position, but not a Statement of Cash Flows.

Which of the following is true regarding the recording of long term debt in an enterprise fund?

With respect to proprietary funds, the net position i.e., fund equity) section of the Statement of Net Position is displayed within two categories: Restricted and Unrestricted Net Position.

Which of the following is false regarding the cash flow statements of a proprietary fund?

Which of the following is not true regarding enterprise funds?

Proprietary funds utilize what basis of accounting?

Which of the following is an example of an Internal Service Fund?

Impact fees charged to real estate developers are recorded in an enterprise fund as capital contributions, a nominal account that will increase Net Position, but is reported separately in the statement of Revenues, Expenses and Changes in Fund Net Position.

The Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net Position must include a performance indicator, such as operating income.

According to GASB, enterprise funds must be used in which of the following circumstances?

Solid waste landfills are required to estimate the cost of closure which include:

In the government-wide statements, Internal Service Funds are an ______ activity, whereas Enterprise Funds are typically an ______activity.

An enterprise fund is required if there is a legal requirement that the cost of providing services for an activity, including capital costs, be recovered through fees or charges.

Proprietary Funds use the accrual basis of accounting.

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 Funds, Interfund Transactions

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

In the government-wide statements, Internal Service Funds are an activity, whereas Enterprise Funds are typically an activity.