Question 1

Post-closure costs are recorded in a solid waste landfill enterprise fund at the present value of estimated future costs.

Accepted Answer

A) True 
 B)False

Question 2

Montgomery County operates a landfill as an enterprise fund. The closure and post-closure care costs are estimated to be $40 million. It is estimated that the capacity of the landfill is 16 million tons of waste and that waste will be accepted for 6 years. During 2017, 4 million tons of waste was accepted. The charge for closure and post-closure care costs for 2017 would be:

Accepted Answer

A)  $ 2.5 million. 
B)  $ 8 million. 
C)  $ 6.67 million. 
D)  $ 10 million. 
A)  $ 2.5 million. 
B)  $ 8 million. 
C)  $ 6.67 million. 
D)  $ 10 million.

Question 3

Proprietary funds:

Accepted Answer

A)  Are required to present budget-actual statements in the fund statements. 
B)  Are required to present a reconciliation between the Statement of Revenues, Expenses, and Changes in Fund Net Position and the Cash Flow Statement. 
C)  Are not required to accrue interest due more than 30 days after the end of the fiscal year. 
D)  Are required to present a Statement of Revenues and Expenses and Balance sheet. 
A)  Are required to present budget-actual statements in the fund statements. 
B)  Are required to present a reconciliation between the Statement of Revenues, Expenses, and Changes in Fund Net Position and the Cash Flow Statement. 
C)  Are not required to accrue interest due more than 30 days after the end of the fiscal year. 
D)  Are required to present a Statement of Revenues and Expenses and Balance sheet.

Question 4

How should customer deposits held for water meters that cannot be spent for operating purposes be classified?

Accepted Answer

A)  As restricted cash in an Enterprise Fund. 
B)  As both cash and a liability in an Agency fund. 
C)  As Nonspendable fund balance in a Permanent Fund. 
D)  Any of the above are acceptable alternatives. 
A)  As restricted cash in an Enterprise Fund. 
B)  As both cash and a liability in an Agency fund. 
C)  As Nonspendable fund balance in a Permanent Fund. 
D)  Any of the above are acceptable alternatives.

Question 5

The Proprietary Fund Statement of Net Position may choose whether to classify assets and liabilities between current and long-term.

Accepted Answer

A) True 
 B)False

Question 6

Proprietary funds use the modified accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 7

The two types of proprietary funds include:

Accepted Answer

A)  Enterprise funds and capital projects funds. 
B)  Enterprise funds and internal service funds. 
C)  Internal service funds and capital project funds. 
D)  Agency funds and enterprise funds. 
A)  Enterprise funds and capital projects funds. 
B)  Enterprise funds and internal service funds. 
C)  Internal service funds and capital project funds. 
D)  Agency funds and enterprise funds.

Question 8

Cash flow statements of proprietary funds must use the direct method for recording cash flows from operations.

Accepted Answer

A) True 
 B)False

Question 9

Municipal solid waste landfills, when accounted for as proprietary funds, record a liability for closure and post-closure care costs; recording expenses on a units of production basis.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not an example of an Enterprise Fund?

Accepted Answer

A)  Electric and Water Utilities. 
B)  Public Libraries. 
C)  Municipal Sports Stadiums. 
D)  All of the above are commonly reported as enterprise funds. 
A)  Electric and Water Utilities. 
B)  Public Libraries. 
C)  Municipal Sports Stadiums. 
D)  All of the above are commonly reported as enterprise funds.

Question 11

Which of the following would not  be true regarding internal service funds?

Accepted Answer

A)  Internal service funds use the economic resources measurement focus and accrual basis of accounting. 
B)  Examples of internal service funds would include self-insurance funds, motor pool funds, and print shop funds. 
C)  In the government-wide financial statements, internal service funds are most commonly reported in the business-type activities column. 
D)  None of the above; all are true. 
A)  Internal service funds use the economic resources measurement focus and accrual basis of accounting. 
B)  Examples of internal service funds would include self-insurance funds, motor pool funds, and print shop funds. 
C)  In the government-wide financial statements, internal service funds are most commonly reported in the business-type activities column. 
D)  None of the above; all are true.

Question 12

Enterprise Funds and Internal Service Funds are part of the larger category of Proprietary Funds.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is false regarding proprietary fund accounting?

Accepted Answer

A)  The economic resources measurement focus and accrual accounting are used. 
B)  Capital assets are recorded in the accounts and depreciated over their useful lives. 
C)  The Statement of Net Position must be in a classified format, with current assets separated from noncurrent assets and current liabilities separated from noncurrent liabilities. 
D)  In the Statement of Net Position, the Net position is reported as either reserved or unreserved. 
A)  The economic resources measurement focus and accrual accounting are used. 
B)  Capital assets are recorded in the accounts and depreciated over their useful lives. 
C)  The Statement of Net Position must be in a classified format, with current assets separated from noncurrent assets and current liabilities separated from noncurrent liabilities. 
D)  In the Statement of Net Position, the Net position is reported as either reserved or unreserved.

Question 14

Proprietary funds use the current financial resources measurement focus and modified accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 15

Which statement is incorrect with respect to proprietary funds?

Accepted Answer

A)  The required financial statements of proprietary funds include a Statement of Net Position, a Statement of Revenues, Expenses, and Changes in Fund Net Position, and a Statement of Cash Flows. 
B)  The net position i.e., fund equity) section of the Statement of Net Position is displayed within three categories: 1) Net Investment in Capital Assets, 2) Restricted, and 3) Unrestricted Net Position. 
C)  The Statement of Cash Flows must be prepared using the direct method and includes cash flows from operating activities, investing activities, capital and related financing activities, and noncapital-related financing activities. 
D)  Proprietary funds follow FASB rules and may follow GASB rules if not addressed by FASAB 
A)  The required financial statements of proprietary funds include a Statement of Net Position, a Statement of Revenues, Expenses, and Changes in Fund Net Position, and a Statement of Cash Flows. 
B)  The net position i.e., fund equity) section of the Statement of Net Position is displayed within three categories: 1) Net Investment in Capital Assets, 2) Restricted, and 3) Unrestricted Net Position. 
C)  The Statement of Cash Flows must be prepared using the direct method and includes cash flows from operating activities, investing activities, capital and related financing activities, and noncapital-related financing activities. 
D)  Proprietary funds follow FASB rules and may follow GASB rules if not addressed by FASAB

Question 16

Which of the following statements is true regarding estimated closure costs for municipal solid waste landfills, assuming that it is operating as an enterprise fund?

Accepted Answer

A)  A portion of those future estimated costs is to be charged as an expense and a liability recorded based on a units-of-production method. 
B)  Modified accrual principles apply and the amount expensed is limited to amounts expected to be paid during the year and within 60 days of year end. 
C)  The estimated closure costs are expensed fully at the time of the estimate. 
D)  None of the above is true. 
A)  A portion of those future estimated costs is to be charged as an expense and a liability recorded based on a units-of-production method. 
B)  Modified accrual principles apply and the amount expensed is limited to amounts expected to be paid during the year and within 60 days of year end. 
C)  The estimated closure costs are expensed fully at the time of the estimate. 
D)  None of the above is true.

Question 17

Centralized purchasing, computer services, and janitorial services are examples of activities that are commonly reported in:

Accepted Answer

A)  Enterprise funds. 
B)  Capital project funds. 
C)  Debt service funds. 
D)  Internal service funds. 
A)  Enterprise funds. 
B)  Capital project funds. 
C)  Debt service funds. 
D)  Internal service funds.

Question 18

Internal Service Funds account for activities that produce goods or services to be provided to outside customers on a cost reimbursement basis.

Accepted Answer

A) True 
 B)False

Question 19

Long term debt serviced from proprietary funds is recorded in the Long Term Debt Account Group.

Accepted Answer

A) True 
 B)False

Question 20

An example of an activity that would not normally be accounted for in an enterprise fund would be:

Accepted Answer

A)  Lottery. 
B)  Swimming pool. 
C)  Printing Services. 
D)  Airport. 
A)  Lottery. 
B)  Swimming pool. 
C)  Printing Services. 
D)  Airport.

Post-closure costs are recorded in a solid waste landfill enterprise fund at the present value of estimated future costs.

Proprietary funds:

How should customer deposits held for water meters that cannot be spent for operating purposes be classified?

The Proprietary Fund Statement of Net Position may choose whether to classify assets and liabilities between current and long-term.

Proprietary funds use the modified accrual basis of accounting.

The two types of proprietary funds include:

Cash flow statements of proprietary funds must use the direct method for recording cash flows from operations.

Municipal solid waste landfills, when accounted for as proprietary funds, record a liability for closure and post-closure care costs; recording expenses on a units of production basis.

Which of the following is not an example of an Enterprise Fund?

Which of the following would not be true regarding internal service funds?

Enterprise Funds and Internal Service Funds are part of the larger category of Proprietary Funds.

Which of the following is false regarding proprietary fund accounting?

Proprietary funds use the current financial resources measurement focus and modified accrual basis of accounting.

Which statement is incorrect with respect to proprietary funds?

Which of the following statements is true regarding estimated closure costs for municipal solid waste landfills, assuming that it is operating as an enterprise fund?

Centralized purchasing, computer services, and janitorial services are examples of activities that are commonly reported in:

Internal Service Funds account for activities that produce goods or services to be provided to outside customers on a cost reimbursement basis.

Long term debt serviced from proprietary funds is recorded in the Long Term Debt Account Group.

An example of an activity that would not normally be accounted for in an enterprise fund would be:

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

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Exam 6: Proprietary Funds

Post-closure costs are recorded in a solid waste landfill enterprise fund at the present value of estimated future costs.

Proprietary funds:

How should customer deposits held for water meters that cannot be spent for operating purposes be classified?

The Proprietary Fund Statement of Net Position may choose whether to classify assets and liabilities between current and long-term.

Proprietary funds use the modified accrual basis of accounting.

The two types of proprietary funds include:

Cash flow statements of proprietary funds must use the direct method for recording cash flows from operations.

Municipal solid waste landfills, when accounted for as proprietary funds, record a liability for closure and post-closure care costs; recording expenses on a units of production basis.

Which of the following is not an example of an Enterprise Fund?

Which of the following would not be true regarding internal service funds?

Enterprise Funds and Internal Service Funds are part of the larger category of Proprietary Funds.

Which of the following is false regarding proprietary fund accounting?

Proprietary funds use the current financial resources measurement focus and modified accrual basis of accounting.

Which statement is incorrect with respect to proprietary funds?

Which of the following statements is true regarding estimated closure costs for municipal solid waste landfills, assuming that it is operating as an enterprise fund?

Centralized purchasing, computer services, and janitorial services are examples of activities that are commonly reported in:

Internal Service Funds account for activities that produce goods or services to be provided to outside customers on a cost reimbursement basis.

Long term debt serviced from proprietary funds is recorded in the Long Term Debt Account Group.

An example of an activity that would not normally be accounted for in an enterprise fund would be:

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