Exam 6: Proprietary Funds

Which of the following would be found in an Enterprise Fund Financial Statement?

If the accounting treatment for a given transaction is not specified by a GASB pronouncement, a government may use nonauthoritative sources for guidance, including FASB standards dealing with similar events.

GASB requires that the reconciliation of income and cash flows from operations starts with an enterprise fund's operating income.

When preparing the Statement of Cash Flows for the Proprietary Funds, cash flows from noncapital financing activities include all of the following EXCEPT:

Which of the following would generally be included in the Statement of Net Position of an Enterprise Fund? $\quad\quad\quad\text { Reserve for\quad\quad\quad\quad\quad Revenue Bonds }$ $\quad\quad\quad\quad\underline{\text{Encumbrances}}\quad\quad\quad\quad\quad\underline{\text{Payable}}$ A) $\quad \quad \quad \quad \quad \text { No }\quad \quad \quad \quad \quad \quad \quad \quad \text { No }$ B) $\quad \quad \quad \quad \quad\text { Yes } \quad \quad \quad \quad \quad\quad \quad \quad \text { Yes }$ C) $\quad \quad \quad \quad \quad\text { Yes } \quad \quad \quad \quad \quad\quad \quad \quad \text { No }$ d) $\quad \quad \quad \quad \quad\text { No } \quad \quad \quad \quad \quad\quad \quad \quad \text { Yes }$

Capital assets of internal service funds should be reported:

The four categories on the Statement of Cash Flows for a proprietary fund are operating, non-capital financing activities, capital and related financing activities, and investing activities.

Which of the following funds use accrual accounting?

An enterprise fund should be used when a legal requirement exists that the cost of providing services are to be recovered through fees or charges.

Which of the following is true of the Statement of Net Position for proprietary funds?

The Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balances are required for Proprietary funds.

The Water Utility an enterprise fund has just sent out a purchase order to a vendor for some new equipment. Which of the following would be included in the journal entry to record this event?

An internal service fund provided services to a General Fund department. At the time of billing, the debit entry in the General Fund would be:

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

The most numerous and important enterprise services rendered by local governments are public utilities.

Activities that produce goods or services to be provided to other departments or other governmental units on a cost-reimbursement basis are accounted for by enterprise funds.

Indicate which of the following would not be an example of an internal service fund:

FASB requires that the reconciliation of income and cash flows from operations starts with operating income.

The City of Thomasville had the following debt outstanding: General obligation bonds to be paid from a debt service fund $2,900,000 General obligation bonds to be paid from utility revenues $3,100,000 Revenue bonds to be paid from utility revenues $3,400,000 The amount that should be shown as debt in the utility enterprise) fund would be:

All of the following are true about proprietary funds EXCEPT: