Exam 12: Governmental Entities: Introduction and General Fund Accounting

When an internal service fund (ISF) enters into a capital lease the transaction is recorded in the: I. fixed assets of the ISF. II. long-term debt of the ISF.

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

The general fund of World 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?

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

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.

Which of the following funds are classified as governmental funds?

The following information was obtained from the general fund balance sheet of Lima Village on June 30, 20X9, the close of its fiscal year: On June 30, 20X9, what was Lima's unassigned fund balance in its general fund?

Which of the following funds are classified as proprietary funds?

What is the correct sequence in the expenditure process in governmental accounting?

Due to an error, the general fund of Pueblo did not record an encumbrance for police equipment which had been ordered but not received on June 30, 20X9, the end of its fiscal year. Pueblo's outstanding encumbrances at year-end are nonlapsing. What was the effect of this error on the balance sheet of Pueblo's general fund?

The adjusted trial balance for White River for the fiscal year ended June 30, 20X9, is presented below. Required: a. Prepare a statement of revenues, expenditures, and changed in fund balance for White River for the year ended June 30, 20X9. Assume there were no supplies or outstanding encumbrances at the beginning of the year. b. Prepare a balance sheet for White River at June 30, 20X9.

The general fund of Caldwell had the following operating budget for the fiscal year beginning July 1, 20X9: When the general fund records its operating budget on July 1, 20X9, Budgetary Fund Balance-Unassigned should be

On July 25, 20X8, the city of Pullman, which reports on a calendar-year basis, ordered five police cars at an estimated cost of $200,000. On August 26, 20X8, the police cars were received, and the actual cost amounted to $197,000. Pullman encumbered the appropriation for police cars in its general fund when the cars were ordered. When the police cars were received, the general fund of Pullman should:

Which governmental fund includes resources that are legally restricted so that the governmental entity must maintain the principal and can use only the earnings from the fund's resources to benefit the government's programs for all of its citizens?

The general fund of Battle Creek budgeted a transfer to its capital projects fund for $110,000 to be used in operations during the year ended June 20, 20X9. On September 15, 20X8, the general fund transferred $110,000 to the capital projects fund. What account should be debited in the general fund on September 15 to record this transfer?

Blue Ridge Township uses the consumption method of accounting for its inventory of supplies. On the December 31, 20X7 balance sheet for the general fund, the township reported $10,000 of supplies inventory. During 20X8, expenditures for supplies amounted to $40,000, and, at December 31, 20X8, unused supplies totaled $7,000. In the adjusting entry for supplies at December 31, 20X8,

The general fund of Athens ordered computer equipment on December 1, 20X8, for $32,000. The order was appropriately encumbered on this date. Athens received the computer equipment on January 25, 20X9, and issued a voucher to pay the vendor $32,400. Athens uses the calendar year for reporting, and all outstanding encumbrances lapse at year-end. Athens' governing board honors all outstanding encumbrances by including them in the following year's appropriations. On January 25, 20X9, the general fund of Athens should debit:

Which organization has the authority to establish generally accepted accounting principles for state and local government entities?

Which of the following items is not recognized as revenue by a governmental unit?

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