Deck 9: Advanced Topics for State and Local Governments

Question 1

Special purpose governments may be stand alone local governments or may be component units of other governments that are issuing separate reports.

Answer 1

True

Question 2

City government and library districts are examples of general -purpose state or local governments.

Answer 2

False

Question 3

General state appropriations are treated as nonoperating revenue of public colleges and universities.

Answer 3

True

Question 4

Special-purpose governmental entities that are engaged in a single business activity are not required to prepare government-wide financial statements,but may issue only enterprise fund statements.

Question 5

Public higher education institutions are allowed to report as special-purpose entities engaged in governmental and business-type activities or in governmental-type activities only.

Question 6

General-purpose governments are those that offer more than one type of basic governmental service,while special-purpose entities generally provide a limited,or single,set of programs or services.

Question 7

Public higher education institutions that report as special-purpose entities engaged in business-type activities only are still required to prepare a Management's Discussion and Analysis.

Question 8

Sometimes,but not always public colleges are included as component units in the state CAFR.

Question 9

According to GASB Statement No.34,"General-purpose governments are thought to be those that offer more than one type of basic governmental service".

Question 10

Park districts and village government are examples of special-purpose local governments.

Question 11

For financial reporting purposes,governmental health care entities,public school systems,other not-for-profit entities and public colleges and universities may be considered to be special-purpose entities.

Question 12

GASB Statement 35 extends the provisions of GASB Statement 34 to both public and private colleges and universities.

Question 13

Public colleges typically report as special-purpose entities engaged only in governmental-type activities.

Question 14

Revenue sources for public colleges include tuition and fees,state appropriations and donations.All other income is reported as unrelated business income.

Question 15

Special-purpose governments that are engaged in only one governmental-type activity are permitted to combine the fund and government-wide financial statements.

Question 16

GASB requirements for business-type activities of public colleges requires accrual of interest and amortization of debt discount and premium.

Question 17

Special-purpose governments generally provide a limited set of services or programs.

Question 18

Public colleges do not have the power to issue debt; it must be issued by the state as general obligation debt.

Question 19

Special-purpose governmental entities that are engaged in a single governmental-type activity only are required to prepare only the statements required for governmental fund basis financial statements.

Question 20

Financial reporting for a special-purpose local government depends on whether that government is engaged in governmental-type,business-type or fiduciary-type activities.

Question 21

Special-purpose governments that are engaged in both governmental and business-type activities are permitted to combine the fund and government-wide financial statements.

Question 22

Public colleges and universities are required to report as special purpose entities engaged in both governmental- and business-type activities because they receive tax dollars and charge user fees.

Question 23

Revenue for reimbursement grants may be recognized before expenditures take place as long as the grant has been awarded.

Question 24

Governmental health care entities,public school systems,and museums are accounted for as special-purpose governments.

Question 25

Special-purpose governments that are engaged in more than one governmental activity are permitted to combine the fund and government-wide financial statements.

Question 26

Tuition waived for work-study and graduate assistants is deducted from student fee revenue when preparing a Statement of Revenues,Expenses,and Changes in Net Assets.

Question 27

Public colleges must depreciate infrastructure and may not use the modified approach.

Question 28

Special-purpose governments that are engaged in more than one governmental activity are required to use the full reporting model including MD&A,government-wide and fund-basis statements,notes to the financial statements and RSI.

Question 29

A County could be either a general-purpose or a special purpose government.

Question 30

Higher education institutions that report as special purpose entities engaged in business-type activities only should report the same net asset classifications (invested in capital assets,net of related debt,restricted,unrestricted)as are reported in the government-wide statement of net assets.

Question 31

According to GASB Statement 34,governmental activities are generally financed through taxes,intergovernmental revenues and other nonexchange revenues.

Question 32

GASB standards permit exercise of judgment when determining whether a government is general-purpose or special-purpose.

Question 33

Special-purpose governments generally provide a single or limited set of governmental services or programs.

Question 34

State appropriations for higher education institutions are to be reported as nonoperating revenues in the Statement of Revenues,Expenses,and Changes in Net Assets.

Question 35

Most public colleges and universities choose to report as special purpose entities engaged in only business-type activities.

Question 36

GASB Statement 39:
Determining Whether Certain Organizations Are Component Units requires most public college foundations to be reported as discretely presented component units in the college's financial reports.

Question 37

A special-purpose government engaged in business-type activities financed in whole or part by fees charged to external parties are usually reported in enterprise funds.

Question 38

Special-purpose governments that are engaged in both governmental and business-type activities are required to use the full reporting model including MD&A,government-wide and fund-basis statements,notes to the financial statements and RSI.

Question 39

Public institutions of higher education are required to produce a Statement of Cash flows in addition to a Statement of Net Assets and a Statement of Revenues,Expenses,and Changes in Net Assets.

Question 40

The implementation guide for GASB Statement 34 provides a distinction by indicating that "general purpose governments are thought to be those that offer more than one type of basic governmental service."

Question 41

Public colleges who waive fees for graduate assistants must report tuition income net of the fees waived.

Question 42

According to GASB Statement 33,with respect to public colleges and universities,pledges receivable are recognized as assets and revenues when the pledge is made.

Question 43

With respect to public colleges engaged in business-type activities,which of the following is not correct?

A) GASB requirements for business-type activities of public colleges requires accrual account for debt, include accrual of interest and amortization of debt discount and premium.
B) Most public college foundations are required to be reported as discretely presented component units in the college's financial report.
C) Only amounts that are to paid by students and third-party payers can be shown as tuition and fee revenue net of any scholarship discounts and allowances.
D) All of the above are correct

Question 44

Which of the following is a special-purpose government?

A) Park district
B) Village government
C) Township government
D) City government

Question 45

GASB categorizes general state appropriation as nonoperating revenue for public colleges and universities.

Question 46

Which of the following is true regarding accounting and financial reporting for special-purpose entities?

A) Special-purpose entities that are engaged only in one governmental activity may combine government-wide and governmental fund statements.
B) Special-purpose entities that are engaged in fiduciary activities only may prepare the statements required for fiduciary funds only (Statement of Fiduciary Net Assets, Statement of Changes in Fiduciary Net Assets) plus any RSI schedules required.
C) Both of the above.
D) Neither of the above.

Question 47

Public colleges and universities account for revenue bonds using the expenditure method.

Question 48

Which of the following is not a special-purpose government?

A) Tollway authority
B) Library district
C) Village government
D) Fire protection districts

Question 49

Which of the following is not required for a special-purpose local government engaged in only fiduciary type activities?

A) Statement of Fiduciary Net Assets
B) Statement of Revenues, Expenses, and Changes in Fiduciary Net Assets
C) Notes to the Financial Statements
D) Required Supplementary Information other than MD&A

Question 50

Public colleges and universities account for revenue bonds using the accrual method to account for interest and amortization of premiums and discounts.

Question 51

Which of the following is true with respect to public four-year higher education institutions (public colleges)?

A) Sometimes, but not always public colleges are included as component units in the state CAFR.
B) Revenue sources for public colleges include tuition and fees, state appropriations and donations. All other income is reported as unrelated business income.
C) Public colleges do not have the power to issue debt; it must be issued by the state as general obligation debt.
D) Public colleges may not choose to report as special-purpose entities engaged only in business-type activities.

Question 52

Public colleges must report tuition income net of athletic scholarships.

Question 53

Special-purpose governments that are engaged in both governmental and business-type activities or in more than one governmental activity are required to include all of the following in its financial statements except?

A) Required supplementary Information
B) Fund basis financial statements
C) Government-wide financial statements
D) Two year budgetary comparison

Question 54

Public colleges who waive fees for graduate assistants must report tuition at the gross amount and expense the fees waived.

Question 55

Public colleges and universities are allowed to choose,to report as special purpose entities engaged in:

A) business-type activities only.
B) both governmental and business-type activities.
C) governmental activities only.
D) any one of the above.

Question 56

Reimbursement grants require that the appropriate expenditure be made before the revenue can be recognized.

Question 57

Which of the following is not correct with respect to special purpose governments that are engaged in only one governmental-type activity?

A) Special purpose governments that are engaged in only one governmental-type activity may combine fund and government-wide financial statements if it shows the reconciliation between the two on the face of the statements.
B) Special purpose governments that are engaged in only one governmental-type activity must include required supplementary information as part of its reporting requirement.
C) Special purpose governments that are engaged in only one governmental-type activity are required to include notes to the financial statements for the government-wide statements only.
D) Special purpose governments that are engaged in only one governmental-type activity must present required supplementary information as part of its reporting requirement.

Question 58

Which of the following would not be considered a special-purpose government for financial reporting purposes?

A) A public school system.
B) An art museum.
C) A public hospital.
D) A county board of supervisors.

Question 59

GASB categorizes general state appropriation as operating revenue for public colleges and universities.

Question 60

According to GASB Statement 33,with respect to public colleges and universities,pledges receivable are recognized as assets and revenues when eligibility requirements are met.

Question 61

Assume a government is determined to be a special-purpose government engaged in business-type activities only.Which of the following financial statements would be required?

A) Statement of Net Assets and Statement of Activities.
B) Statement of Net Assets, Statement of Revenues, Expenses, and Changes in Net Assets, Statement of Cash Flows.
C) Statement of Net Assets, Statement of Activities, Statement of Cash Flows.
D) Balance Sheet, Statement of Revenues, Expenditures, and Changes in und Balances.

Question 62

Which of the following is true regarding financial reporting of special-purpose entities?

A) Special purpose entities might include park districts, school districts, and public colleges and universities.
B) Special-purpose entities, in some cases, have more limited reporting requirements than general-purpose entities.
C) Both of the above are true.
D) Neither of the above is true.

Question 63

Which of the following is true regarding the Statement of Revenues,Expenses,and Changes in Net Assets for a public college?

A) Tuition revenues are reported net of tuition waivers only when those waivers do not require service on the part of the recipient student.
B) Depreciation expense is not recognized.
C) Both of the above are true.
D) Neither of the above is true.

Question 64

Which of the following is true regarding the Statement of Cash Flows for a public college?

A) A reconciliation is required, reconciling operating income in the Statement of Revenues, Expenses, and Changes in Net Assets to the cash flows provided (used) by operating activities.
B) All purchases of capital assets are reported as outflows in the investing activities section.
C) Both of the above are true.
D) Neither of the above is true.

Question 65

Assume a government is a special-purpose government engaged in only one governmental activity.Which financial statements would be required?

A) Government-wide statements only.
B) Governmental fund statements only.
C) Statements combining the governmental funds and government-wide statements.
D) Either government-wide or governmental funds statements, issued separately.

Question 66

A public college had tuition and fees for the year ended June 30,2012 in the amount of $45,000,000.Scholarships,for which no services were required,amounted to $2,300,000.Graduate assistantships,for which services were required,amounted to $2,500,000.The amount to be reported by the college for net tuition and fee revenue would be:

A) $40,200,000.
B) $42,700,000.
C) $42,500,000.
D) $45,000,000.

Question 67

Which of the following is true regarding the Statement of Cash Flows for a public college?

A) Cash received for interest is reported as an increase in cash flows from investing activities.
B) Cash paid for interest is reported as a decrease in cash flows from either noncapital or capital and related financing activities.
C) Both of the above are true.
D) Neither of the above is true

Question 68

Which of the following is true regarding the Statement of Revenues,Expenses and Changes in Net Assets for a public college reporting as a special purpose entity engaged in business type activities only?

A) Full accrual accounting is used to measure revenues and expenses.
B) Grants are treated as operating revenue and contributions as non-operating revenue.
C) Both of the above are true.
D) Neither of the above is true.

Question 69

Which of the following groups would probably not be considered a component unit of a special-purpose government,for the purposes of applying GASB Statement 39: Determining Whether Certain Organizations Are Component Units?

A) A university foundation.
B) A hospital auxiliary.
C) A museum foundation.
D) A high school band booster club.

Question 70

Which of the following is true regarding the Statement of Revenues,Expenses,and Changes in Net Assets for a public college?

A) All student scholarship allowances should be reported as operating expenses.
B) An all-inclusive statement should be prepared, ending with the net assets at year-end.
C) Both of the above are true.
D) Neither of the above is true.

Question 71

Assume a government is a special-purpose entity engaged in fiduciary activities only.Which of the following financial statements would be required?

A) Statement of Fiduciary Net Assets and Statement of Changes in Fiduciary Net Assets.
B) Statement of Net Assets and Statement of Activities.
C) Statement of Net Assets, Statement of Activities, Statement of Fiduciary Net Assets, Statement of Changes in Fiduciary Net Assets.
D) Statement of Fiduciary Net Assets, Statement of Changes in Fiduciary Net Assets, and Statement of Cash Flows.

Question 72

A public college had tuition and fees of $21,000,000.Scholarships,for which no services were required,amounted to $2,500,000.Graduate assistantships,for which services were required,amounted to $1,600,000.The amount to be reported by the public college as net tuition and fees would be:

A) $18,500,000.
B) $16,900,000.
C) $21,000,000.
D) $20,000,000.

Question 73

Which of the following is true regarding the Statement of Revenues,Expenses,and Changes in Net Assets for a public (government-owned)college?

A) The modified accrual basis of accounting is used to determine the net increase or decrease in net assets.
B) Auxiliary enterprise activities represent revenues and expenses related to units of the college that provide services to students on a user fee basis.
C) Both of the above are true.
D) Neither of the above is true.

Question 74

Which of the following would be true regarding the Statement of Net Assets for a public college reporting as a special purpose entity engaged in business type activities only?

A) A classified statement is required, separating current and long-term assets and liabilities.
B) The two net asset categories are restricted and unrestricted.
C) Both of the above are true.
D) Neither of the above is true.

Question 75

Which of the following is true regarding financial reporting of special-purpose entities?

A) Special-purpose entities might be included as component units in a primary government's financial statements.
B) Special-purpose entities that engage in more than one governmental activity may prepare statements that combine government-wide and governmental fund statements.
C) Both of the above are true.
D) Neither of the above is true.

Question 76

Public colleges and universities that choose to report as special-purpose entities engaged only in business-type activities would have which of the following financial statements?

A) Statement of Net Assets, Statement of Activities.
B) Statement of Net Assets, Statement of Revenues, Expenses, and Changes in Net Assets.
C) Statement of Net Assets, Statement of Revenues, Expenses, and Changes in Net Assets, Statement of Cash Flows.
D) None of the above.

Question 77

Which of the following is true regarding the Statement of Cash Flows for a public college?

A) The direct method must be used.
B) The statement is in the same format required for state and local governmental enterprise funds.
C) Both of the above are true.
D) Neither of the above is true.

Question 78

Which of the following statements is true regarding accounting and financial reporting for public colleges and universities?

A) Public colleges and universities may choose to report in the same manner as private colleges and universities, using FASB standards.
B) Public colleges and universities may choose to report as special-purpose entities engaged in both governmental and business-type activities.
C) Both of the above.
D) None of the above.

Question 79

Public colleges and universities may choose to report as:

A) special-purpose entities engaged in governmental and business-type entities.
B) special-purpose entities engaged in business-type activities only.
C) either (a) or (b) depending on the nature of their operations.
D) neither (a) nor (b).

Question 80

Special purpose local governments engaged only in fiduciary-type activities are required to prepare all of the following except:

A) Statement of Fiduciary Net Assets
B) Statement of Cash Flows
C) Statement of Changes in Fiduciary Net Assets
D) MD&A