Question 1

Under the modified accrual basis of accounting, the amount of property tax revenues that should be recognized by a governmental entity in the current year related to the current year levy will be

Accepted Answer

A) the total amount of the levy. 
B) the expected collectible portion of the levy. 
C) the portion of the levy collected. 
D) the portion of the levy collected in the current year or within sixty days of the fiscal period.

Question 2

Revenues that cannot be classified as general revenues are by default considered program revenues.

Accepted Answer

A) True 
 B)False

Question 3

A city receives a $200,000 grant from the state to purchase vans to transport physically challenged individuals.During the current year the city receives the entire $200,000 and purchases one bus for $85,000 and issues a purchase order for another van for $80,000.The grant revenue that the city should recognize on the government-wide financial statements in the current year is

Accepted Answer

A) $-0-. 
B) $ 85,000. 
C) $165,000. 
D) $200,000.

Question 4

In accounting for property taxes, under the modified accrual basis, existing standards provide that, except in unusual circumstances, revenues should be recognized only if cash is expected to be collected within sixty days of year-end.

Accepted Answer

A) True 
 B)False

Question 5

A City levies a 2% sales tax.Sales tax must be remitted by the merchants to the City by the 20th day of the month following the month in which the sale occurred.Cash received by the City related to sales tax is as follows: Amount received 1/20/00, applicable to December 1998 sales $ 50
Amount received 2/20/00, applicable to January 2000 sales $ 15
Amount received during 2000 related to February-November 2000 sales $200
Amount received 1/20/01 for December 2000 sales $ 55
Amount received 2/20/01 for January 2001 $ 20
Assuming the City uses the same period to define "available" as the maximum period allowable for property taxes, what amount should it recognize in the government-wide financial statement as sales tax revenue for the fiscal year ended 12/31/00.

Accepted Answer

A) $215. 
B) $265. 
C) $270. 
D) $275.

Question 6

Under the modified accrual basis of accounting, fines, license fees, permits, and other miscellaneous revenue are generally recognized

Accepted Answer

A) when cash is received. 
B) when assessed. 
C) when an enforceable legal claim exists. 
D) when an enforceable legal claim exists and the revenue is available.

Question 7

Under the accrual basis of accounting, gains and losses on disposal of fixed assets

Accepted Answer

A) are not recognized. 
B) are recognized when the proceeds (cash)of the sale are received (on the installment basis). 
C) are recognized only if there is a gain. 
D) are recognized when the sale occurs, regardless of when the cash is collected.

Question 8

As used in governmental accounting, interperiod equity refers to a concept of

Accepted Answer

A) providing the same level of services to citizens each year. 
B) measuring whether current year revenues are sufficient to pay for current year services. 
C) levying property taxes at the same rate each year. 
D) requiring that general fund budgets be balanced each year.

Question 9

Under GAAP, property taxes levied in one fiscal period to finance the activities of the following fiscal period are recognized as revenue in the fund financial statements

Accepted Answer

A) in the year levied. 
B) in the year for which they are intended to finance the activities. 
C) when collected, regardless of when levied. 
D) in the year for which they are intended to finance the activities, if collected within that period or within a period no greater than 60 days after the close of the fiscal year.

Question 10

Under GAAP, income tax revenues should be recognized in the fund financial statements in the accounting period

Accepted Answer

A) when collected in cash by the taxing authority. 
B) in which the underlying income was earned, regardless of when collected. 
C) in which the underlying income was earned, if collected in time to satisfy the budgetary obligations of the preceding year. 
D) when earned.

Question 11

Under the modified accrual basis of accounting, gains and losses on disposal of fixed assets

Accepted Answer

A) are not recognized. 
B) are recognized when the proceeds (cash)of the sale are received (on the installment basis). 
C) are recognized only if there is a gain. 
D) are recognized when the sale occurs, regardless of when the cash is collected.

Question 12

Under the modified accrual basis of accounting used by a governmental entity, investment revenues for the current period should include

Accepted Answer

A) only interest and dividends received. 
B) all interest and dividends received during the period plus all accruals of interest and dividends earned. 
C) all interest and dividends received plus gains and losses on securities that were sold during the period. 
D) all interest and dividends received, all gains and losses on securities sold and all changes in market values on securities held in the portfolio at year-end.

Question 13

Payments made to a state pension plan by the state government on behalf of a local government should

Accepted Answer

A) not be displayed or disclosed in the local government financial statements. 
B) be displayed as a revenue in the local government financial statements. 
C) be displayed as both a revenue and an expenditure in the local government financial statements. 
D) should be disclosed, but not displayed, in the local government financial statements.

Question 14

Taxes that are imposed on the reporting government's citizens are considered general revenues, even if they are restricted to specific programs.

Accepted Answer

A) True 
 B)False

Question 15

The modified accrual basis of accounting is used in presenting the fund financial statements of the governmental funds because

Accepted Answer

A) it is the superior method of accounting for the economic resources of any entity. 
B) it provides information as to the extent the entity achieved interperiod equity. 
C) it is budget oriented while facilitating comparisons among entities. 
D) it results in accounting measurements based on the substance of transactions.

Question 16

Unrestricted grant revenues with a time requirement should be recognized in the accounting period in which

Accepted Answer

A) the award is announced. 
B) the cash is received. 
C) the grant may be used. 
D) expenditures are recorded on grant-related activities.

Question 17

The budgetary measurement focus of governments is determined by applicable state or local laws.

Accepted Answer

A) True 
 B)False

Question 18

A City levies a 2% sales tax that is collected for them by the State.Sales tax must be remitted by the merchants to the State by the 20th day of the month following the month in which the sale occurred.The State has a policy of remitting sales taxes to the City within 30 days of collection by the State.Cash received by the State related to sales tax is as follows: Amount received 1/20/00, applicable to December 1999 sales $ 50
Amount received 2/20/00, applicable to January 2000 sales $ 15
Amount received 3/20/00, applicable to February 2000 sales $ 10
Amount received during 2000 related to March-November 2000 sales $190
Amount received 1/20/01 for December 2000 sales $ 55
Amount received 2/20/01 for January 2001 $ 20
Amount received 3/20/01 for February 2001 $ 5
Assuming the City uses the same period to define "available" as the maximum period allowable for property taxes, what amount should it recognize as sales tax revenue in its government-wide financial statements for the fiscal year ended 12/31/00.

Accepted Answer

A) $215. 
B) $265. 
C) $270. 
D) $275.

Question 19

All intergovernmental grants are accounted for in exactly the same way.

Accepted Answer

A) True 
 B)False

Question 20

Under GAAP, property taxes levied in one fiscal period to finance the activities of the following fiscal period are recognized as revenue in the government-wide financial statements

Accepted Answer

A) in the year levied. 
B) in the year for which they are intended to finance the activities. 
C) when collected, regardless of when levied. 
D) in the year for which they are intended to finance the activities, if collected within that period or within a period no greater than 60 days after the close of the fiscal year.

Exam 4: Governmental Activities - Recognizing Revenues

Under the modified accrual basis of accounting, the amount of property tax revenues that should be recognized by a governmental entity in the current year related to the current year levy will be

Revenues that cannot be classified as general revenues are by default considered program revenues.

In accounting for property taxes, under the modified accrual basis, existing standards provide that, except in unusual circumstances, revenues should be recognized only if cash is expected to be collected within sixty days of year-end.

Under the modified accrual basis of accounting, fines, license fees, permits, and other miscellaneous revenue are generally recognized

Under the accrual basis of accounting, gains and losses on disposal of fixed assets

As used in governmental accounting, interperiod equity refers to a concept of

Under GAAP, property taxes levied in one fiscal period to finance the activities of the following fiscal period are recognized as revenue in the fund financial statements

Under GAAP, income tax revenues should be recognized in the fund financial statements in the accounting period

Under the modified accrual basis of accounting, gains and losses on disposal of fixed assets

Under the modified accrual basis of accounting used by a governmental entity, investment revenues for the current period should include

Payments made to a state pension plan by the state government on behalf of a local government should

Taxes that are imposed on the reporting government's citizens are considered general revenues, even if they are restricted to specific programs.

The modified accrual basis of accounting is used in presenting the fund financial statements of the governmental funds because

Unrestricted grant revenues with a time requirement should be recognized in the accounting period in which

The budgetary measurement focus of governments is determined by applicable state or local laws.

All intergovernmental grants are accounted for in exactly the same way.

Under GAAP, property taxes levied in one fiscal period to finance the activities of the following fiscal period are recognized as revenue in the government-wide financial statements