Question 1

In the proprietary fund statements, a government should include a separate column for

Accepted Answer

A)  Each major Enterprise Fund only. 
B)  Each major Enterprise Fund, nonmajor Enterprise Funds in the aggregate, and Enterprise Funds total only. 
C)  Each major Enterprise Fund, nonmajor Enterprise Funds in the aggregate, Enterprise Funds total, and Internal Service Funds in the aggregate. 
D)  Each major Enterprise Fund, nonmajor Enterprise Funds in the aggregate, Enterprise Funds total, Internal Service Funds in the aggregate, and Proprietary Funds total.

Question 2

The fund financial statements included in the basic financial statements include separate balance sheets (or statements of net position) for all of the following except

Accepted Answer

A)  Fiduciary funds. 
B)  Governmental funds. 
C)  Proprietary funds. 
D)  Discretely presented component units.

Question 3

A city determines in the current year that it has three major governmental funds, including the General Fund, and two major enterprise funds. The city will

Accepted Answer

A)  Always have three major governmental funds and two major enterprise funds. 
B)  Evaluate each year which funds are major and which funds are considered to be nonmajor except the General Fund which is always considered a major fund. 
C)  Only be required to show a separate column for the General Fund. 
D)  Be able to report all of the major funds in one column on the respective fund financial statements.

Question 4

For governmental activities, the minimum level of functional detail required for direct expenses on the Statement of Activities is the same level of detail required in the

Accepted Answer

A)  Proprietary funds Statement of Revenues, Expenses, and Changes in Fund Net Position. 
B)  Business-type activities column. 
C)  Fiduciary funds Statement of Changes in Fiduciary Net Position. 
D)  Governmental funds Statement of Revenues, Expenditures, and Changes in Fund Balance.

Question 5

A government that uses the modified approach to account for qualifying assets should report all infrastructure asset related costs for the year as

Accepted Answer

A)  Expenses. 
B)  Assets. 
C)  Expenses, unless they were additions or qualitative improvements. 
D)  Assets unless incurred in disposing of an infrastructure asset.

Question 6

The following information was drawn from the records of Wise County (all amounts are in thousands of dollars).
$\begin{array}{llr}
  \text {Local gas tax restricted for street maintenance.  } &\$13,000\
 \text {State grant restricted for police training  } &4,000\
 \text {Federal grant for new library  } &1,222\
 \text { Gain on sale of general capital assets } &300\
 \text { License and permit fees } &70\
 \text { Interest collected on investments } &108\
  \text { Fines and forfeitures } &500\
 \text { Contributions to permanent fund which supports education } &635\
 \text {  Shared state revenues restricted to public health.} &1,100\
\end{array}$
 
$\underline{\text{ Requirement: }}$  Prepare schedules computing amounts to be reported as Charges for Services, Operating Grants and Contributions, Capital Grants and Contributions, and General Revenues.

Accepted Answer

The answer of  
The following information was drawn from...

Question 7

Which of the following statements is true regarding the statement of cash flows for a governmental unit?

Accepted Answer

A)  The statement of cash flows is included in the government-wide and proprietary fund financial statements. 
B)  The statement of cash flows is included in the proprietary fund financial statements only. 
C)  The statement of cash flows is included in the proprietary and fiduciary fund financial statements. 
D)  The statement of cash flows is included in the proprietary fund financial statements only, and the government can choose the presentation format-direct or indirect.

Question 8

Equity in a fiduciary fund is, by nature, considered to be

Accepted Answer

A)  Committed. 
B)  Assigned. 
C)  Designated. 
D)  Restricted.

Question 9

A city has, in addition to the General Fund, three other governmental funds. Two of those three governmental funds have been deemed to be major funds. At most, how many funds may be reported as major funds?

Accepted Answer

A)  One (1). 
B)  Two (2). 
C)  Three (3). 
D)  Four (4).

Question 10

When preparing external financial statements that are in accordance with generally accepted accounting principles, the minimum financial report will include

Accepted Answer

A)  Basic financial statements, management's discussion and analysis, and other required supplementary information. 
B)  A comprehensive annual financial report. 
C)  Basic financial statements only. 
D)  Only the financial section of a comprehensive annual financial report.

Question 11

The minimum requirements for general purpose external financial reporting does not include

Accepted Answer

A)  Fund financial statements. 
B)  A transmittal letter. 
C)  Management's discussion and analysis. 
D)  Required supplementary information.

Question 12

Sales taxes levied by a county government are shared with the local municipal government. The municipal government chooses to use the intergovernmental revenues for drug enforcement activities. In the government-wide statement of activities, the municipal government would report the sales taxes as

Accepted Answer

A)  Unrestricted grants and contributions general revenue. 
B)  Operating grants and contributions program revenue. 
C)  Capital grants and contributions program revenue. 
D)  A transfer in general revenue.

Question 13

The General Fund levies taxes of $3,750,000 during the fiscal year, 1% of which is deemed to be uncollectible. $3,650,000 was collected or met the availability criteria. How much revenue should be recorded in the government-wide financial statements?

Accepted Answer

A)  $3,613,500. 
B)  $3,650,000. 
C)  $3,712,500. 
D)  $3,750,000.

Question 14

In the statement of activities, depreciation is reported on

Accepted Answer

A)  All depreciable capital assets of the government except infrastructure assets that use the modified approach. 
B)  All depreciable capital assets of the government. 
C)  Only depreciable capital assets of business-type activities of the government. 
D)  Only depreciable capital assets of governmental activities of the government.

Question 15

Depreciation was calculated for the police department's vehicle fleet. The expense will be reported

Accepted Answer

A)  As depreciation expenditure in the General Fund. 
B)  As depreciation expense in the General Fund. 
C)  As depreciation expense in the public safety function of governmental activities. 
D)  As unallocated depreciation expense for governmental activities.

Question 16

The government-wide statements include

Accepted Answer

A)  Statement of Activities. 
B)  Statement of Cash Flows. 
C)  Statement of Assets and Liabilities 
D)  Budget-to-actual statement

Question 17

Which of the following types of revenue would always be reported as a general revenue in the government-wide financial statements?

Accepted Answer

A)  Interest earned on a capital grant. 
B)  Charges for services. 
C)  Operating grant. 
D)  Property taxes.

Question 18

A budgetary comparison schedule is required for

Accepted Answer

A)  The General Fund and all major governmental funds with legally adopted annual budgets. 
B)  The General Fund and all major Special Revenue Funds with legally adopted annual budgets. 
C)  The General Fund only. 
D)  All governmental funds.

Exam 13: Financial Reportingthe Basic Financial Statements and Required Supplementary Information