Question 1

The Village of Lake George's General Fund has the following net resources at December 31,2014
• $5,000 of prepaid insurance
• $ 25,000 of property taxes receivable - currently due and expected to be collected within 60 days
• $300,000 rainy day fund approved by the township governing board
• $82,500 of supplies inventory
• $33,000 government grant for city park maintenance
• $10,000 contractual obligations for the purchase of park fixtures
• $200,000 to be used to fund government operations in the future
Required:
 Prepare the fund balance section of the Balance Sheet

Accepted Answer

The answer of The Village of Lake George's General Fund...

Question 2

The GASB has created four "eligibility requirements" that must be met before revenue can be recognized:
 (1)required characteristics of recipients,(2)timing,(3)reimbursements,and (4)contingencies.

Accepted Answer

A) True 
 B)False

Question 3

The Budgetary Fund Balance -- Reserve for Encumbrances account is properly considered to be a(an):

Accepted Answer

A)  current liability. 
B)  expenditure. 
C)  long-term liability. 
D)  None of the above.

Question 4

Distinguish between the Encumbrances Control account and the Budgetary Fund Balance -- Reserve for Encumbrances account

Accepted Answer

The answer of Distinguish between the Encumbrances Control account and...

Question 5

GASB requires a reconciliation between the amount shown as GAAP expenditures in the basic financial statements and the amount shown in the budgetary comparison schedule.

Accepted Answer

A) True 
 B)False

Question 6

The City of Westboro passed an appropriations ordinance for the year ended June 30,2014.Included in the appropriations ordinance was an appropriation for public safety in the amount of $7,600,000.During the month ended July 31,2013 the following transactions took place:
a.Purchase orders were issued in the amount of $410,000.
b.Goods were received,related to purchase orders in the amount of $220,000,along with invoices amounting to $215,000.
c.Salaries were paid in the amount of $450,000
d.Because of an economic slowdown,a budget amendment was passed cutting all departments' (annual)appropriations by 4%.
Required:
Compute the amount of appropriations available at July 31,2013.

Accepted Answer

The answer of The City of Westboro passed an appropriations...

Question 7

To record the budget for the General Fund

Accepted Answer

A)  Estimated Revenue Control is Debited 
B)  Expenditure Control is Debited 
C)  Appropriations Control is Debited 
D)  Revenue Control is Debited

Question 8

All of the following are commonly used major revenue source classes except for

Accepted Answer

A)  Taxes 
B)  Intergovernmental revenues 
C)  Fines and Forfeits 
D)  Transfers from other funds

Question 9

At year-end,the balance of Expenditures,Revenues and Other Financing Sources and Uses accounts are closed to:

Accepted Answer

A)  Budgetary Fund Balance 
B)  Expenses 
C)  Expenditure Control 
D)  Fund Balance

Question 10

The general ledger journal entry in the General Fund to record the adoption of a budget would include:

Accepted Answer

A)  A debit to Estimated Revenues Control 
B)  A credit to Estimated Other Financing Sources Control 
C)  A debit to Budgetary Fund Balance-Reserve for Encumbrances 
D)  A debit to Appropriations Control

Question 11

The Police Department of a given city received an appropriation in the amount of $8,000,000 for the fiscal year ended June 30,2014.During the month ended July 31,2013,the following transactions occurred: (a)purchase orders were issued in the amount of $500,000; (b)purchase orders,related to (a)above,were filled in the amount of $460,000; the related invoice amount was $463,000; invoices were paid in the amount of $450,000; (c)salaries were accrued and paid in the amount of $480,000.The balance available for the police department as of July 31,2013 is:

Accepted Answer

A)  $7,010,000. 
B)  $7,017,000. 
C)  $7,000,000. 
D)  $7,007,000.

Question 12

Which of the following statements is correct with respect to GASB Statement No.54 regarding committed funds?

Accepted Answer

A)  Committed funds are those that are designated as committed through ordinance or resolution by the government's highest level of authority. 
B)  These constraints are easily changed by administrators. 
C)  This is constraint is imposed by law and may not be changed without amendment of the law. 
D)  Committed funds may be redesignated to uncommitted in the event of a budget shortfall.

Question 13

According to GASB Statement No.54 which of the following statements is not true regarding assigned funds?

Accepted Answer

A)  Assigned fund balances represent governmental resources that the government intends to use for a specific purpose such as a debt service fund. 
B)  Constraints on assigned resources are more easily changed than committed funds. 
C)  For governmental funds other than the General Fund, this is the category for all positive residual fund balances. 
D)  This is the only fund balance that can be negative

Question 14

The category "other financing sources" includes transfers from other funds and bond issue proceeds.

Accepted Answer

A) True 
 B)False

Question 15

Rainy day funds are classified as committed if they are created by a resolution or ordinance that identifies the specific circumstances under which the resources may be expended.

Accepted Answer

A) True 
 B)False

Question 16

$200,000 to be used to fund government operations in the future from the General Fund is an example of an unassigned fund balance.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is not true with respect to GASB Statement No.54 regarding restricted fund balances?

Accepted Answer

A)  Restricted funds are those that are subject to constraints imposed by external parties or by law. 
B)  Restricted fund balance can result from legally enforceable requirements that resources be used only for specific purpose. 
C)  Restricted funds are the result of a self-imposed constraint by a government upon itself. 
D)  All of the above are correct

Question 18

Examples of budgetary accounts include Estimated Revenues,Appropriations,and Estimated Other Financing Uses.

Accepted Answer

A) True 
 B)False

Question 19

Encumbrance is the legal authorization for administrators of governmental unit to incur liabilities for purposes specified and to not exceed the amount specified.

Accepted Answer

A) True 
 B)False

Question 20

Expenditures under modified accrual accounting are recognized when current fund liabilities are incurred.

Accepted Answer

A) True 
 B)False

Exam 3: Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

The GASB has created four "eligibility requirements" that must be met before revenue can be recognized: (1)required characteristics of recipients,(2)timing,(3)reimbursements,and (4)contingencies.

The Budgetary Fund Balance -- Reserve for Encumbrances account is properly considered to be a(an) :

Distinguish between the Encumbrances Control account and the Budgetary Fund Balance -- Reserve for Encumbrances account

GASB requires a reconciliation between the amount shown as GAAP expenditures in the basic financial statements and the amount shown in the budgetary comparison schedule.

To record the budget for the General Fund

All of the following are commonly used major revenue source classes except for

At year-end,the balance of Expenditures,Revenues and Other Financing Sources and Uses accounts are closed to:

The general ledger journal entry in the General Fund to record the adoption of a budget would include:

Which of the following statements is correct with respect to GASB Statement No.54 regarding committed funds?

According to GASB Statement No.54 which of the following statements is not true regarding assigned funds?

The category "other financing sources" includes transfers from other funds and bond issue proceeds.

Rainy day funds are classified as committed if they are created by a resolution or ordinance that identifies the specific circumstances under which the resources may be expended.

$200,000 to be used to fund government operations in the future from the General Fund is an example of an unassigned fund balance.

Which of the following statements is not true with respect to GASB Statement No.54 regarding restricted fund balances?

Examples of budgetary accounts include Estimated Revenues,Appropriations,and Estimated Other Financing Uses.

Encumbrance is the legal authorization for administrators of governmental unit to incur liabilities for purposes specified and to not exceed the amount specified.

Expenditures under modified accrual accounting are recognized when current fund liabilities are incurred.