Question 1

A transaction in which a government gives or receives value without directly receiving or giving equal value in exchange is known as a(n):

Accepted Answer

A)  Non-exchange Transaction. 
B)  Fair Exchange. 
C)  Equity Transaction. 
D)  Not Fair Market Exchange transaction.

Question 2

Budgets are not legally binding upon administrators

Accepted Answer

A) True 
 B)False

Question 3

The General Fund of the City of X passed a budget,providing for $2,000,000 in anticipated revenues and $1,990,000 in anticipated expenditures.The journal entry(s)to record the budget would result in a:

Accepted Answer

A)  credit to Appropriations Control in the amount of $1,990,000. 
B)  debit to Estimated Revenues Control in the amount of $2,000,000. 
C)  credit to Budgetary Fund Balance in the amount of $10,000. 
D)  all of the above.

Question 4

Fines and Forfeits are typically recognized:

Accepted Answer

A)  When cash is deposited. 
B)  When cash is received. 
C)  When the transaction is finalized. 
D)  None of the above.

Question 5

When a computer which is to be used by an activity accounted for by the General Fund of a governmental unit is received,it should be recorded in the General Fund as a(an):

Accepted Answer

A)  Expenditure. 
B)  Appropriation. 
C)  Encumbrance. 
D)  Capital asset.

Question 6

Revenues for governmental funds should be recognized when measurable and available for expenditure in the current period.

Accepted Answer

A) True 
 B)False

Question 7

The Fire Department of a given city received an appropriation in the amount of $14,000,000 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 $650,000; (b)purchase orders,related to (a)above,were filled in the amount of $610,000; the related invoice amount was $595,000; invoices were paid in the amount of $550,000; (c)salaries were accrued and paid in the amount of $600,000.The balance available for the fire department as of July 31,2013 is:

Accepted Answer

A)  $12,740,000. 
B)  $12,800,000. 
C)  $12,765,000. 
D)  $12,840,000.

Question 8

According to GASB Statement No.54,spendable fund balances are displayed in which of the following categories?

Accepted Answer

A)  Restricted, Unrestricted, Assigned, Unassigned 
B)  Restricted, Committed, Assigned, Unassigned 
C)  Spendable, Assigned, Unassigned 
D)  Restricted, Unrestricted

Question 9

When a purchase order or contract is issued as authorized by an appropriation,it is known as an expenditure.

Accepted Answer

A) True 
 B)False

Question 10

The City of Fairport adopted the following budget for fiscal year 2014:
  In addition,the City reported the following actual amounts for the same fiscal year.
  Required:
 Prepare a budgetary comparison schedule for the City for the year ended December 31,2014 assuming the fund balance of the General Fund (budgetary basis)was $627,000 at January 1,2014.No "original budget" column is required.Include a "variance" column.

Accepted Answer

The answer of The City of Fairport adopted the following...

Question 11

When purchase orders are filled and the invoice amount differs from the estimated amount,the amount reversed from the encumbrance account equals the invoice amount.

Accepted Answer

A) True 
 B)False

Question 12

Revenues in governmental fund accounting…

Accepted Answer

A)  include taxes, fees, resources provided by other governments, and interfund transfers 
B)  are recognized in the fiscal year they are available for expenditure 
C)  are recognized when earned 
D)  none of the above describes revenues in governmental accounting

Question 13

The Revenues account of a government is credited when:

Accepted Answer

A)  property taxes are recorded. 
B)  property taxes are collected. 
C)  the budget is recorded in the accounts. 
D)  budgetary accounts are closed at the end of the year.

Question 14

Use the following to answer the next two questions:
The City of Park Ridge reported appropriations in the amount of $17,000,000 for its General Fund for the fiscal year ended December 31, 2014. During that year, expenditures amounted to $16,200,000 (related to current year purchase orders) and $900,000 (related to prior year purchase orders). In addition, $700,000 in encumbrances had been issued this year, but not filled. Park Ridge follows the budgetary procedure where encumbrances do not lapse.
-In its 2014 Budgetary Comparison Schedule,the amount Park Ridge reports for expenditures (and encumbrances,if applicable)would be:

Accepted Answer

A)  $17,700,000. 
B)  $17,100,000. 
C)  $16,200,000. 
D)  $16,900,000.

Question 15

An example of expenditure classification by object would be:

Accepted Answer

A)  Current. 
B)  Public safety. 
C)  Police department. 
D)  Salaries.

Question 16

When liabilities authorized by an appropriation have been incurred,the appropriation is said to be…

Accepted Answer

A)  Expensed 
B)  Encumbered 
C)  Expired 
D)  Expended

Question 17

Define and give an example of each of the following categories of Fund Balance outlined in GASB Statement No.54:
Nonspendable
Restricted
Committed
Assigned
Unassigned

Accepted Answer

The answer of Define and give an example of each...

Question 18

A Budgetary Comparison Schedule is:

Accepted Answer

A)  optional under GASB standards for all funds. 
B)  required by GASB for internal management reports only; not permitted for external financial reporting. 
C)  required for all governmental fund types. 
D)  required for the General Fund, and for special revenue funds, for which an annual budget has been adopted.

Question 19

The Township of Thomasville's General Fund has the following net resources at year end:
•$66,000 of prepaid insurance
•$375,000 rainy day fund approved by the township governing board with specific conditions for its use
•$2,500 of supplies inventory
•$61,000 state grant for snow removal
•$150,000 contractual obligations for the purchase of equipment
•$200,000 to be used to fund government operations in the future
•Outstanding encumbrance of $80,000 for the purchase of furniture & fixtures
-What would be the total Assigned fund balance?

Accepted Answer

A)  $105,000 
B)  $455,000 
C)  $ 67,500 
D)  $ 80,000

Question 20

The legal authorization for the administrators of the governmental unit to incur liabilities during the budget period for purposes specified in the appropriations statute or ordinance and not to exceed the amount specified for each purpose is a (an):

Accepted Answer

A)  Appropriation 
B)  Encumbrance 
C)  Other financing source/use 
D)  Expenditure

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

A transaction in which a government gives or receives value without directly receiving or giving equal value in exchange is known as a(n) :

Budgets are not legally binding upon administrators

The General Fund of the City of X passed a budget,providing for $2,000,000 in anticipated revenues and $1,990,000 in anticipated expenditures.The journal entry(s) to record the budget would result in a:

Fines and Forfeits are typically recognized:

When a computer which is to be used by an activity accounted for by the General Fund of a governmental unit is received,it should be recorded in the General Fund as a(an) :

Revenues for governmental funds should be recognized when measurable and available for expenditure in the current period.

According to GASB Statement No.54,spendable fund balances are displayed in which of the following categories?

When a purchase order or contract is issued as authorized by an appropriation,it is known as an expenditure.

When purchase orders are filled and the invoice amount differs from the estimated amount,the amount reversed from the encumbrance account equals the invoice amount.

Revenues in governmental fund accounting…

The Revenues account of a government is credited when:

An example of expenditure classification by object would be:

When liabilities authorized by an appropriation have been incurred,the appropriation is said to be…

Define and give an example of each of the following categories of Fund Balance outlined in GASB Statement No.54: Nonspendable Restricted Committed Assigned Unassigned

A Budgetary Comparison Schedule is:

The legal authorization for the administrators of the governmental unit to incur liabilities during the budget period for purposes specified in the appropriations statute or ordinance and not to exceed the amount specified for each purpose is a (an) :