Question 1

Net resources of a governmental fund represented by prepaid insurance is an example of a nonspendable fund balance

Accepted Answer

A) True 
 B)False

Question 2

Modified accrual accounting is essentially the same as cash basis except that long term assets are not recorded.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following results in an encumbrance?

Accepted Answer

A)  Place a purchase order. 
B)  Receive goods previously ordered. 
C)  Receive an invoice on goods previously received. 
D)  Payment of an invoice previously received.

Question 4

What is the first step a government takes in acquiring goods or services through the General Fund?

Accepted Answer

A)  Appropriation 
B)  Expenditure 
C)  Requisition order 
D)  Encumbrance

Question 5

Encumbrances are recorded when a purchase order is filled or a contract is executed.

Accepted Answer

A) True 
 B)False

Question 6

An appropriation is authorization for administrators to incur specified amounts of liabilities on behalf of the government for specified purposes.

Accepted Answer

A) True 
 B)False

Question 7

With respect to budgetary reporting by governments,which of the following is not true?

Accepted Answer

A)  While GASB standards guide the format of the comparison, it does not require governments to maintain budgetary accounts. 
B)  The basis of accounting used to report the "Actual" column in the budgetary comparison schedule is prepared according to legal requirements for budget preparation; even if it is a departure from GASB standards. 
C)  Budgetary accounts are required to appear in the general purpose financial statements. 
D)  GASB standards require governments to present a comparison of budgeted and actual results for the General Fund and special revenue funds with legally adopted budgets.

Question 8

Rainy day funds that are available "in emergencies" or "revenue shortfalls" may still be classified as committed if the emergency or shortfall condition is specified and is of such a magnitude as to distinguish it from events that are routine.

Accepted Answer

A) True 
 B)False

Question 9

Real estate property taxes are an example of imposed tax revenue.

Accepted Answer

A) True 
 B)False

Question 10

When supplies ordered for use in an activity accounted for in the General Fund of a government are received at an actual price which is less than the estimated price on the purchase order,the Encumbrance Control account is:

Accepted Answer

A)  debited for the estimated price on the purchase order. 
B)  credited for the estimated price on the purchase order. 
C)  debited for the actual price for the supplies received. 
D)  credited for the actual price of the supplies received.

Question 11

GASB requires that the budgetary basis of accounting for the General Fund used in the Budget-Actual Comparison Schedule be on the same modified accrual basis as the governmental fund Statement of Revenues,Expenditures and Changes in Fund Balance.

Accepted Answer

A) True 
 B)False

Question 12

The general ledger journal entry in the General Fund to record encumbrances for the issuance of purchase orders would include:

Accepted Answer

A)  A credit to Encumbrance Control 
B)  A debit to Expenditures Control 
C)  A credit to Accounts Payable 
D)  A credit to Budgetary Fund Balance-Reserve for Encumbrances

Question 13

Under modified accrual accounting,property tax revenue should be recognized when measurable and available; available means collected no more than 60 days after year-end.

Accepted Answer

A) True 
 B)False

Question 14

Expenditure classification by character includes current,capital outlay,and debt service.

Accepted Answer

A) True 
 B)False

Question 15

Under GASB Statement 33 requirements for accrual accounting,property tax revenue should be recognized in the period that the tax is collected.

Accepted Answer

A) True 
 B)False

Question 16

Revenues,but not expense are recorded the same under accrual and modified accrual accounting.

Accepted Answer

A) True 
 B)False

Question 17

Modified accrual accounting records encumbrances when goods are ordered and accrual accounting only records a liability only when goods are received.

Accepted Answer

A) True 
 B)False

Question 18

When recording the budget,an excess of estimated revenues over appropriations would be credited to Budgetary Fund Balance.

Accepted Answer

A) True 
 B)False

Question 19

Under modified accrual accounting,budgetary authority expires at year end and the balances of Revenues and Expenditures are closed to

Accepted Answer

A)  Fund Balance 
B)  Net Assets 
C)  Other Financing Uses 
D)  Other Financing Sources

Question 20

Which of the following results in an expenditure?

Accepted Answer

A)  Place a purchase order. 
B)  Receive goods previously ordered. 
C)  Receive an invoice on goods previously received. 
D)  Payment of an invoice previously received.

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

Net resources of a governmental fund represented by prepaid insurance is an example of a nonspendable fund balance

Modified accrual accounting is essentially the same as cash basis except that long term assets are not recorded.

Which of the following results in an encumbrance?

What is the first step a government takes in acquiring goods or services through the General Fund?

Encumbrances are recorded when a purchase order is filled or a contract is executed.

An appropriation is authorization for administrators to incur specified amounts of liabilities on behalf of the government for specified purposes.

With respect to budgetary reporting by governments,which of the following is not true?

Rainy day funds that are available "in emergencies" or "revenue shortfalls" may still be classified as committed if the emergency or shortfall condition is specified and is of such a magnitude as to distinguish it from events that are routine.

Real estate property taxes are an example of imposed tax revenue.

When supplies ordered for use in an activity accounted for in the General Fund of a government are received at an actual price which is less than the estimated price on the purchase order,the Encumbrance Control account is:

GASB requires that the budgetary basis of accounting for the General Fund used in the Budget-Actual Comparison Schedule be on the same modified accrual basis as the governmental fund Statement of Revenues,Expenditures and Changes in Fund Balance.

The general ledger journal entry in the General Fund to record encumbrances for the issuance of purchase orders would include:

Under modified accrual accounting,property tax revenue should be recognized when measurable and available; available means collected no more than 60 days after year-end.

Expenditure classification by character includes current,capital outlay,and debt service.

Under GASB Statement 33 requirements for accrual accounting,property tax revenue should be recognized in the period that the tax is collected.

Revenues,but not expense are recorded the same under accrual and modified accrual accounting.

Modified accrual accounting records encumbrances when goods are ordered and accrual accounting only records a liability only when goods are received.

When recording the budget,an excess of estimated revenues over appropriations would be credited to Budgetary Fund Balance.

Under modified accrual accounting,budgetary authority expires at year end and the balances of Revenues and Expenditures are closed to

Which of the following results in an expenditure?