Question 1

A transfer should be reported in the operating statement of the General Fund as a(an):

Accepted Answer

A)  Revenue or Expenditure. 
B)  Due from or Due to Other Funds. 
C)  Other Financing Source or Use. 
D)  None of the above, it is a direct increase or decrease to fund balance.

Question 2

Under the purchases method to account for supplies inventory,an asset is recorded when inventories are acquired,and the expenditure is recorded when the supplies are consumed.

Accepted Answer

A) True 
 B)False

Question 3

Debt service expenditures for interest are:

Accepted Answer

A)  Accrued. 
B)  Recorded when due but may be accrued at year end if the debt service due date is less than 30 days after year end. 
C)  Recorded when due but may be accrued at year end if the debt service due date is less than 60 days after year. 
D)  Reported only in the government-wide statements.

Question 4

Which of the following is true with respect to Special revenue funds?

Accepted Answer

A)  Special revenue funds are used when it is desirable to provide separate reporting of resources that are restricted or committed as to expenditure for purposes other than debt service or capital projects. 
B)  Special revenue funds are used when it is desirable to provide separate reporting of resources that are designated for specific purposes. 
C)  Special revenue funds are used when it is desirable to provide separate reporting for funds provided by other governments to support capital projects. 
D)  Both B and C

Question 5

Which of the following occurs when uncollectible delinquent taxes are written off? (Ignore interest and penalties)

Accepted Answer

A)  Delinquent Tax Receivable is increased. 
B)  Accounts receivable goes down and the Estimated Uncollectible Taxes Account is increased. 
C)  Net receivables remain unchanged. 
D)  Uncollectible Delinquent Tax Expense is increased.

Question 6

What is the difference between reciprocal interfund activity and nonreciprocal interfund activity?

Accepted Answer

The answer of What is the difference between reciprocal interfund...

Question 7

Special Revenue Funds may be used whenever a government wishes to segregate income for specific purposes.

Accepted Answer

A) True 
 B)False

Question 8

The fund balance represents the excess of fund assets over fund liabilities.

Accepted Answer

A) True 
 B)False

Question 9

The initial transfer of cash from the General Fund to establish a motor pool internal service fund would require the General Fund to credit Cash and debit:

Accepted Answer

A)  Investment in Internal Service Fund. 
B)  Other Financing Uses-Transfers Out Control. 
C)  Expenditures - Vehicle maintenance. 
D)  Accounts Receivable-Internal Service Fund.

Question 10

Nonreciprocal interfund activity:

Accepted Answer

A)  Includes interfund services provided and used 
B)  Includes exchange-like transactions 
C)  Includes interfund loans 
D)  Includes interfund transfers and reimbursements

Question 11

Which of the following is true regarding the use of Special Revenue Funds?

Accepted Answer

A)  Special Revenue Funds may be used whenever a government wishes to segregate income for specific purposes. 
B)  Special Revenue Funds are appropriate if the sole source of resources are assigned funds 
C)  Special Revenue Funds may only be used when a substantial portion of the resources are provided by restricted or committed revenue sources. 
D)  Once a Special Revenue Fund is established, it will continue to be a Special Revenue Fund until all resources are exhausted.

Question 12

In special revenue funds,revenues are recognized when available and measurable.

Accepted Answer

A) True 
 B)False

Question 13

Expenditures for claims and judgments,compensated absences,and special termination benefits should be recognized in the General Fund whether or not the liabilities are to be paid with available resources.

Accepted Answer

A) True 
 B)False

Question 14

The expenditures account equals the amount of supplies purchased during a period under which of the following inventory methods?

Accepted Answer

A)  Perpetual. 
B)  Purchases. 
C)  Periodic. 
D)  Consumption.

Question 15

Center City's General Fund has the following net resources at December 31,2015:
•Total assets of $846,000 and liabilities of $137,500.
•$400,000 rainy day fund approved by the township governing board
•$3,600 of supplies inventory
•$15,000 state grant for snow removal
•$120,000 contractual obligations for capital projects
•$66,000 of outstanding encumbrances representing purchase orders which will be paid from the General Fund
Required:
 Prepare the fund balance section of the Balance Sheet

Accepted Answer

The answer of Center City's General Fund has the following...

Question 16

Which of the following accounts in the General Fund is credited when a purchase order is approved?

Accepted Answer

A)  Appropriations Control. 
B)  Encumbrances Control. 
C)  Budgetary Fund Balance -- Reserve for Encumbrances. 
D)  Vouchers Payable.

Question 17

Which of the following is true regarding modified accrual accounting?

Accepted Answer

A)  Modified accrual accounting requires that all expenditures be recognized on the cash basis. 
B)  Revenues are recognized in the period in which they become available and measurable, and expenditures are recognized at the time a liability is incurred, except for principal and interest on long-term debt. 
C)  Modified accrual accounting is required for all fund financial statements. 
D)  All of the above.

Question 18

Purchase orders for items ordered by the General Fund totaled $ 205,000. Upon receipt,invoices for these items totaled $200,000. Which of the following will take place on the date the goods are received.

Accepted Answer

A)  An encumbrance is debited for $205,000. 
B)  Budgetary Fund Balance -- Reserve for Encumbrances is credited for $200,000. 
C)  An expenditure is credited for $205,000. 
D)  A liability is credited for $200,000.

Question 19

GASB requires which of the following to be reported separately after other financing sources and uses in the Statement of Revenues,Expenditures,and Changes in Fund Balance?

Accepted Answer

A)  Special items. 
B)  Extraordinary items. 
C)  Interfund transfers. 
D)  A and B

Question 20

Resources appropriately reported within proprietary or fiduciary funds are included in special revenue funds.

Accepted Answer

A) True 
 B)False

Exam 4: Accounting for the General and Special Revenue Funds

A transfer should be reported in the operating statement of the General Fund as a(an) :

Under the purchases method to account for supplies inventory,an asset is recorded when inventories are acquired,and the expenditure is recorded when the supplies are consumed.

Debt service expenditures for interest are:

Which of the following is true with respect to Special revenue funds?

Which of the following occurs when uncollectible delinquent taxes are written off? (Ignore interest and penalties)

What is the difference between reciprocal interfund activity and nonreciprocal interfund activity?

Special Revenue Funds may be used whenever a government wishes to segregate income for specific purposes.

The fund balance represents the excess of fund assets over fund liabilities.

The initial transfer of cash from the General Fund to establish a motor pool internal service fund would require the General Fund to credit Cash and debit:

Nonreciprocal interfund activity:

Which of the following is true regarding the use of Special Revenue Funds?

In special revenue funds,revenues are recognized when available and measurable.

Expenditures for claims and judgments,compensated absences,and special termination benefits should be recognized in the General Fund whether or not the liabilities are to be paid with available resources.

The expenditures account equals the amount of supplies purchased during a period under which of the following inventory methods?

Which of the following accounts in the General Fund is credited when a purchase order is approved?

Which of the following is true regarding modified accrual accounting?

Purchase orders for items ordered by the General Fund totaled $ 205,000. Upon receipt,invoices for these items totaled $200,000. Which of the following will take place on the date the goods are received.

GASB requires which of the following to be reported separately after other financing sources and uses in the Statement of Revenues,Expenditures,and Changes in Fund Balance?

Resources appropriately reported within proprietary or fiduciary funds are included in special revenue funds.