Question 1

Estimated Revenues are $4,600,000,and Appropriations are $4,000,000,the journal entry for the budget includes a:

Accepted Answer

A)  Debit to Budgetary Fund balance for 600,000 
B)  Debit to Encumbrances for 600,000 
C)  Credit to Budgetary Fund balance for 600,000 
D)  Credit to Budgetary Fund Balance -- Reserve for Encumbrances for 600,000

Question 2

Revenues of governmental fund types should be recognized when:

Accepted Answer

A)  collected in cash. 
B)  authorized by the budget ordinance. 
C)  taxes become delinquent. 
D)  measurable and available.

Question 3

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 4

When using modified accrual accounting,revenues should be recognized when measurable and available to finance expenditures of the current period.

Accepted Answer

A) True 
 B)False

Question 5

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 6

All of the following are budgetary accounts except:

Accepted Answer

A)  Estimated Revenues 
B)  Appropriations 
C)  Expenditures 
D)  All of the above

Question 7

Wages that have been earned by the employees of a governmental unit,but not paid at year-end,should be recorded in the General Fund by a debit to which of the following accounts?

Accepted Answer

A)  Appropriations. 
B)  Encumbrances. 
C)  Expenses. 
D)  Expenditures.

Question 8

Outstanding encumbrance of $80,000 for the purchase of furniture & fixtures is an example of a restricted fund balance.

Accepted Answer

A) True 
 B)False

Question 9

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 10

An example of an imposed nonexchange revenue is the property tax.

Accepted Answer

A) True 
 B)False

Question 11

The Township of Thomasville's General Fund has the following net resources at year end:
•$77,000 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 (assume no contractual obligation)
-What would be the total Nonspendable fund balance?

Accepted Answer

A)  $ 2,500 
B)  $ 77,000 
C)  $ 79,500 
D)  $159,500

Question 12

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 13

According to GASB Statement No.54 which of the following is an example of a nonspendable fund balance?

Accepted Answer

A)  Resources (such as supplies) that are used in operations rather than converted to cash 
B)  The corpus of a permanent fund that may not be spent 
C)  Prepaid insurance 
D)  All of the above

Question 14

Under modified accrual accounting,property tax revenue should be recognized when measurable and available; available means collected no more than 90 days after year-end.

Accepted Answer

A) True 
 B)False

Question 15

The Fire Department of a given city received an appropriation in the amount of $15,000,000 for the fiscal year ended June 30,2015. During the month ended July 31,2014,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 31,2014 is:

Accepted Answer

A)  $13,740,000. 
B)  $13,765,000. 
C)  $13,800,000. 
D)  $13,840,000.

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

Prepare the General Ledger journal entries for the General Fund for the Village of Bath for the year ended December 31,2015
a. The budget was formally adopted. Estimated revenues are $3,250,000 and appropriations are estimated to be $3,204,500.
b.Revenues were received in the amount of $3,256,500.
c.Purchase orders were issued in the amount of $1,690,000.
d.Purchase orders were filled in the amount of $1,436,500. The invoice amount was $1,443,000.
e.Expenditures,not encumbered,amounted to $1,352,000. (not yet paid)
f.Amounts from d and e are paid

Accepted Answer

The answer of Prepare the General Ledger journal entries for...

Question 18

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 19

The Police Department of a given city received an appropriation in the amount of $8,000,000 for the fiscal year ended June 30,2015.During the month ended July 31,2014,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 $490,000; the related invoice amount was $495,000; invoices were paid in the amount of $450,000; (c)salaries were accrued and paid in the amount of $475,000. The balance available for the police department as of July 31,2014 is:

Accepted Answer

A)  $7,065,000. 
B)  $7,025,000. 
C)  $7,020,000. 
D)  $6,575,000.

Question 20

If "rainy day" funds are available "in emergencies" or periods of "revenue shortfalls" they are not ordinarily classified as committed.

Accepted Answer

A) True 
 B)False

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

Estimated Revenues are $4,600,000,and Appropriations are $4,000,000,the journal entry for the budget includes a:

Revenues of governmental fund types should be recognized when:

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

When using modified accrual accounting,revenues should be recognized when measurable and available to finance expenditures of the current period.

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

All of the following are budgetary accounts except:

Wages that have been earned by the employees of a governmental unit,but not paid at year-end,should be recorded in the General Fund by a debit to which of the following accounts?

Outstanding encumbrance of $80,000 for the purchase of furniture & fixtures is an example of a restricted fund balance.

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

An example of an imposed nonexchange revenue is the property tax.

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

According to GASB Statement No.54 which of the following is an example of a nonspendable fund balance?

Under modified accrual accounting,property tax revenue should be recognized when measurable and available; available means collected no more than 90 days after year-end.

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

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

If "rainy day" funds are available "in emergencies" or periods of "revenue shortfalls" they are not ordinarily classified as committed.