Question 1

A nonexchange transaction is one where a government gives or receives value without directly receiving or giving.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not one of the four classes into which nonexchange transactions apply in accordance with GASB Statement No.33?

Accepted Answer

A)  Voluntary nonexchange transactions. 
B)  Imposed nonexchange revenues. 
C)  Derived Tax Revenues. 
D)  Mandatory exchange transactions.

Question 3

Sales taxes,income taxes,and motor fuel taxes are examples of exchange transactions.

Accepted Answer

A) True 
 B)False

Question 4

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 5

At year-end,budgetary authority expires and the balances of Expenditures and Encumbrances accounts are closed to

Accepted Answer

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

Question 6

If Budgetary Fund Balance was credited in the process of recording a budget for the General Fund of a governmental unit,it can be assumed that:

Accepted Answer

A)  Estimated Revenues exceed Appropriations. 
B)  Estimated Expenses exceed Actual Revenues. 
C)  Actual Expenses exceed Estimated Expenses. 
D)  Appropriations exceed Estimated Revenues.

Question 7

With respect to Governmental Funds,Fund balance must be broken down into assigned and unassigned.

Accepted Answer

A) True 
 B)False

Question 8

Budgetary accounts begin each year with a zero balance and are closed at the end of each year.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Classifications by function includes all of the following except

Accepted Answer

A)  Debt Service 
B)  General Government 
C)  Public Safety 
D)  Highways & Streets

Question 11

Which of the following would not be a nonexchange transaction for a state government?

Accepted Answer

A)  Fines and forfeits. 
B)  Property taxes. 
C)  Sales of lottery tickets. 
D)  Income taxes.

Question 12

An exchange transaction is one where each party is given and receives essentially equal value.

Accepted Answer

A) True 
 B)False

Question 13

Define the term "Revenue" and distinguish between that term and "Other Financing Sources."

Accepted Answer

The answer of Define the term "Revenue" and distinguish between...

Question 14

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 15

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 16

The journal entry to record a purchase order in the General Fund would be a debit to encumbrances control account and credit the Budgetary Fund Balance-Reserve for Encumbrances account.

Accepted Answer

A) True 
 B)False

Question 17

The general ledger journal entry in the General Fund to record actual expenditures and reversal of the associated encumbrance would include:

Accepted Answer

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

Question 18

In its 2012 Budgetary Comparison Schedule,the amount Park Ridge reports for expenditures (and encumbrances,if applicable)would be:

Accepted Answer

A)  $18,700,000. 
B)  $18,100,000. 
C)  $17,200,000. 
D)  $17,900,000.

Question 19

The final appropriations budget:

Accepted Answer

A)  Can be changed at any time by the accounting department 
B)  Can be exceeded by actual appropriations 
C)  Is legal and binding 
D)  None of the above

Question 20

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.

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

A nonexchange transaction is one where a government gives or receives value without directly receiving or giving.

Which of the following is not one of the four classes into which nonexchange transactions apply in accordance with GASB Statement No.33?

Sales taxes,income taxes,and motor fuel taxes are examples of exchange transactions.

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

At year-end,budgetary authority expires and the balances of Expenditures and Encumbrances accounts are closed to

If Budgetary Fund Balance was credited in the process of recording a budget for the General Fund of a governmental unit,it can be assumed that:

With respect to Governmental Funds,Fund balance must be broken down into assigned and unassigned.

Budgetary accounts begin each year with a zero balance and are closed at the end of each year.

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

Classifications by function includes all of the following except

Which of the following would not be a nonexchange transaction for a state government?

An exchange transaction is one where each party is given and receives essentially equal value.

Define the term "Revenue" and distinguish between that term and "Other Financing Sources."

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.

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

The journal entry to record a purchase order in the General Fund would be a debit to encumbrances control account and credit the Budgetary Fund Balance-Reserve for Encumbrances account.

The general ledger journal entry in the General Fund to record actual expenditures and reversal of the associated encumbrance would include:

In its 2012 Budgetary Comparison Schedule,the amount Park Ridge reports for expenditures (and encumbrances,if applicable) would be:

The final appropriations budget:

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?