Question 1

An example of expenditure classification by character would be:

Accepted Answer

A)  Capital outlay. 
B)  Public safety. 
C)  Police department. 
D)  Salaries.

Question 2

At year-end,the balance of Expenditures and Encumbrances accounts are closed to:

Accepted Answer

A)  Budgetary Fund Balance 
B)  Expenses 
C)  Expenditure Control 
D)  Fund Balance

Question 3

Revenues are raised to finance governmental activities,but revenues may be expended only for purposes and in amounts approved by the legislative branch in compliance with laws of competent jurisdictions,which is known as the

Accepted Answer

A)  Budgetary Fund 
B)  Encumbered Process 
C)  Expended Process 
D)  Appropriations Process

Question 4

The Police Department of a given city received an appropriation in the amount of $8,000,000 for the fiscal year ended June 30,2012.During the month ended July 31,2011,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 $460,000; the related invoice amount was $463,000; invoices were paid in the amount of $450,000; (c)salaries were accrued and paid in the amount of $480,000.The balance available for the police department as of July 31,2011 is:

Accepted Answer

A)  $7,010,000. 
B)  $7,017,000. 
C)  $7,000,000. 
D)  $7,007,000.

Question 5

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

Accepted Answer

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

Question 6

Sales taxes,income taxes,and motor fuel taxes are examples of which class of nonexchange transactions?

Accepted Answer

A)  Imposed nonexchange transactions. 
B)  Derived tax revenues. 
C)  Government-mandated nonexchange transactions. 
D)  Voluntary nonexchange transactions.

Question 7

Which of the following is not one of the four eligibility requirements for a government to record revenue from a nonexchange transaction?

Accepted Answer

A)  Required characteristics of Recipients 
B)  Time requirement 
C)  Measurable and available 
D)  Contingencies

Question 8

Governmental Funds Fund Balance is displayed in which of the following categories?

Accepted Answer

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

Question 9

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 10

The modified accrual basis is a distinct system of accounting that:

Accepted Answer

A)  Differs from accrual accounting only in its failure to recognize long term assets and liabilities. 
B)  Records expenditures and fund balances. 
C)  Records expenses and revenues the same as accrual accounting. 
D)  Is equivalent to cash basis accounting.

Question 11

The difference between an expenditure and an encumbrance is?

Accepted Answer

A)  An expenditure is the actual amount of an authorized liability and encumbrances are estimates. 
B)  An encumbrance is an expended expenditure. 
C)  There is no difference between the two. 
D)  Expenditures are estimates and encumbrances are not.

Question 12

The four classes of non-exchange transactions include all of the following except:

Accepted Answer

A)  Imposed non-exchange revenues. 
B)  Derived tax revenues. 
C)  Donor exchange revenues. 
D)  Voluntary non-exchange transactions.

Question 13

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 14

The GASB has created four "eligibility requirements" that must be met before revenue can be recognized:
 (1)required characteristics of recipients,(2)timing,(3)reimbursements,and (4)contingencies.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following items would typically not need an encumbrance?

Accepted Answer

A)  New Building 
B)  Regular Salaries 
C)  New Computer 
D)  Office Equipment

Question 16

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 17

What are the revenue and expenditure recognition criteria under modified accrual accounting?
 Include in your answer specifically the recognition of property tax revenue.

Accepted Answer

The answer of What are the revenue and expenditure recognition...

Question 18

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.Following the procedures outlined in the text,the journal entries for the control accounts would result in a(an):

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 19

A donation received is considered a voluntary nonexchange transaction only if it is unrestricted.

Accepted Answer

A) True 
 B)False

Question 20

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.

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

An example of expenditure classification by character would be:

At year-end,the balance of Expenditures and Encumbrances accounts are closed to:

Revenues are raised to finance governmental activities,but revenues may be expended only for purposes and in amounts approved by the legislative branch in compliance with laws of competent jurisdictions,which is known as the

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

Sales taxes,income taxes,and motor fuel taxes are examples of which class of nonexchange transactions?

Which of the following is not one of the four eligibility requirements for a government to record revenue from a nonexchange transaction?

Governmental Funds Fund Balance is displayed in which of the following categories?

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

The modified accrual basis is a distinct system of accounting that:

The difference between an expenditure and an encumbrance is?

The four classes of non-exchange transactions include all of the following except:

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

The GASB has created four "eligibility requirements" that must be met before revenue can be recognized: (1)required characteristics of recipients,(2)timing,(3)reimbursements,and (4)contingencies.

Which of the following items would typically not need an encumbrance?

Revenues in governmental fund accounting:

What are the revenue and expenditure recognition criteria under modified accrual accounting? Include in your answer specifically the recognition of property tax revenue.

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.Following the procedures outlined in the text,the journal entries for the control accounts would result in a(an) :

A donation received is considered a voluntary nonexchange transaction only if it is unrestricted.

Which of the following results in an encumbrance?