Question 1

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

Question 2

Fines and Forfeits are typically recognized as revenue when the fines are levied and or monies forfeited.

Accepted Answer

A) True 
 B)False

Question 3

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 4

Briefly discuss how governmental budgeting differs from budgeting for businesses.

Accepted Answer

The answer of Briefly discuss how governmental budgeting differs from...

Question 5

Define and give an example of each of the following categories of Fund Balance outlined in GASB Statement No.54:
Nonspendable
Restricted
Committed
Assigned
Unassigned

Accepted Answer

The answer of Define and give an example of each...

Question 6

What would be the total Restricted Fund balance?

Accepted Answer

A)  $275,000 
B)  $210,000 
C)  $150,000 
D)  $60,000

Question 7

The modified accrual basis is a distinct system of accounting that contains financial statement elements that appear nowhere else.

Accepted Answer

A) True 
 B)False

Question 8

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.

Question 9

The City of Fairport adopted the following budget for fiscal year 2012:
  In addition,the City reported the following actual amounts for the same fiscal year.  Required:
 Prepare a budgetary comparison schedule for the City for the year ended December 31,2012 assuming the fund balance of the General Fund (budgetary basis)was $512,000 at January 1,2012.No "original budget" column is required.Include a "variance" column.

Accepted Answer

The answer of The City of Fairport adopted the following...

Question 10

Budgets are not legally binding upon administrators.

Accepted Answer

A) True 
 B)False

Question 11

The fund balance of a government fund is analogous to the capital of an investor-owned entity.

Accepted Answer

A) True 
 B)False

Question 12

Fund balance indicates the legal claim of voters on the net assets of a proprietary fund.

Accepted Answer

A) True 
 B)False

Question 13

A transaction in which a government gives or receives value without directly receiving or giving equal value in exchange is known as a(n):

Accepted Answer

A)  Non-exchange Transaction. 
B)  Fair Exchange. 
C)  Equity Transaction. 
D)  Not Fair Market Exchange transaction.

Question 14

Which of the following statements is not true with respect to GASB Statement No.54 regarding restricted fund balances?

Accepted Answer

A)  Restricted funds are those that are subject to constraints imposed by external parties or by law. 
B)  Restricted fund balance can result from legally enforceable requirements that resources be used only for specific purpose. 
C)  Restricted funds are the result of a self-imposed constraint by a government upon itself. 
D)  All of the above are correct

Question 15

Real estate property tax is an example of derived tax revenue.

Accepted Answer

A) True 
 B)False

Question 16

When a liability is incurred as authorized by an appropriation,the appropriation is said to be:

Accepted Answer

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

Question 17

Encumbrance is the legal authorization for administrators of governmental unit to incur liabilities for purposes specified and to not exceed the amount specified.

Accepted Answer

A) True 
 B)False

Question 18

There are no expenses in modified accrual funds.

Accepted Answer

A) True 
 B)False

Question 19

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 20

A classification of appropriations and expenditures that deals with the time period involved and includes current expenditures,capital outlays,and debt service is:

Accepted Answer

A)  Object 
B)  Activities 
C)  Character 
D)  Function

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

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

Fines and Forfeits are typically recognized as revenue when the fines are levied and or monies forfeited.

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.

Briefly discuss how governmental budgeting differs from budgeting for businesses.

Define and give an example of each of the following categories of Fund Balance outlined in GASB Statement No.54: Nonspendable Restricted Committed Assigned Unassigned

What would be the total Restricted Fund balance?

The modified accrual basis is a distinct system of accounting that contains financial statement elements that appear nowhere else.

Which of the following results in an expenditure?

Budgets are not legally binding upon administrators.

The fund balance of a government fund is analogous to the capital of an investor-owned entity.

Fund balance indicates the legal claim of voters on the net assets of a proprietary fund.

A transaction in which a government gives or receives value without directly receiving or giving equal value in exchange is known as a(n) :

Which of the following statements is not true with respect to GASB Statement No.54 regarding restricted fund balances?

Real estate property tax is an example of derived tax revenue.

When a liability is incurred as authorized by an appropriation,the appropriation is said to be:

Encumbrance is the legal authorization for administrators of governmental unit to incur liabilities for purposes specified and to not exceed the amount specified.

There are no expenses in modified accrual funds.

Revenues of governmental fund types should be recognized when:

A classification of appropriations and expenditures that deals with the time period involved and includes current expenditures,capital outlays,and debt service is: