Question 1

Which of the following is a governmental fund?

Accepted Answer

A)  Enterprise fund. 
B)  Internal service fund. 
C)  Permanent fund. 
D)  Investment trust fund. 
E)  Agency fund.

Question 2

Which of the following funds is most likely created with an endowed gift?

Accepted Answer

A)  Enterprise Fund. 
B)  Internal Service Fund. 
C)  Debt Service Fund. 
D)  Capital Projects Fund. 
E)  Permanent Fund.

Question 3

What are the broad classifications of funds for a governmental entity such as a city?

Accepted Answer

A)  General, governmental, and trust funds. 
B)  Governmental, proprietary, and fiduciary funds. 
C)  Revenue, trust, and governmental funds. 
D)  Enterprise, revenue, and fiduciary funds. 
E)  Governmental, agency, and enterprise funds.

Question 4

A city received a grant of $5,000,000 from a private agency.The money was to be used to build a new city library.In which fund should the money be recorded for the governmental fund financial statements?

Accepted Answer

A)  The General Fund. 
B)  An Expendable Trust Fund. 
C)  A Capital Projects Fund. 
D)  An Agency Fund. 
E)  A Permanent Fund.

Question 5

Which of the following is not one of the categories for reporting fund balances of governmental funds?

Accepted Answer

A)  Spendable 
B)  Nonspendable 
C)  Assigned 
D)  Unassigned 
E)  Restricted

Question 6

What account is debited in the general fund when equipment is received by a governmental entity?

Accepted Answer

A)  Expenditures. 
B)  Encumbrances. 
C)  Plant assets. 
D)  Accounts Payable. 
E)  Fund Balance-Reserve for Encumbrances.

Question 7

Revenue from property taxes should be recorded in the General Fund

Accepted Answer

A)  When received. 
B)  When there is an enforceable legal claim. 
C)  When they are available for recognition. 
D)  In the period for which the resulting resources are required or permitted to be used. 
E)  In the period in which the tax bills are mailed.

Question 8

Which group of government financial statements reports all revenues and all costs as well as all assets and liabilities of the governmental entity?

Accepted Answer

A)  GAAP-based Financial Statements 
B)  Fund financial Statements. 
C)  Governmental fund financial statements. 
D)  Government-wide financial statements. 
E)  General fund financial statements.

Question 9

What are the two proprietary fund types?

Accepted Answer

The answer of What are the two proprietary fund types?...

Question 10

On January 1, 2018, Wakefield City purchased office supplies for $40,000.During the year, $35,000 of these supplies were used.
Required:
Record the journal entries for these transactions using the consumption method.(Disregard the encumbrance entries.)

Accepted Answer

The answer of On January 1, 2018, Wakefield City purchased...

Question 11

The term "current financial resources" refers to

Accepted Answer

A)  Those assets that can quickly be converted into cash. 
B)  Assets that are available to be used for current expenditures. 
C)  The government's current assets and current liabilities. 
D)  The current value of all net assets owned by the governmental unit. 
E)  Financial resources used to provide electricity to local citizens.

Question 12

The reporting of the fund balance of governmental funds will result in a maximum of how many categories:

Accepted Answer

A)  One 
B)  Two 
C)  Three 
D)  Four 
E)  Five

Question 13

What are the two sets of financial statements mandated by GASB for state and local governments? For each set, what are the names of the individual statements that must be produced?

Accepted Answer

The answer of What are the two sets of financial...

Question 14

Salaries and wages that have been earned by governmental employees that have not yet been paid are recorded in the general fund as:

Accepted Answer

A)  An expenditure. 
B)  An encumbrance. 
C)  An appropriation. 
D)  An expense. 
E)  An investment.

Question 15

What is the primary difference between monies accounted for in the general fund and monies accounted for in the special revenue fund?

Accepted Answer

The answer of What is the primary difference between monies...

Question 16

Which of the following statements is false regarding government-wide financial statements?

Accepted Answer

A)  Government-wide financial statements report a government's activities and financial position as a whole. 
B)  The government-wide financial statement approach helps users make long-term evaluations of the financial decisions and stability of the government. 
C)  Government-wide financial statements focus on the short-term instead of the long-term. 
D)  Government-wide financial statements assess the finances of the government in its entirety, including the year's operating results. 
E)  The measurement focus of government-wide financial statements is on all economic resources and utilizes accrual accounting.

Question 17

Which organization is responsible for establishing accounting principles for governmental entities? By whom was this organization established?

Accepted Answer

The answer of Which organization is responsible for establishing accounting...

Question 18

The Governmental Accounting Standards Board (GASB) requires state and local governments to prepare two sets of financial statements which include:

Accepted Answer

A)  Fund financial statements and proprietary financial statements. 
B)  Proprietary financial statements and fund- based financial statements. 
C)  Fund financial statements and government-wide financial statements. 
D)  GAAP-based financial statements and government-wide financial statements. 
E)  Statement of net assets and statement of cash flows.

Question 19

Governmental funds are

Accepted Answer

A)  Funds used to account for the activities of a government that are carried out primarily to provide services to citizens. 
B)  Funds used to account for a government's ongoing organizations and activities that are similar to those operated by for-profit organizations. 
C)  Funds used to account for monies held by the government in a trustee or agency capacity. 
D)  Funds used to account for all financial resources except those required to be accounted for in another fund. 
E)  Funds used to account for resources that are restricted or committed for a specific purpose other than debt payments or capital projects.

Question 20

Property taxes of 1,500,000 are levied for Miner County.All except 5% of the taxes are expected to be collected within 60 days of year-end.
Required:
Prepare the required journal entry and identify the fund in which it is recorded.

Accepted Answer

The answer of Property taxes of 1,500,000 are levied for...

Exam 16: Accounting for State and Local Governments, Part I