Question 1

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

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Question 2

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...

Question 3

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

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Question 4

Holloway City issues bonds in the amount of $700,000 to finance the construction of a sidewalk in a specific neighborhood.Repayment of the bonds will be derived from a special assessment on the owners in the neighborhood.The government accepts legal obligation for the construction of the sidewalk.Total interest on the bonds will total $35,000 and will be repaid at the time of repayment of the bonds.
Required:
Prepare the journal entries to record each of the following in preparation for (A) the government-wide financial statements and (B) the governmental fund financial statements.For the governmental fund financial statements, include the fund type in which the entry is recorded.Prepare all entries for (A) and all entries for (B) separately.
Journal entries to record:
1) Issuance of the bonds
2) Payment to the contractor
3) The special assessment by the city on the neighborhood residents
4) The assessment collection by the city
5) Payment of the debt on the special assessment bonds

Accepted Answer

The answer of Holloway City issues bonds in the amount...

Question 5

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

Accepted Answer

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Question 6

When a city received a private donation of $1,000,000 stipulating that the principal donation would be preserved but allowing the interest income to be spent on building a city park with access for disabled children, which fund should the money be recorded in?

Accepted Answer

A)  The general fund. 
B)  A private purpose trust fund. 
C)  A permanent fund. 
D)  An agency fund. 
E)  A special revenue fund.

Question 7

When a city holds pension monies for city employees, the monies should be recorded in

Accepted Answer

A)  The general fund. 
B)  A private purpose trust fund. 
C)  A fiduciary fund. 
D)  An agency fund. 
E)  A special revenue fund.

Question 8

For a government, what kinds of operations are accounted for using a proprietary fund? Give three examples.

Accepted Answer

The answer of For a government, what kinds of operations...

Question 9

Which of the following is a fiduciary fund?

Accepted Answer

A)  Pension trust fund. 
B)  Debt service fund. 
C)  Permanent fund. 
D)  Enterprise fund. 
E)  Capital projects fund.

Question 10

According to GASB Concepts Statement No.1, what are the three groups of primary users of external state and local governmental financial reports?

Accepted Answer

A)  The Securities and Exchange Commission, the citizenry, and legislative and oversight bodies. 
B)  The Securities and Exchange Commission, legislative and oversight bodies, and investors and creditors. 
C)  The Securities and Exchange Commission, the citizenry, and investors and creditors. 
D)  The citizenry, legislative and oversight bodies, and investors and creditors. 
E)  The citizenry, management, and the Governmental Accounting Office.

Question 11

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 12

A $5,000,000 bond is issued by Northern City to build a new hospital and the proceeds of the bond are received directly by the fund that will be disbursing the monies for the hospital construction.
Required:
Prepare the journal entry and identify the fund in which it is recorded to reflect the bond issue.

Accepted Answer

The answer of A $5,000,000 bond is issued by Northern...

Question 13

Under modified accrual accounting, when should an expenditure be recorded to recognize interest on long-term debt?

Accepted Answer

A)  At the end of each accounting period. 
B)  When payment is due within one fiscal year. 
C)  When it reduces current financial resources. 
D)  When cash is available to pay the interest. 
E)  When the interest is incurred.

Question 14

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 15

What is the purpose of government-wide financial statements?

Accepted Answer

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Question 16

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 17

What is the purpose of fund financial statements?

Accepted Answer

The answer of What is the purpose of fund financial...

Question 18

For what is a special revenue fund used to account?

Accepted Answer

The answer of For what is a special revenue fund...

Question 19

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 20

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.

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

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.)

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.