Question 1

Proprietary funds are required to prepare financial statements that include: A. Statement of Activities
B. Statement of Revenues, Expenditures and Changes in Fund Balance
C. Balance Sheet
D. Statement of Cash Flows
E. Statement of Net Position
F. Statement of Revenues, Expenses and Changes in Net Position

Accepted Answer

A) C,D,F 
B) A,B,D 
C) B,C,D 
D) D,E,F

Question 2

Static City started a department to provide copy,printing and mailing services for all departments and agencies of the city.
During the fiscal year from July 1,2013 through June 30,2014,the copy services department had the following transactions:
1.Paper and toner inventory was purchased for $58,000,on account.
2.The paper and toner inventory physical count showed only $8,000 on hand at June 30,2014.
3.The department billed other departments for services rendered to them amounting to: General Fund,$43,000; Enterprise Fund,$24,000; Debt Service Fund,$21,000; and Trust Fund,$16,000.All receivables were collected with the exception of $6,000 from the Trust Fund which is expected to be collected in July,2014.
4.The department incurred and paid the following expenses: salaries and wages,$23,000; Electric,$8,000; Other operating expenses,$6,000.Also,$63,000 of the Accounts Payable were paid during the year.
5.Depreciation Expense on Equipment amounted to $6,000 for the year ending June 30,2014.
6.The department prepared the closing entries on June 30,2014.
Required:
For the fiscal year ended June 30,2014,prepare the journal entries to record the transactions for the Internal Service Fund.

Accepted Answer

The answer of Static City started a department to provide...

Question 3

Trust funds are fiduciary funds used to account for multigovernment external investment pools sponsored by the governmental entity.

Accepted Answer

A) True 
 B)False

Question 4

Internal service funds primarily provide goods and services to other departments or agencies.

Accepted Answer

A) True 
 B)False

Question 5

Prepare journal entries in the motor pool department of Hill County to record each of the following transactions.
1.The General Fund contributed $50,000 cash to the motor pool department.The motor pool department purchased four vehicles on July 1,2014 by paying $50,000 down and borrowing $70,000 on a 5%,3-year note.
2.Billed General Fund departments $430,000 for services provided to those departments.Billings to the Enterprise Fund totaled $210,000.All billings were collected by year-end (June 30,2015)except for $80,000 charged to the General Fund.
3.Accrued year-end adjustments at June 30,2015 for interest expense and depreciation.The useful life of the equipment is 5 years with no salvage value.

Accepted Answer

The answer of Prepare journal entries in the motor pool...

Question 6

The financial statements of a proprietary fund are similar to those of a business enterprise except for

Accepted Answer

A) proprietary funds do not report income taxes on the operating statement. 
B) proprietary funds do not have paid-in capital or capital stock. 
C) proprietary funds use modified accrual accounting. 
D) proprietary funds may have account titles such as due from general fund.

Question 7

The three financial statements for a proprietary fund: statement of net position; statement of revenues,expenses,and changes in fund net position; and statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 8

Journalize the following utility transactions in the Quest County Enterprise Fund:
1.Billings to external customers $1,600,000; billings to Quest County governmental funds $130,000.
2.Collected refundable deposits from new customers $10,000.
3.Collected 95% of all billings by fiscal year-end.
4.Refunded $4,000 in deposits to former customers.
5.Unbilled services to outside customers at year-end $14,000.

Accepted Answer

The answer of Journalize the following utility transactions in the...

Question 9

The following transactions relate to a municipal golf course and tennis club,financed with debt secured by membership fees.
1.The General Fund loaned $25,000,000 cash to the Enterprise Fund.The note is not interest-bearing.
2.The municipal golf course and tennis club purchased land and constructed the facilities which totaled expenditures of $23,700,000.
3.Bonds were issued by the municipal golf course and tennis club for $20,000,000,par value of the bonds.
4.Membership fees were billed in the amount of $4,800,000.$4,200,000 was collected.
5.$5,000,000 was repaid to the general fund,with the anticipation of repaying $5,000,000 more per year for the next four years.
Required:
Prepare the necessary journal entries for each of the above transactions for the Enterprise Fund.

Accepted Answer

The answer of The following transactions relate to a municipal...

Question 10

Enterprise funds are accounted for in a manner similar to

Accepted Answer

A) internal service funds. 
B) capital project funds. 
C) special revenue funds. 
D) debt service funds.

Exam 21: Accounting for State and Local Governmental Units - Proprietary and Fiduciary Funds

Trust funds are fiduciary funds used to account for multigovernment external investment pools sponsored by the governmental entity.

Internal service funds primarily provide goods and services to other departments or agencies.

The financial statements of a proprietary fund are similar to those of a business enterprise except for

The three financial statements for a proprietary fund: statement of net position; statement of revenues,expenses,and changes in fund net position; and statement of cash flows.

Enterprise funds are accounted for in a manner similar to