Question 1

Under governmental accounting principles for capital and operating ; expenditures are recorded each period for the amount of the annual lease payment for all , but the expenditures are classified differently for capital and operating .

Accepted Answer

A) True 
 B)False

Question 2

Service type are typically accounted for in the General Fund.

Accepted Answer

A) True 
 B)False

Question 3

A government offering a defined benefit pension plan determines it is necessary to alter actuarial assumptions increasing the estimated cost of pension benefits. How would the resulting increase in the net pension liability be recognized in the financial statements in the year the plan is changed?

Accepted Answer

A)  The increase in net pension liability would be expensed in the period the plan is changed. 
B)  The increase in net pension liability would be deferred and amortized over the remaining service life of the employees. 
C)  The increase in net pension liability would be deferred and amortized over five years. 
D)  The increase in net pension liability would be deferred and amortized over ten years.

Question 4

On Dec. 31, 2016, the Eastville City water department leased equipment under a noncancelable lease agreement that transferred title to the city after making seven payments of $ 15,250. The present value 6% interest) of the minimum lease payments is $90,250. Payments are to take place on December 31 beginning in 2016.
Required: Prepare journal entries for 2016 and 2017 assuming the estimated useful life of the equipment is 10 years.

Accepted Answer

The answer of On Dec. 31, 2016, the Eastville City...

Question 5

Special-purpose governmental entities that are engaged in a single business activity are not required to prepare government-wide financial statements, but issue only enterprise fund statements.

Accepted Answer

A) True 
 B)False

Question 6

How should the payments under a capital lease be accounted for in the governmental funds?

Accepted Answer

The answer of How should the payments under a capital...

Question 7

Assume a government is determined to be a special-purpose government engaged in business-type activities only. Which of the following financial statements would be required?

Accepted Answer

A)  Balance Sheet, Statement of Revenues, Expenditures, and Changes in fund Balances. 
B)  Statement of Net Position, Statement of Activities, Statement of Cash Flows. 
C)  Statement of Net Position, Statement of Revenues, Expenses, and Changes in Net Position, Statement of Cash Flows. 
D)  Statement of Net Position and Statement of Activities.

Question 8

A special assessment tax is

Accepted Answer

A)  Assessed against all property owners following a referendum in which voters approved the special project being constructed. 
B)  Assessed only against certain property owners who are deemed to benefit from the service or project being paid for by the proceeds of the special assessment levy. 
C)  A waiver of property taxes for businesses willing to locate within a government's jurisdiction. 
D)  None of the above

Question 9

Capital assets acquired through capital by the General Fund are reported in the General Fund Balance Sheet.

Accepted Answer

A) True 
 B)False

Question 10

At the inception of a capital lease agreement for a piece of equipment used in governmental operations,

Accepted Answer

A)  A liability is incurred and reported in the governmental fund's balance sheet. 
B)  A liability is incurred and reported in the government-wide financial statements. 
C)  An expenditure is recorded in the governmental fund. 
D)  Both B and C.

Question 11

For financial reporting purposes, governmental health care entities, public school systems, other not-for-profit entities and public colleges and universities may be considered to be special-purpose entities.

Accepted Answer

A) True 
 B)False

Question 12

Assume a government is a special-purpose entity engaged in fiduciary activities only. Which of the following financial statements would be required?

Accepted Answer

A)  Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position. 
B)  Statement of Net Position and Statement of Activities. 
C)  Statement of Net Position, Statement of Activities, Statement of Fiduciary Net Position, Statement of Changes in Fiduciary Net Position. 
D)  Statement of Fiduciary Net Position, Statement of Changes in Fiduciary Net Position, and Statement of Cash Flows.

Question 13

Which of the following is true for a city government participating in a state sponsored pension plan for its law enforcement employees.

Accepted Answer

A)  The General Fund will report pension expenditure for the annual required contribution to the State Retirement System. 
B)  The Government-wide Statement of Net Position will report a liability to the extent the city's share of the total pension liability exceeds the net fiduciary position of the state plan. 
C)  Both A and B. 
D)  Neither A nor B.

Question 14

List three examples types of general-purpose state or local governments and three special-purpose local governments.

Accepted Answer

The answer of List three examples types of general-purpose state...

Question 15

What are the required parts of the annual financial report for special-purpose local governments engaged only in business-type activities?

Accepted Answer

The answer of What are the required parts of the...

Question 16

A government sponsoring a defined benefit pension plan changes an assumption underlying the measurement of the net pension liability. Assuming the estimated of this liability increases, how will this be reflected in the government-wide statements?

Accepted Answer

A)  As an increase in the net pension liability and an expense. 
B)  As an increase in the net pension liability and a deferred outflow of resources. 
C)  As an increase in the net pension liability and an intangible asset. 
D)  None of the above, changes in estimated are not recorded.

Question 17

A downtown shopping district desires additional police patrols and agrees to pay for the service through a special assessment property tax. Which fund should be used to account for the special assessment tax proceeds?

Accepted Answer

A)  General. 
B)  Capital projects. 
C)  Agency. 
D)  Debt service.

Question 18

When a government acquires general fixed assets under a capital lease agreement, the asset should be recorded in the General Fund's fund basis financial statements:

Accepted Answer

A)  As a capital asset and lease obligation at the inception of the lease agreement at the lesser of the present value of the minimum lease payments or the fair market value of the property 
B)  as debt service expenditures when payments are made 
C)  As a capital asset and lease obligation at the inception of the lease agreement for the total lease payments 
D)  as an expense when payments are made

Question 19

When a governmental unit is primarily or secondarily liable for the debt, debt proceeds for special assessment obligations levied for the construction phase of a capital improvement project should be reported in which of the following fund types?

Accepted Answer

A)  Special Assessment fund. 
B)  Capital projects. 
C)  Agency. 
D)  Debt service.

Question 20

A government signed a five-year capital lease on January 1, 2017 to obtain some equipment. The lease provided that the government would make a down payment of $20,000 and four $20,000 payments each year after that, beginning January 1, 2016. The government has a fiscal year ending December 31. Upon inception of the lease, the government, in its governmental fund accounting records would:

Accepted Answer

A)  Debit expenditures for $20,000 and credit cash for $20,000. 
B)  Debit expenditures for $100,000, credit cash for $20,000, and credit accounts payable for $80,000. 
C)  Debit expenditures for the present value of the payments including the $20,000 down payment), credit cash for $20,000, and credit accounts payable for the difference between the $20,000 and the present value of the future payments. 
D)  Debit expenditures for the present value of the payments including the $20,000 down payment), credit cash for $20,000, and credit other financing sources for the difference between the $20,000 and the present value of the future payments.

Exam 9: Advanced Topics for State and Local Governments

Under governmental accounting principles for capital and operating ; expenditures are recorded each period for the amount of the annual lease payment for all , but the expenditures are classified differently for capital and operating .

Service type are typically accounted for in the General Fund.

A government offering a defined benefit pension plan determines it is necessary to alter actuarial assumptions increasing the estimated cost of pension benefits. How would the resulting increase in the net pension liability be recognized in the financial statements in the year the plan is changed?

Special-purpose governmental entities that are engaged in a single business activity are not required to prepare government-wide financial statements, but issue only enterprise fund statements.

How should the payments under a capital lease be accounted for in the governmental funds?

Assume a government is determined to be a special-purpose government engaged in business-type activities only. Which of the following financial statements would be required?

A special assessment tax is

Capital assets acquired through capital by the General Fund are reported in the General Fund Balance Sheet.

At the inception of a capital lease agreement for a piece of equipment used in governmental operations,

For financial reporting purposes, governmental health care entities, public school systems, other not-for-profit entities and public colleges and universities may be considered to be special-purpose entities.

Assume a government is a special-purpose entity engaged in fiduciary activities only. Which of the following financial statements would be required?

Which of the following is true for a city government participating in a state sponsored pension plan for its law enforcement employees.

List three examples types of general-purpose state or local governments and three special-purpose local governments.

What are the required parts of the annual financial report for special-purpose local governments engaged only in business-type activities?

A government sponsoring a defined benefit pension plan changes an assumption underlying the measurement of the net pension liability. Assuming the estimated of this liability increases, how will this be reflected in the government-wide statements?

A downtown shopping district desires additional police patrols and agrees to pay for the service through a special assessment property tax. Which fund should be used to account for the special assessment tax proceeds?

When a government acquires general fixed assets under a capital lease agreement, the asset should be recorded in the General Fund's fund basis financial statements:

When a governmental unit is primarily or secondarily liable for the debt, debt proceeds for special assessment obligations levied for the construction phase of a capital improvement project should be reported in which of the following fund types?