Question 1

Liabilities incurred, such as for accrued payroll, but still unpaid at year-end, should be recorded in the General Fund by a debit to which one of the following accounts?

Accepted Answer

A)  Encumbrances Control. 
B)  Expenditures Control. 
C)  Current Expense. 
D)  Appropriations Control

Question 2

The City of Smithville was awarded a federal grant on May 1, 2017 in the amount of $2,400,000 for the purpose of conducting a summer youth employment program. This was a reimbursement-type grant. On August 31, $5,475,000 of expenditures was recorded, and cash was paid out. On October 15 the $5,475,000 was received from the federal government. Record necessary entries as of July 1, August 31, September 30 and October 15.

Accepted Answer

The answer of The City of Smithville was awarded a...

Question 3

The journal entry to record the property tax levy for a municipality would include:

Accepted Answer

A)  A debit to Bad Debts Expense 
B)  A credit to Estimated Uncollectible Taxes 
C)  A credit to Taxes Receivable 
D)  A and B would both be included in the journal entry

Question 4

Which of the following statements is not true regarding modified accrual accounting?

Accepted Answer

A)  Expenditures and fund liabilities are recorded when goods and services are received. 
B)  Debt service expenditures for principal and interest are accrued. 
C)  Expenditures for claims and judgments and landfill post-closure care costs of governmental funds should be recognized to the extent that the liabilities are going to be paid with available resources. 
D)  Compensated absences and special termination benefits of governmental funds that will not be paid with available resources should be reported as liabilities in the government-wide statements.

Question 5

When the General Fund purchases water from an enterprise fund, the General Fund would credit expenditure.

Accepted Answer

A) True 
 B)False

Question 6

The City of Brownsville had a balance in the Budgetary Fund Balance -- Reserve for Encumbrances account at the end of 2016 in the amount of $90,000. During 2017, all purchase orders related to the $90,000 were filled, and the invoice amount was $91,200. Which of the following would be true regarding the Statement of Revenues, Expenditures, and Changes in Fund Balances for 2017? assume encumbrances do not lapse

Accepted Answer

A)  The amount shown for Expenditures would include only the $1,200. 
B)  The amount shown for Expenditures would include only the $90,000. 
C)  The amount shown for Expenditures would include the $91,200. 
D)  The amount shown for Expenditures would not include items related to orders placed in 2016.

Question 7

General Fund resources were expended in the amount of $185,000 to purchase a new fire truck. The General Fund would debit:

Accepted Answer

A)  Expenditures Control. 
B)  Capital assets -Motor Vehicles. 
C)  Both a and b above. 
D)  None of the above; no entry is made in the General Fund when a motor vehicle is purchased because only current financial resources are recorded in the General Fund.

Question 8

Expenditures recorded under modified accrual accounting is essentially the same as an expense recorded under accrual accounting.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is true regarding modified accrual accounting?

Accepted Answer

A)  Modified accrual accounting requires that all expenditures be recognized on the cash basis. 
B)  Revenues are recognized in the period in which they become available and measurable, and expenditures are recognized at the time a liability is incurred, except for principal and interest on long-term debt. 
C)  Modified accrual accounting is required for all fund financial statements. 
D)  All of the above.

Question 10

Generally, expenditures are recorded and fund liabilities are recognized when goods and services are received, regardless of whether resources are available in the fund.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is true with respect to Special revenue funds?

Accepted Answer

A)  Special revenue funds are used when it is desirable to provide separate reporting of resources that are restricted or committed as to expenditure for purposes other than debt service or capital projects. 
B)  Special revenue funds are used when it is desirable to provide separate reporting of resources that are designated for specific purposes. 
C)  Special revenue funds are used when it is desirable to provide separate reporting for funds provided by other governments to support capital projects. 
D)  Both B and C

Question 12

A special item is a significant transaction that is unusual or infrequent, but within the control of management.

Accepted Answer

A) True 
 B)False

Question 13

Interfund services provided and used are recognized directly as Revenues and Expenditures.

Accepted Answer

A) True 
 B)False

Question 14

Interfund services:

Accepted Answer

A)  Provided and used represent transactions involving sales and purchases of goods and services between funds. 
B)  Are sometimes called quasi-external transactions. 
C)  Are recorded as if they were transactions with parties outside the government. 
D)  All of the above apply to interfund services.

Question 15

Expenditures for claims and judgments of governmental funds should be recognized to the extent that the liabilities are going to be paid with available resources.

Accepted Answer

A) True 
 B)False

Question 16

What is the difference between reciprocal interfund activity and nonreciprocal interfund activity?

Accepted Answer

The answer of What is the difference between reciprocal interfund...

Question 17

Contrast the Consumption versus the Purchases methods of accounting for inventories.

Accepted Answer

The answer of Contrast the Consumption versus the Purchases methods...

Question 18

Which of the following General Fund accounts would be closed at year end?

Accepted Answer

A)  Due from State Government. 
B)  Special Items - Proceeds from Sale of Land. 
C)  Taxes Receivable - Delinquent. 
D)  Deferred Inflows - Property Taxes.

Question 19

Which of the following statements is true with respect to the use of budgetary accounts?

Accepted Answer

A)  Once the budget is set, it may not be changed. 
B)  GASB does not require governments to record budgets 
C)  Budgetary accounts are presented with actual results in the general purpose financial statements. 
D)  GASB requires budgetary accounts for the General Fund

Question 20

Which account would be debited when the City of Corfu issued purchase orders for materials and supplies?

Accepted Answer

A)  Encumbrances Control. 
B)  Budgetary Fund Balance -- Reserve for Encumbrance. 
C)  Expenditures. 
D)  Expenditures Control.

Exam 4: Accounting for the General and Special Revenue Funds

Liabilities incurred, such as for accrued payroll, but still unpaid at year-end, should be recorded in the General Fund by a debit to which one of the following accounts?

The journal entry to record the property tax levy for a municipality would include:

Which of the following statements is not true regarding modified accrual accounting?

When the General Fund purchases water from an enterprise fund, the General Fund would credit expenditure.

General Fund resources were expended in the amount of $185,000 to purchase a new fire truck. The General Fund would debit:

Expenditures recorded under modified accrual accounting is essentially the same as an expense recorded under accrual accounting.

Which of the following is true regarding modified accrual accounting?

Generally, expenditures are recorded and fund liabilities are recognized when goods and services are received, regardless of whether resources are available in the fund.

Which of the following is true with respect to Special revenue funds?

A special item is a significant transaction that is unusual or infrequent, but within the control of management.

Interfund services provided and used are recognized directly as Revenues and Expenditures.

Interfund services:

Expenditures for claims and judgments of governmental funds should be recognized to the extent that the liabilities are going to be paid with available resources.

What is the difference between reciprocal interfund activity and nonreciprocal interfund activity?

Contrast the Consumption versus the Purchases methods of accounting for inventories.

Which of the following General Fund accounts would be closed at year end?

Which of the following statements is true with respect to the use of budgetary accounts?

Which account would be debited when the City of Corfu issued purchase orders for materials and supplies?