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Question

2 out of 2 points
1

The following relate to the town of York Town Heights (dollar amounts in
thousands): All funds as identified for each transaction in (brackets) are correct?

$1,400 Equipment used in a vehicle repair service that provides services to other
Dept. (Asset in Internal Service Fund)

$6,300 Property taxes levied and collected (General Fund)

$1,200 Hotel taxes collected, restricted to to promotion of tourism (Special


Revenue Fund)

$4,000 Proceeds of bonds to build a parking garage repaid by user charges


(Enterprise Fund Asset)

$8,000 Fees charged to, and collected from customers by the electric utility
(Enterprise Fund Revenue)

$1,000 Proceeds of a federal grant to hire additional police officers (Special


Revenue Fund)

Selected Answers: T

Correct Answers: T

Question
0 out of 4 points
2
The schedule below reports the beginning balances and activity during the year in
a town's supplies fund. The government accounts for supplies on a purchases
basis. Fund Balance (unreserved 1/1) $400 Fund Balance (reserved for
encumbrance 1/1) $240 Fund Balance (reserved for inventory 1/1) $170 Total
fund balance, January 1 $810 Appropriations $3,400 Actual Revenues $3,200
Supplies ordered $3,160 Supplies received $3,360 Supplies paid-for $2,800
Supplies used $3,280 Reserve for Encumbrance is :

Selected Answer: $45


Correct Answer: $40
Question
1 out of 1 points
3
The Financial Accounting Standards Advisory Board's standards do not apply to
the federal Department of Treasury

Selected Answers: F

Correct Answers: F

Question
0 out of 3 points
4

Accounting guidance for revenues can be found under Fasb 33.

Selected Answer: T
Correct Answer: F
Question
3 out of 3 points
5
Governmental closing entries includes Debiting Appropriation and Crediting
Estimated Revenues and in certain situations credit Fund Balance.

Selected Answer: T
Correct Answer: T
Question
3 out of 3 points
6

The FASB is to GASB

Selected Answer: A brother is to a sister


Correct Answer: A brother is to a sister
Question
3 out of 3 points
7
The schedule below reports the beginning balances and activity during the year in
a town's supplies fund. The government accounts for supplies on a purchases
basis. Fund Balance (unreserved 1/1) $400 Fund Balance (reserved for
encumbrance 1/1) $240 Fund Balance (reserved for inventory 1/1) $170 Total
fund balance, January 1 $810 Appropriations $3,400 Actual Revenues $3,200
Supplies ordered $3,160 Supplies received $3,360 Supplies paid-for $2,800
Supplies used $3,280 Expenditure under the consumption method for the period
is:
Selected Answer: $3,280
Correct Answer: $3,280
Question
0 out of 3 points
8

The goverment-wide statement is done at year-end

Selected Answer: A mixture of cash and Full accrual


Correct Answer: Full accrual basis
Question
0 out of 3 points
9
Central City was awarded two state grants during its fiscal year ending
September 30, 2008: a $2 million block grant that can be used to cover any
operating expenses incurred during fiscal 2009, and a $1 million grant that can be
used any time to acquire equipment for its police department. For the year
ending, September 30, 2008, Central City should recognize in grant revenue in its
funds statements (in millions)

Selected Answer: 2
Correct Answer: 1
Question
0 out of 1 points
10
Unused sick LEAVE should be accrued only insofar as employers expect to
compensate employees for the leave as a termination benefit. In this case, the
leave only accumulates: it does not vest. Thus, the city will not have to
compensate employees for leave not taken as a termination benefit. It should
charge as an expenditure only the amount that was liquidated with expendable
financial resources. It need not report a liability even on the government-wide
statement of net assets. (Government Fund, e.g., Dr. Sick Leave Exp and Cr.
Cash)

Selected Answer: F
Correct Answer: T
Question
1 out of 1 points
11

Inventories on the purchase method should report as an expenditure only the


supplies actually acquired. However, it should give balance sheet recognition to
material amounts of inventory on hand at year-end and should establish reserves
for both encumbrances and invetories on hand.

Capital Assets should be recognized as expenditures as acquired. The proceeds


of noncurrent debt issued to finance them should be reported as " other
financing sources". Interest and principal on long-term debt need not be
recognized as expenditures until they are due.

Selected Answer: Both statements are correct


Correct Answer: Both statements are correct
Question
0 out of 3 points
12

The city of Alpine incurred the following costs during the year in its property
tax collection department: (Salaries $400k, Purchase of computer equipment
$10k, Purchase of power $40k and Supplies $5k)

As a consequence of these transactions, the amount that Alpine should report as


expenditures its fund is

Selected Answer: $460,000


Correct Answer: $455,000
Question
0 out of 2 points
13
A government repaves a section of highway every four years at a cost $4m to
preserve it at a specific condition level. How much should it report in
depreciation charges under the modified approach to accounting for
infrastructure and the standard approach. Asset Valued $3.2m.

Selected Answer: None of the above


Correct Answer: Modified =0 and Accrual $800k
Question
1 out of 1 points
14
Both governments and not-for-profit entities do not have ownership interest as
in for-profit entities?
Selected Answer: T
Correct Answer: T
Question
0 out of 3 points
15

Proprietary accounting is similar to private business as a result the accounting is


the same as private accounting.

Selected Answer:

None of the above

Correct Answer:

T since the accounting guidance is under FASB and GASB.

Question
3 out of 3 points
16
The school district adopts a budget calling for total revenues of $400 million
and total expenditures of $390 million. After recording the estimated revenues
and appropriations, the impact to the fund balance will be:

Selected Answer: A net credit of $10m


Correct Answer: A net credit of $10m
Question
0 out of 3 points
17

Governemtal funds can be categorized into three group (Governmental,


Proprietary and Fiduciary). Enterprise Fund is part of Governmental

Selected Answer: T
Correct Answer:

Question
0 out of 2 points
18
On January 1, the township defeased in substance $400k of bonds that had been
issued years earlier to construct the bridge. The bonds had been issued at par. To
effect the transaction the township issued $405k of new bonds, at par, and
placed the proceeds in a trust. The old bonds have a coupon rate of 5 percent,
the new bonds have a coupon rate of 4 percent. What amount should Luling
report in its December 31, 2008 financial statements as: Bond proceeds in its
capital project fund.

Selected Answer: $405k


Correct Answer: $400
Question
0 out of 3 points
19
The primary objective of a not-for-profit organization or a government is to

Selected Answer: None of the above


Correct Answer: Provide Services to Constituents
Question
0 out of 2 points
20

The budgeted and actual revenues and expenditures of Meadow Twonship for a
recent year (in millions) were as presented in the schedule that follows:

1. Prepare the Journal Entry to record the budget and net change in the Fund
Balance

Bud Actual

Revenues $11.2 $11.5

Expenditures $10.6 $10.3

Selected
Answer:
Revenues $11.5, Credit Appropriations $10.3, Fund Balance
$1.2 & (net change = $0.6)

Correct
Answer:
Estimated Revenues $11.2, Credit Appropriations $10.6, Fund
Balance $0.6 & (net change = $1.2)

Question
0 out of 5 points
21

Review the following transactions and compute

1. value of bonds in the government-wide statement at year end,

2. the total license fees to recorded in the 2007 fund statement,

3.Contributions revenue recognized in the 2007 Fund Statement

4.Contributions revenue recognized in the 2007 Government-wide

5. amount of investment income that the city should recognize in its debt service
fund and

6.increase in the net assets for government-wide statements owning to sales of


fire engine.

1/1/2007, the city purchase as a ninvestment for its debt service fund a fifteen-
year, 6% $1 million bond for $998k. During the year it received $30k in interest.
At year-end the market value of the bond was $999,500.

12/31/ 2006, the Foundation for the Arts pledged to donate $1, up to a max of $1
million, for each $3 that the museum is able to collect from other private
contributions. The funds are to finance construction of the city-owned art
museum. During 2007, the city collected $900k and received the matching
matching money from the Foundation. In January and February 2008 it
collected an additional $2,400,000 and also received the matching money.

20007 During the year the city imposed license fees on street vendors. All
vendors were required to purchase the licenses by 9/30/07. The licenses cover
the one-year period from 10/01/07 through 9/30/08. During 2007 the city
collected $240k in license fees

2007 The city sold a fire truck for $40k that it had acquired five years earlier for
$250k. At the time of sale the city had charged $225k in depreciation

2007 The city received a grant of $2 million to partially reimburse costs of


training police officers. During the year the city incurred $1.5 million of
allowable costs and received $1.2 million. It expects to incur an additiional $50k
in allowable costs in January 2008 and to be reimbursed for all allowable costs
by the end of February 2008.

Selected Answer: [None Given]


Correct Answer: 123456
Question
0 out of 3 points
22
To close the budgetary accounts assuming appropriation/expenditure were
$390m and estimated revenues/revenues were $400m, the closing entries
includes

Selected A credit to the Fund Balance & Appropriation, and debit to


Answer: revenues. Debit to revenues and a credit to Fund Balance and
Expenditure.
Correct A debit to the Fund Balance & Appropriation, and credit to
Answer: estimated revenues. Debit to revenues and a credit to Fund
Balance and Expenditure.
Question
0 out of 4 points
23

The main types of transactions accounted for in Capital Projects Funds are
Authorizing the Project and Recording the budget, Issuing the Bonds to finance
the Project, Transferring the Premium to the Debt Service Fund if exists,
Encumbering Available Resources, Recording Grants, Recording Expenditures,
Recognizing Investment Earnings on temporarily available cash and closing
entries if the government needs to prepare statement that shows revenues and
expenditure for a particular year ( if the budget was for the entire project, not for
a particular year, the accounts can remain open until the completion of the
project.). Given the aforementioned facts, identify the type of transactions
represented by the journal entries below.

1. Dr. Cash, Issued Costs Cr. Other financing Sources-Bond


Proceeds Premium, Other financing sources-FV and

2. Dr. Estimated bond Proceeds, Estimated Revenues, Cr. Fund Balance.

Selected Answer: 1,2


Correct Answer: ANSWER:
Question
0 out of 1 points
24
The city invests $15m in US Treasury notes so as to earn a return on temporarily
available cash. As of year-end, it has earned $0.150m in interest, but it does not
expect to actually receive the interest until the notes mature. You should debit
the Marketable securities and credit Investment revenue to observed chapter 4
GASB pronouncements that require that appreciation in the fair value of
investments be recognized as revenue.

Selected Answer: F
Correct Answer: T
Question
0 out of 1 points
25

The name of the Governmental statement of Operations is Statement of


revenues, expenses and changes in Fund Balance.

Selected Answer: None of the above


Correct Answer: F
Question
0 out of 1 points
26
If a city receives and pays contractors invoices for $15m for construction and
related services, you will debit Expenditure-construction related for $15m and
credit cash for the same.

Selected Answer: F
Correct Answer: T
Question
3 out of 3 points
27

Generally revenue transactions can be classified under exchanged (value) and


non-exchanged transactions (non-value). Select the correct statement about non-
exchange transaction.

Selected Answer: There are four types


Correct Answer: There are four types
Question
0 out of 3 points
28
The general fund under Govermental accounting is also referred to as

Selected Answer: The "plug fund"


Correct Answer: All of the above
Question
0 out of 3 points
29
Under the revenue recognition principle of governmental accounting: available
means

Selected Answer: Cash is available in reasonable time


Correct Answer: Cash or cash equivalent is available within the period
Question
0 out of 3 points
30
The schedule below reports the beginning balances and activity during the year
in a town's supplies fund. The government accounts for supplies on a purchases
basis. Fund Balance (unreserved 1/1) $400 Fund Balance (reserved for
encumbrance 1/1) $240 Fund Balance (reserved for inventory 1/1) $170 Total
fund balance, January 1 $810 Appropriations $3,400 Actual Revenues $3,200
Supplies ordered $3,160 Supplies received $3,360 Supplies paid-for $2,800
Supplies used $3,280 Reserve for Inventory:

Selected Answer: $80


Correct Answer: $250
Question
0 out of 1 points
31
Sugar City issued $2 million of bonds to fund the construction of a new city
office building. The bonds have a stated rate of interest of 5% and were sold at
101. Which of the following entries should be made in the Capital Projects Fund
to record this event?

Selected Debit Cash $2.02 million; Credit Other Financing Sources


Answer: $2 million and Revenue $.02 million.
Correct Debit Cash $2.02 million; Credit Other Financing Sources
Answer: $2.02 million.
Question
0 out of 3 points
32

To journalize the governmental budget, you must Dr. Estimated Revenues and
always credit Apropriation + Fund Balance.

Selected Answer: Both is correct


Correct Answer: F
Question
0 out of 3 points
33

One different between business and governement is

Selected Goverment follows only GASBs


Answer:
Correct Business focus on "bottom line" while government focus
Answer: on "budgets".
Question
3 out of 3 points
34
A government places an order for a particular item of equipment and encumbers
$5,500. The item arrives accompanied by an invoice for $5,200. The entries that
the government should make should include (but not necessarily be limited to):

Selected A debit to expenditures for $5,200, a credit to encumbrances


Answer: for $5,500, and a credit to accounts payable for $5,200.
Correct A debit to expenditures for $5,200, a credit to encumbrances
Answer: for $5,500, and a credit to accounts payable for $5,200.
Question
0 out of 1 points
35
Revenues Under GASB can be recognized when it is

Selected
Answer:
Performance substantially completed, earned and
Collectible

Correct Answer: Available and Measurable


Question
0 out of 3 points
36
Rule 203 of the AICPA's code of Professional Conduct pertain to
Selected Answer:

Standards of competency

Correct Answer: Authorities designated to establish accounting standards


Question
0 out of 1 points
37
A primary characteristic that distinguishes not-for-profit entities from business
entities is the importance of the budget in the governing process. Which of the
following characteristics distinguishes a governmental or not-for-profit entity
from a business entity?

Selected Revenues are always indicative of demand for goods and


Answer: services.
Correct The mission of the entity will determine the goods or
Answer: services provided.
Question
0 out of 3 points
38
The schedule below reports the beginning balances and activity during the year
in a town's supplies fund. The government accounts for supplies on a purchases
basis. Fund Balance (unreserved 1/1) $400 Fund Balance (reserved for
encumbrance 1/1) $240 Fund Balance (reserved for inventory 1/1) $170 Total
fund balance, January 1 $810 Appropriations $3,400 Actual Revenues $3,200
Supplies ordered $3,160 Supplies received $3,360 Supplies paid-for $2,800
Supplies used $3,280 Expenditure for the period is:

Selected Answer: $3,280


Correct Answer: $3,360
Question
1 out of 1 points
39
Full Accrual basis of accounting captures

Selected Answer: All economic resources


Correct Answer: All economic resources
Question
1 out of 1 points
40
Governmental fund liabilities are considered current only when they must be liquidated
with expendable available financial resources not, as in businesses and in the
government-wide statements, when they must be paid within a year.
Selected Answer: T
Correct Answer: T
Question
3 out of 3 points
41
Culver City recognizes as revenues/expenditures those amounts collected/paid
during the year or within 60 days of fiscal year-end. The City offers a
pension benefit to its employees who meet certain age and years of
employment criteria. The City participates in the State Pension Plan. The
City s actuarially determined contribution requirement to the State Pension
Plan for the fiscal year ended 6/30/07 is $4 million. Due to cash inflow
shortages the City, which budgeted $4 million for pension payments, paid
only $3 million in the fiscal year ended 6/30/07. The City paid the
remaining amount on September 30, 2007. Assuming the City maintains its
books and records in a manner that facilitates the preparation of its fund
financial statements, what is the appropriate entry to record the pension
payments and recognize any associated liability?

Selected Answer:

d) Debit Expenditures $3 million; Credit Cash $3 million.

Correct Answer:

d) Debit Expenditures $3 million; Credit Cash $3 million.

Question
1 out of 1 points
42
Vacation LEAVE should be accrued as a liability as long as employees have
earned the time off and the employer is expected to compensate employees for it
in the future. However, only the portion of the liability expected to be liquidated
with expendable available financial resources should be reported as a
governmental fund obligation. The balance should be reported as a liability on
the government-wide statement of net assets (e.g. Dr. Vacation pay Expenditure
and Cr. Cash - Government Fund).

Selected Answer: T
Correct Answer: T
Question
2 out of 2 points
43
Sue City has outstanding $5 million in general obligation term bonds used to
finance the construction of the new City Library. Sue City has a June 30 fiscal
year-end. Interest at 6% is payable each January 1 and July 1. The principal of
the bonds is due 10 years in the future. The City budgeted the July 1, 2006
interest payment in the budget for the fiscal year ended June 30, 2006. On June
30, cash was transferred from the General Fund to the Debt Service Fund to
make the required payment. The maximum amount of interest payable that may
be included on the balance sheet of the debt service fund of Sue City at June 30
would be

Selected Answer: 150k


Correct Answer: 150k

Question
3 out of 3 points
1

The general fund under Govermental accounting is also referred to as

Selected Answer: All of the above


Correct Answer: All of the above
Question
0 out of 3 points
2
The school district adopts a budget calling for total revenues of $400 million and
total expenditures of $390 million. After recording the estimated revenues and
appropriations, the impact to the fund balance will be:

Selected Answer: [None Given]


Correct Answer: A net credit of $10m
Question
3 out of 3 points
3
Rule 203 of the AICPA's code of Professional Conduct pertain to

Selected Answer: Authorities designated to establish accounting standards


Correct Answer: Authorities designated to establish accounting standards
Question 3 out of 3 points
4
The schedule below reports the beginning balances and activity during the year in
a town's supplies fund. The government accounts for supplies on a purchases
basis. Fund Balance (unreserved 1/1) $400 Fund Balance (reserved for
encumbrance 1/1) $240 Fund Balance (reserved for inventory 1/1) $170 Total
fund balance, January 1 $810 Appropriations $3,400 Actual Revenues $3,200
Supplies ordered $3,160 Supplies received $3,360 Supplies paid-for $2,800
Supplies used $3,280 Expenditure under the consumption method for the period
is:

Selected Answer: $3,280


Correct Answer: $3,280
Question
1 out of 1 points
5
Governmental fund liabilities are considered current only when they must be liquidated
with expendable available financial resources not, as in businesses and in the
government-wide statements, when they must be paid within a year.

Selected Answer: T
Correct Answer: T
Question
3 out of 3 points
6
A government places an order for a particular item of equipment and encumbers
$5,500. The item arrives accompanied by an invoice for $5,200. The entries that
the government should make should include (but not necessarily be limited to):

Selected A debit to expenditures for $5,200, a credit to encumbrances


Answer: for $5,500, and a credit to accounts payable for $5,200.
Correct A debit to expenditures for $5,200, a credit to encumbrances
Answer: for $5,500, and a credit to accounts payable for $5,200.
Question
3 out of 3 points
7

Accounting guidance for revenues can be found under Fasb 33.

Selected Answer: F
Correct Answer: F
Question
0 out of 1 points
8
Vacation LEAVE should be accrued as a liability as long as employees have
earned the time off and the employer is expected to compensate employees for it
in the future. However, only the portion of the liability expected to be liquidated
with expendable available financial resources should be reported as a
governmental fund obligation. The balance should be reported as a liability on the
government-wide statement of net assets (e.g. Dr. Vacation pay Expenditure and
Cr. Cash - Government Fund).

Selected Answer: [None Given]


Correct Answer: T
Question
3 out of 3 points
9
Governmental closing entries includes Debiting Appropriation and Crediting
Estimated Revenues and in certain situations credit Fund Balance.

Selected Answer: T
Correct Answer: T
Question
0 out of 2 points
10

The following relate to the town of York Town Heights (dollar amounts in
thousands): All funds as identified for each transaction in (brackets) are correct?

$1,400 Equipment used in a vehicle repair service that provides services to other
Dept. (Asset in Internal Service Fund)

$6,300 Property taxes levied and collected (General Fund)

$1,200 Hotel taxes collected, restricted to to promotion of tourism (Special


Revenue Fund)

$4,000 Proceeds of bonds to build a parking garage repaid by user charges


(Enterprise Fund Asset)

$8,000 Fees charged to, and collected from customers by the electric utility
(Enterprise Fund Revenue)

$1,000 Proceeds of a federal grant to hire additional police officers (Special


Revenue Fund)

Selected Answers: [None Given]


Correct Answers: T

Question
3 out of 3 points
11
Culver City recognizes as revenues/expenditures those amounts collected/paid
during the year or within 60 days of fiscal year-end. The City offers a
pension benefit to its employees who meet certain age and years of
employment criteria. The City participates in the State Pension Plan. The
City s actuarially determined contribution requirement to the State Pension
Plan for the fiscal year ended 6/30/07 is $4 million. Due to cash inflow
shortages the City, which budgeted $4 million for pension payments, paid
only $3 million in the fiscal year ended 6/30/07. The City paid the
remaining amount on September 30, 2007. Assuming the City maintains its
books and records in a manner that facilitates the preparation of its fund
financial statements, what is the appropriate entry to record the pension
payments and recognize any associated liability?

Selected Answer:

d) Debit Expenditures $3 million; Credit Cash $3 million.

Correct Answer:

d) Debit Expenditures $3 million; Credit Cash $3 million.

Question
3 out of 3 points
12

Generally revenue transactions can be classified under exchanged (value) and


non-exchanged transactions (non-value). Select the correct statement about non-
exchange transaction.

Selected Answer: There are four types


Correct Answer: There are four types
Question
1 out of 1 points
13
Sugar City issued $2 million of bonds to fund the construction of a new city
office building. The bonds have a stated rate of interest of 5% and were sold at
101. Which of the following entries should be made in the Capital Projects Fund
to record this event?

Selected Debit Cash $2.02 million; Credit Other Financing Sources


Answer: $2.02 million.
Correct Debit Cash $2.02 million; Credit Other Financing Sources
Answer: $2.02 million.
Question
0 out of 1 points
14

Inventories on the purchase method should report as an expenditure only the


supplies actually acquired. However, it should give balance sheet recognition to
material amounts of inventory on hand at year-end and should establish reserves
for both encumbrances and invetories on hand.

Capital Assets should be recognized as expenditures as acquired. The proceeds


of noncurrent debt issued to finance them should be reported as " other
financing sources". Interest and principal on long-term debt need not be
recognized as expenditures until they are due.

Selected Answer: [None Given]


Correct Answer: Both statements are correct
Question
0 out of 1 points
15
Unused sick LEAVE should be accrued only insofar as employers expect to
compensate employees for the leave as a termination benefit. In this case, the
leave only accumulates: it does not vest. Thus, the city will not have to
compensate employees for leave not taken as a termination benefit. It should
charge as an expenditure only the amount that was liquidated with expendable
financial resources. It need not report a liability even on the government-wide
statement of net assets. (Government Fund, e.g., Dr. Sick Leave Exp and Cr.
Cash)

Selected Answer: [None Given]


Correct Answer: T
Question
0 out of 1 points
16
If a city receives and pays contractors invoices for $15m for construction and
related services, you will debit Expenditure-construction related for $15m and
credit cash for the same.

Selected Answer: F
Correct Answer: T
Question
1 out of 1 points
17
Both governments and not-for-profit entities do not have ownership interest as
in for-profit entities?

Selected Answer: T
Correct Answer: T
Question
3 out of 3 points
18
The schedule below reports the beginning balances and activity during the year
in a town's supplies fund. The government accounts for supplies on a purchases
basis. Fund Balance (unreserved 1/1) $400 Fund Balance (reserved for
encumbrance 1/1) $240 Fund Balance (reserved for inventory 1/1) $170 Total
fund balance, January 1 $810 Appropriations $3,400 Actual Revenues $3,200
Supplies ordered $3,160 Supplies received $3,360 Supplies paid-for $2,800
Supplies used $3,280 Reserve for Inventory:

Selected Answer: $250


Correct Answer: $250
Question
3 out of 3 points
19
Under the revenue recognition principle of governmental accounting: available
means

Selected Answer: Cash or cash equivalent is available within the period


Correct Answer: Cash or cash equivalent is available within the period
Question
3 out of 3 points
20

To journalize the governmental budget, you must Dr. Estimated Revenues and
always credit Apropriation + Fund Balance.
Selected Answer: F
Correct Answer: F
Question
0 out of 1 points
21
The city invests $15m in US Treasury notes so as to earn a return on temporarily
available cash. As of year-end, it has earned $0.150m in interest, but it does not
expect to actually receive the interest until the notes mature. You should debit
the Marketable securities and credit Investment revenue to observed chapter 4
GASB pronouncements that require that appreciation in the fair value of
investments be recognized as revenue.

Selected Answer: F
Correct Answer: T
Question
3 out of 3 points
22
To close the budgetary accounts assuming appropriation/expenditure were
$390m and estimated revenues/revenues were $400m, the closing entries
includes

Selected A debit to the Fund Balance & Appropriation, and credit to


Answer: estimated revenues. Debit to revenues and a credit to Fund
Balance and Expenditure.
Correct A debit to the Fund Balance & Appropriation, and credit to
Answer: estimated revenues. Debit to revenues and a credit to Fund
Balance and Expenditure.
Question
3 out of 3 points
23

The goverment-wide statement is done at year-end

Selected Answer: Full accrual basis


Correct Answer: Full accrual basis
Question
3 out of 3 points
24

One different between business and governement is


Selected Business focus on "bottom line" while government focus
Answer: on "budgets".
Correct Business focus on "bottom line" while government focus
Answer: on "budgets".
Question
2 out of 2 points
25

The budgeted and actual revenues and expenditures of Meadow Twonship for a
recent year (in millions) were as presented in the schedule that follows:

1. Prepare the Journal Entry to record the budget and net change in the Fund
Balance

Bud Actual

Revenues $11.2 $11.5

Expenditures $10.6 $10.3

Selected
Answer:
Estimated Revenues $11.2, Credit Appropriations $10.6, Fund
Balance $0.6 & (net change = $1.2)

Correct
Answer:
Estimated Revenues $11.2, Credit Appropriations $10.6, Fund
Balance $0.6 & (net change = $1.2)

Question
3 out of 3 points
26
Central City was awarded two state grants during its fiscal year ending
September 30, 2008: a $2 million block grant that can be used to cover any
operating expenses incurred during fiscal 2009, and a $1 million grant that can
be used any time to acquire equipment for its police department. For the year
ending, September 30, 2008, Central City should recognize in grant revenue in
its funds statements (in millions)

Selected Answer: 1
Correct Answer: 1
Question
3 out of 3 points
27
The primary objective of a not-for-profit organization or a government is to

Selected Answer: Provide Services to Constituents


Correct Answer: Provide Services to Constituents
Question
3 out of 3 points
28

Governemtal funds can be categorized into three group (Governmental,


Proprietary and Fiduciary). Enterprise Fund is part of Governmental

Selected Answer:

Correct Answer:

Question
1 out of 1 points
29
Revenues Under GASB can be recognized when it is

Selected Answer: Available and Measurable


Correct Answer: Available and Measurable
Question
4 out of 4 points
30

The main types of transactions accounted for in Capital Projects Funds are
Authorizing the Project and Recording the budget, Issuing the Bonds to finance
the Project, Transferring the Premium to the Debt Service Fund if exists,
Encumbering Available Resources, Recording Grants, Recording Expenditures,
Recognizing Investment Earnings on temporarily available cash and closing
entries if the government needs to prepare statement that shows revenues and
expenditure for a particular year ( if the budget was for the entire project, not for
a particular year, the accounts can remain open until the completion of the
project.). Given the aforementioned facts, identify the type of transactions
represented by the journal entries below.

1. Dr. Cash, Issued Costs Cr. Other financing Sources-Bond


Proceeds Premium, Other financing sources-FV and

2. Dr. Estimated bond Proceeds, Estimated Revenues, Cr. Fund Balance.

Selected Answer: ANSWER:


Correct Answer: ANSWER:
Question
1 out of 1 points
31

The name of the Governmental statement of Operations is Statement of


revenues, expenses and changes in Fund Balance.

Selected Answer: F
Correct Answer: F
Question
1 out of 1 points
32
Full Accrual basis of accounting captures

Selected Answer: All economic resources


Correct Answer: All economic resources
Question
4 out of 4 points
33
The schedule below reports the beginning balances and activity during the year
in a town's supplies fund. The government accounts for supplies on a purchases
basis. Fund Balance (unreserved 1/1) $400 Fund Balance (reserved for
encumbrance 1/1) $240 Fund Balance (reserved for inventory 1/1) $170 Total
fund balance, January 1 $810 Appropriations $3,400 Actual Revenues $3,200
Supplies ordered $3,160 Supplies received $3,360 Supplies paid-for $2,800
Supplies used $3,280 Reserve for Encumbrance is :

Selected Answer: $40


Correct Answer: $40
Question
3 out of 3 points
34
The schedule below reports the beginning balances and activity during the year
in a town's supplies fund. The government accounts for supplies on a purchases
basis. Fund Balance (unreserved 1/1) $400 Fund Balance (reserved for
encumbrance 1/1) $240 Fund Balance (reserved for inventory 1/1) $170 Total
fund balance, January 1 $810 Appropriations $3,400 Actual Revenues $3,200
Supplies ordered $3,160 Supplies received $3,360 Supplies paid-for $2,800
Supplies used $3,280 Expenditure for the period is:

Selected Answer: $3,360


Correct Answer: $3,360
Question
3 out of 3 points
35

The FASB is to GASB

Selected Answer: A brother is to a sister


Correct Answer: A brother is to a sister
Question
2 out of 2 points
36
A government repaves a section of highway every four years at a cost $4m to
preserve it at a specific condition level. How much should it report in
depreciation charges under the modified approach to accounting for
infrastructure and the standard approach. Asset Valued $3.2m.

Selected Answer: Modified =0 and Accrual $800k


Correct Answer: Modified =0 and Accrual $800k
Question
2 out of 2 points
37
On January 1, the township defeased in substance $400k of bonds that had been
issued years earlier to construct the bridge. The bonds had been issued at par. To
effect the transaction the township issued $405k of new bonds, at par, and
placed the proceeds in a trust. The old bonds have a coupon rate of 5 percent,
the new bonds have a coupon rate of 4 percent. What amount should Luling
report in its December 31, 2008 financial statements as: Bond proceeds in its
capital project fund.

Selected Answer: $400


Correct Answer: $400
Question
1 out of 1 points
38
The Financial Accounting Standards Advisory Board's standards do not apply to
the federal Department of Treasury

Selected Answers: F

Correct Answers: F

Question
0 out of 5 points
39

Review the following transactions and compute

1. value of bonds in the government-wide statement at year end,

2. the total license fees to recorded in the 2007 fund statement,

3.Contributions revenue recognized in the 2007 Fund Statement

4.Contributions revenue recognized in the 2007 Government-wide

5. amount of investment income that the city should recognize in its debt service
fund and

6.increase in the net assets for government-wide statements owning to sales of


fire engine.

1/1/2007, the city purchase as a ninvestment for its debt service fund a fifteen-
year, 6% $1 million bond for $998k. During the year it received $30k in interest.
At year-end the market value of the bond was $999,500.

12/31/ 2006, the Foundation for the Arts pledged to donate $1, up to a max of $1
million, for each $3 that the museum is able to collect from other private
contributions. The funds are to finance construction of the city-owned art
museum. During 2007, the city collected $900k and received the matching
matching money from the Foundation. In January and February 2008 it
collected an additional $2,400,000 and also received the matching money.

20007 During the year the city imposed license fees on street vendors. All
vendors were required to purchase the licenses by 9/30/07. The licenses cover
the one-year period from 10/01/07 through 9/30/08. During 2007 the city
collected $240k in license fees

2007 The city sold a fire truck for $40k that it had acquired five years earlier for
$250k. At the time of sale the city had charged $225k in depreciation

2007 The city received a grant of $2 million to partially reimburse costs of


training police officers. During the year the city incurred $1.5 million of
allowable costs and received $1.2 million. It expects to incur an additiional $50k
in allowable costs in January 2008 and to be reimbursed for all allowable costs
by the end of February 2008.

Selected Answer: 123456


Correct Answer: 123456
Question
3 out of 3 points
40

The city of Alpine incurred the following costs during the year in its property
tax collection department: (Salaries $400k, Purchase of computer equipment
$10k, Purchase of power $40k and Supplies $5k)

As a consequence of these transactions, the amount that Alpine should report as


expenditures its fund is

Selected Answer: $455,000


Correct Answer: $455,000
Question
2 out of 2 points
41
Sue City has outstanding $5 million in general obligation term bonds used to
finance the construction of the new City Library. Sue City has a June 30 fiscal
year-end. Interest at 6% is payable each January 1 and July 1. The principal of
the bonds is due 10 years in the future. The City budgeted the July 1, 2006
interest payment in the budget for the fiscal year ended June 30, 2006. On June
30, cash was transferred from the General Fund to the Debt Service Fund to
make the required payment. The maximum amount of interest payable that may
be included on the balance sheet of the debt service fund of Sue City at June 30
would be

Selected Answer: 150k


Correct Answer: 150k
Question
1 out of 1 points
42
A primary characteristic that distinguishes not-for-profit entities from business
entities is the importance of the budget in the governing process. Which of the
following characteristics distinguishes a governmental or not-for-profit entity
from a business entity?

Selected The mission of the entity will determine the goods or


Answer: services provided.
Correct The mission of the entity will determine the goods or
Answer: services provided.
Question
3 out of 3 points
43

Proprietary accounting is similar to private business as a result the accounting is


the same as private accounting.

Selected Answer:

T since the accounting guidance is under FASB and GASB.

Correct Answer:

T since the accounting guidance is under FASB and GASB.