Ch 2

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MC

c

What is the primary reason that governmental entities use fund accounting?
a) Fund accounting is required by law.
b) Fund accounting is required by GAAP.
c) Fund accounting promotes control and accountability over restricted resources.
d) Fund accounting promotes better control over operating activities.

a

Basis of accounting determines which of the following?
a) When transactions and events are recognized.
b) What transactions and events will be reported.
c) Where transactions and events will be reported.
d) Why transactions and events will be reported

b

3. A fund is
a) A separate legal entity.
b) A separate fiscal and accounting entity.
c) A separate self-balancing set of accounts for inventory purposes.
d) None of the above.

b

4. Which of the following funds is a fiduciary fund?
a) Permanent fund.
b) Agency fund.
c) Capital project fund.
d) Debt service fund.

c

When a governmental entity adopts a basis of accounting other than full accrual and a measurement focus that excludes long-lived assets and liabilities in its governmental fund types:
a) It is in violation of the law.
b) It is in violation of GAAP.
c) It has reported in accordance with GAAP standards for the governmental fund financial statements required by the new GASB reporting model.
d) It has the ability to better measure the results of operations.

c

A city receives a donation from a citizen who specifies that the principal must be invested and the earnings must be used to support operations of a city-owned recreational facility. The principal of this gift should be accounted for in which of the following funds?
a) Trust fund.
b) Special revenue fund.
c) Permanent fund.
d) Internal service fund.

b

Which of the following is NOT a governmental fund?
a) City Hall Debt Service Fund.
b) City Utilities Enterprise Fund.
c) Gasoline Tax Special Revenue Fund.
d) City Hall Capital Project Fund

d

8. Which of the following accounts would you least expect to see in a debt service fund?
a) Principal payments.
b) Interest charges.
c) Interest earned.
d) Outstanding balance of the debt being serviced.

a

Which of the following funds is a proprietary fund?
a) Internal service fund.
b) Special revenue fund.
c) Capital project fund.
d) Permanent fund

b

Which of the following funds is a governmental fund?
a) Enterprise fund.
b) Debt service fund.
c) Internal service fund.
d) Agency fund

b

Which of the following activities conducted by a city-owned junior college should be accounted for in an agency fund?
a) Receipt of tuition payments.
b) Receipt of revenues belonging to the student accounting club.
c) Receipt of state monies appropriated for general operations.
d) Receipt of donations in support of the university's athletic program.

a

Which of the following transactions should the City of Highland account for in a trust fund?
a) General fund contributions received by the City pension plan.
b) Greens fees received from golfers at the City-owned golf course.
c) Grants received from the Federal government to purchase buses to be used for public transit.
d) Proceeds of bonds issued to construct a new city hall building.

b

The state collects a gasoline tax that must be used to support highway construction and maintenance. The gasoline tax revenue should be accounted for in which of the following funds?
a) General fund.
b) Special revenue fund.
c) Debt service fund.
d) Internal service fund

d

The City of San Jose built a new city hall and financed construction by issuing bonds due in installments over the next 30 years. The bond principal and interest will be paid by a special tax levied on property in the City. The revenue received from this special tax should be accounted for in which of the following funds?
a) General fund.
b) Internal service fund.
c) Capital project fund.
d) Debt service fund.

b

Riverside Golf Course is a City-owned golf course that collects greens fees in amounts sufficient to cover its expenses. Riverside Golf Course should be accounted for in which of the following funds?
a) Internal service fund.
b) Enterprise fund.
c) General fund.
d) Special revenue fund.

a

To fulfill the printing needs of its various departments and agencies, the City has established a Central Print Shop, which bills the various departments and agencies of the city for printing services rendered. The Central Print Shop should be accounted for in which of the following funds.
a) Internal service fund.
b) Enterprise fund.
c) General fund.
d) Special revenue fund.

d

Which of the following sections is NOT required in the Comprehensive Annual Financial Report of a City?
a) Financial section.
b) Introductory section.
c) Statistical section.
d) Historical section

c

The Basic Financial Statements of a city do not include which of the following?
a) Government-wide Statement of Net Assets.
b) Government-wide Statement of Activities.
c) Government-wide Statement of Cash Flows.
d) Separate balance sheets for governmental and proprietary funds

a

Which of the following funds is accounted for on the modified accrual basis of accounting?
a) General fund.
b) Internal service fund.
c) Proprietary fund.
d) Pension trust fund.

b

Which of the following assets would NOT be found in the fund balance sheet of the General Fund of the City of Harrison?
a) Cash.
b) Capital assets.
c) Due from Special Revenue Fund.
d) Due from State.

d

Which of the following liabilities would NOT be found in the fund balance sheet of the General Fund of the City of Marmaduke?
a) Accounts payable.
b) Due to Special Revenue Fund.
c) Deferred revenue.
d) Bonds payable, due in 5 years

b

For which of the following entities is fund accounting mandated?
a) American Hospital Association.
b) City of New York.
c) Grace Lutheran Church.
d) United Way

d

The focus of the Statement of Activities of the City of West Hills is on which of the following?
a) Determining the total expenses by natural classification.
b) Determining the total expenses by function.
c) Determining the total revenues by function.
d) Determining the net cost of functions.

b

Which of the following statements is NOT required in the financial reports of a not-for-profit entity?
a) Statement of Position.
b) Statement of Restricted Funds.
c) Statement of Activities.
d) Statement of Cash Flows.

d

The primary focus of the Statement of Activities of a not-for-profit organization is on determining the net increase/decrease in which of the following?
a) Unrestricted Net Assets.
b) Temporarily Restricted Net Assets.
c) Permanent Net Assets.
d) Net Assets of the entity taken as a whole.

c

Under the GASB Statement No. 34 reporting model for governmental entities, which of the following is required?
a) Only one set of financial statements, prepared on the full accrual basis of accounting.
b) Only one set of financial statements, prepared on the modified accrual basis of accounting.
c) Two sets of financial statements, one that views the government as a collection of separate funds and reports using the current financial resources measurement focus and modified accrual basis of accounting for governmental funds and one that views the government as a whole by combining all governmental activities in one column and all business-type activities in another column using the full accrual basis of accounting for both columns.
d) Two sets of financial statements, one that views the government as a whole using the current financial resources measurement focus and modified accrual basis of accounting and one that views the government by function and combines all governmental activities in one column and all business-type activities in another column using the full accrual basis of accounting for both columns.

a

Under the GASB Statement No. 34 reporting model for governmental entities, the government-wide Statement of Net Assets will display which of the following?
a) Assets, Liabilities, and Net Assets.
b) Assets, Liabilities, and Fund Balances.
c) Assets, Liabilities, and Fund Equity.
d) Assets, Liabilities, and Owner's Equity

d

Under the GASB Statement No. 34 reporting model for governmental entities, the focus of the government-wide Statement of Activities is on which of the following?
a) Program revenues and general revenues.
b) Program revenues and expenses.
c) Net income.
d) The net cost of each of the government's main functions and programs.

a

A not-for-profit entity Statement of Net Assets will NOT report which of the following?
a) Net assets invested in capital assets net of related debt.
b) Capital assets.
c) Temporarily restricted net assets.
d) Permanently restricted net assets.

b

Which of the following funds of Chessie City would be consolidated to form the governmental activities column in the City's government-wide financial statements?
a) Its general fund, special revenue fund, and agency fund.
b) Its general fund, debt service fund, and capital projects fund.
c) Its general fund, enterprise fund, and fiduciary fund.
d) Its enterprise fund and internal service fund.

c

Which fund type would all governments normally include in their fund financial statements?
a) Capital projects funds
b) Special revenue funds
c) General fund
d) Fiduciary funds

b

Under the GASB Statement No. 34 reporting model for governmental entities, fund financial statements include separate sets of financial statements for:
a) Each major function of the government.
b) Governmental funds, proprietary funds, and fiduciary funds.
c) Governmental funds, enterprise funds, and internal service funds.
d) Governmental funds, special revenue funds, and debt service funds.

c

When a fax machine purchased by a governmental unit is received, it should be recorded in the general fund as a(n)
a) Expense
b) Encumbrance
c) Expenditure
d) General Capital Asset

b

Which of the following is not included in the financial section of the Comprehensive Annual Financial Report?
a) Required supplementary information
b) Letter of transmittal
c) Financial Statements
d) Notes to the statements

d

During the current fiscal year, Mountain View City's water utility, an enterprise fund, rendered billings for water supplied to the general fund. Which of the following accounts should be debited by the general fund?
a) Transfer-out to enterprise fund
b) Due to water utility enterprise fund
c) Appropriations
d) Expenditures

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