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26 terms

Governmental and Nonprofit

Multiple Choice Q&A
Which source of financial resource is unique to government?
B. Taxation
What best describes the relationship of the FASB and the GASB?
C. They are co-equal bodies with different areas of responsibility for standard setting.
Which of the following is a government?
Both items A and B
A. A school district
B. Library commission if government appointed a voting majority of its governing board
Which of the following has the highest level of authority for a government under GAAP?
D. AICPA Industry audit and Accounting and Accounting Guides for local governments cleared by the GASB.
Which of the following has the highest level of authority for a government under GAAP?
A. A GASB standard on pension accounting
Capital outlay expenditures would be least likely in a
A. Debt service fund
Which of the following scenarios regarding the fund type reporting practices for the city of Leesville would be allowed by GAAP?
A. One General Fund, one Special Revenue Fund, one Debt Service fund, three Enterprise Funds, one Investment Trust Fund, and two Pension Trust Funds.
Which of the following would not be classified as an expenditure?
E. Depreciation
GAAP requirements for external financial reporting include?
D. All of the above. (Not on test)
If an enterprise fund transfers $10,000 to the general fund and the General fund loans $15,000 to an Internal Service Fund, the effect on the General Fund fund balance would be
A. An increase of $10,000
A city's police department receives goods from an Internal Service Fund. To record this transaction the city should record a credit to what account in the General Fund.
A. Due to the Internal Service Fund
The city's central garage, which is accounted for as an Internal Service Fund, repairs and maintains all of the city's vehicles. The fire department is accounted for in the General Fund. The Central Garage Internal Fund sends a bill to the fire department for $18,000, which represents the cost of maintaining fire trucks for the month. The Central Garage should record
F. Both A and D
A. A debit to due from general fund for $18,000.
B. A credit to Due to General Fund for $18,000
Which of the following budgetary entries would the town of Geneva make upon adoption of its Special Revenue Fund Budget for the year? Assume the following: Estimated revenues = $6,400,000 and Appropriations = $ 6,080,000
Dr. Cr.
Appropriations $6,080,000
Unreserved Fund Balance $320,000
Estimated Revenues $6,400,000
The town of Red Herring issued $60,000 of purchase orders. Assume that when all orders were received, the actual cost was $59,000. How much would be recorded as expenditures when the goods are received?
B. $59,000
Under an encumbrances system, which account is debited when the purchase order is issued?
B. Encumbrances (Not on test)
Which of the following scenarios would represent differences between the budgetary basis of accounting and the GAAP basis of accounting? (She does not like)
D. All of the above
A. Outstanding encumbrances are considered expenditures
B. The General Fund budgets on a cash basis
C. Transfers from other funds are inflows of budgeting resources but are not revenues for financial reporting purposes.
UNder the modified accrual basis, revenues are considered available to finance current period expenditures if
E. Both Items A and C
A. Legally available to finance current period expenditures
C. Collected in the current period or soon enough thereafter to be used to pay liabilities of the current period
The available criterion for governmental fund revenue recognition applies to governmental fund
E. All of the above
A. Property tax revenues
B. Charges for services
C. Intergovernmental revenues
D. Interest and penalties on taxes
A city collected $750,000 of taxers levied during the current fiscal year (the total levy was $780,000), $50,000 of past due taxes levied in a previous year, and$25,000 of prepayment for next year's taxes. The city should report revenue in the general fund of
B. $800,000
Which of the following statements regarding tax revenue recognition in the General Fund is false?
C. Tax revenues are generally recorded at gross amount of the levy, regardless of the expected collections.
Assume that the village of Hannah uses the purchases method of inventory accounting. At the end of the year the inventory levels have increased. What entry would be made to reflect the inventory increase?
C. Debit Inventory of supplies, Credit other financing sources.
Which of the following is not a typical governmental fund liability (and thus not an expenditure that is recognized when the liability is incurred) (Not on test)
B. Debt service
Nathan Township financed emergency repairs on the Township Hall by borrowing on a $200,000 6 month short-term note. The interest rate of the note was 6% and it was issued two months prior to the end of the fiscal year. Which of the following statements accurately reflects how the General Fund will be affected in the year the financing was acquired?
E. Both items B and C
B. The General Fund will report a Note Payable of $200,000
C. The General Fund will report interest expenditures of $2,000
A court judgement was rendered against county in which they were ordered to pay $500,000 in equal installments over a five-year period to the plaintiff. The county's General Fund will
C. Report expenditures of $100,000 in year 1.
Assume the General Fund employees accrued $125,000 of compensated absences liability during the year. Compensated abgsence liability, which is considered to be a long-term liability, decreased $30,000 from the beginning of the year to the end of the year. The fund also actually poaid $550,000 in salaries and wages during the year. At the end of the fiscal year, salaries and wages payable was $12,000. The General Fund would report salaries and wages expenditures of
A. $562,000
Assume the General Fund borrows $50,000 from the Enterprise fund. The interfund loan is scheduled to be paid back in five years. Which of the following statements properly characterizes the reporting effects of this transaction on the general ledger.