Upgrade to remove ads
Governmental Accounting Chapter 5
Terms in this set (44)
1. The measurement focus used by governmental fund measures:
2. A government would refer to its property tax calendar to determine whether property taxes receivable at any given time are
delinquent or current
3. At the time a government levies the property tax, an allowance for uncollectible property taxes is established so that
property tax revenues can be reported at a net collectible amount
4. A municipality uses the allowance method to record uncollectible property taxes. If it decides to write off an account as uncollectible, it should:
debit allowance for uncollectible property taxes; credit property taxes receivable
5. If a taxpayer fails to pay his property taxes on time and the city decides to foreclose the property, what accounting entry should the city make?
reclassify the property tax receivable account to a tax lien receivable account
6. A city levies property taxes of $100,000, but believes that it will not be able to collect $10,000 of those taxes. What entry should it make when the taxes are levied?
Property taxes receivable 100,000 Allowance for uncollectible taxes 10,000
Revenues - property taxes 90,000
7. A property owner receives a property tax bill for $2,500 and appeals the assessment. Before he pays the bill, the city reduces his property tax to $2,000. If the city had previously established an allowance for property tax refunds, what entry should it make to record the reduction?
Allowance for property tax refunds 500
Property taxes receivable 500
8. A city uses the allowance method to provide for uncollectible property taxes. At the start of the year, the city established an allowance of $75,000 for uncollectible taxes. During the year, it wrote off $60,000 as uncollectible. At year-end, the city still has some uncollected taxes, but believes it will need an allowance of only $12,000 to cover any receivables that it may need to write off as uncollectible. What adjusting entry should it make?
Allowance for uncollectible property taxes 3,000
Revenues - property taxes 3,000
9. At the beginning of the year 2013, a town recorded General Fund property tax receivables of $400,000. By year-end (December 31), taxpayers had paid a total $360,000. Based on previous experience, the town expected to collect the $40,000 of delinquent taxes as follows: $30,000 in January and February of 2014 and $10,000 between March and August of 2014. How much should the town report as property tax revenue in its General Fund statements for the year 2013?
10. On January 1, 2013, a city recorded General Fund property tax revenues of $600,000, but made no provision for uncollectible receivables or tax refunds. During the year, it collected property taxes of $540,000, wrote off $3,000 as uncollectible, and made tax refunds of $2,000. At year-end, the city finance director concluded that $15,000 of the delinquent taxes would be collected in January and February of 2014, $10,000 would be collected later in 2014, and $30,000 would need to be written off as uncollectible. How much should the city report as property tax revenue in its General Fund financial statements for the year 2013?
11. Which of the following best describes the general principle for recognizing property tax revenues in the General Fund?
They should be recognized in the current period to the extent collected and also if collected early in the following year
12. When making its year-end entries, the city's accountant determines that $15,000 of the city's remaining current property taxes receivable would not be collected within the first sixty days of the next fiscal year, but would be collectible later in that year. At year-end, the city should report a $15,000 credit to:
deferred revenues - property taxes
13. Which of the following is the most likely reason that deferred revenue is reported on the General Fund balance sheet?
there are property taxes receivable at year end that probably will not be collected for at least 60 days after the end of the accounting period
14. When reporting on the General Fund in the fund financial statements, what is the general principle regarding the accrual of sales taxes collected by merchants but not yet remitted to the taxing government?
sales taxes should be recognized when the merchant makes the sale provided taxes are received early enough in the following year to finance expenditures of the period covered by the statements
15. Which of the following are considered to be a "derived" tax revenue based on GASB standards?
sales taxes and income taxes
16. A state provides a city with a grant of $350,000 for a special "meals for the homeless" program. The city will receive payment from the state within 30 days of incurring eligible expenditures for homeless people. When should the city recognize revenues under this grant?
when it incurs expenditures under the grant
17. When counties receive cash advances under grants from the state, what account should they credit?
advance on state grants
18. A school district receives a grant from the federal government to reimburse the district for the salaries of teachers in an "English as a Second Language" program. The grant has no time requirements. The school district has paid the teachers and expects to receive payment from the federal government within 30 days of year-end. Which of the following journal entries would be needed for the school district?
debit due from federal government and credit intergovernmental revenues - grants
19. A state government receives a grant from the federal government that it disburses to local governments within the state. To meet federal grant requirements, the state government monitors the local governments to make sure that they comply with federal grant requirements. When the state government disburses the grant monies to the local governments, it should debit:
expenditures - federal grant
20. A state government receives a grant from the federal government that it disburses to local governments within the state. The state government disburses the cash received from the federal government to the local government, but the state government has no other administrative responsibilities regarding the grant. The state government should report the grant in:
an agency fund
21. Which of the following liabilities normally would be reported in governmental funds?
accrued salaries payable and vouchers payable
22. Governmental fund liabilities are:
claims against current financial resources
23. The attorneys for the City of Cleveland believe that a lawsuit filed against the city will be settled late in the next fiscal year. The attorneys believe that it is probable that the city will have to pay the claimants $50,000 to settle the lawsuit, but it is possible that it could be settled for as little as $25,000 or as much as $75,000. How much should the city accrue as a liability in the General Fund for its current fiscal year?
24. A town's garbage trucks accidentally sideswiped two parked automobiles in the year ended December 31, 2013. One case was settled for $6,000, and the town expects to pay it in January 2014. In the other case, the claimant originally demanded $30,000. The town attorney thinks they can settle the claim for $20,000, but it probably will take two years to settle the case. What amount should the town report as a claims liability on the General Fund's December 31, 2013 balance sheet?
25. The General Fund lends cash at the beginning of the year to an Enterprise Fund, expecting to be repaid before the end of the year. What account should be debited in the General Fund?
due from enterprise fund
26. A General Fund receives an invoice from the Electric Utility Fund (an Enterprise Fund) for electricity provided by the Utility Fund. When it receives the invoice, what account should be debited in the General Fund?
expenditures - utility services
27. The General Fund of a city pays all utility bills received from private companies for services provided to city agencies. It then bills other funds for their shares of the bills. On May 10, the General Fund pays an electric bill for $460,000. It then sends a bill to the Library Special Revenue Fund for $8,000, representing the library's share of the bill. Which account should the General Fund credit when it sends the bill to the Library Special Revenue Fund?
expenditures - utilities
28. The city council decides to close the Library Special Revenue fund and send its remaining resources ($90,000 cash) to the General Fund. What account should the Library Special Revenue Fund debit when it sends the cash to the General Fund?
transfer out to general fund
29. The General Fund provides a recurring annual subsidy to the Mass Transit Enterprise Fund to keep bus fares at a reasonable level. How should the General Fund report the subsidy in its financial statements?
as a transfer out
30. Which of the following interfund transactions will be reported as a separate line item in the operating statement of a General Fund?
transfer out to a debt service fund
31. In the statement of revenues, expenditures, and changes in fund balances, a transfer received by the Debt Service Fund from the General Fund should be reported by the Debt Service Fund as a:
transfer in, in the other financing sources/uses section
32. A city paid $50,000 for police cars with the expectation that they would have a useful life of five years. After four years, the city sold the cars for $5,000. How should the city account for the sale in the General Fund?
debit cash for $5,000 and credit other financing source--sale of capital assets for $5,000.
33. A city uses the purchases method of accounting for supplies in the General Fund. At year-end, the amount of supplies on hand is material and the city wants to report the inventory in its balance sheet. How should the General Fund record the inventory?
debit supplies inventory and credit nonspendable fund balance
34. Which of the following describes the proper accounting procedure for supplies in the General Fund?
Supplies may be accounted for as expenditures either when purchased or when consumed. In either case, material amounts of inventory are shown on the balance sheet
35. A county has $2 million of outstanding encumbrances related to unassigned resources at year-end, December 31, 2013. It expects to accept delivery on all orders in 2014. How should the county handle the outstanding encumbrances in its General Fund balance sheet at December 31, 2013?
it should close the open encumbrances and show them as part of assigned fund balance
36. Which of the following best describes an assignment of fund balance?
it is a government's intent to spend resources for specific purposes
37. The City of Cleveland's General Fund balance sheet for its December 31, 2013 year end shows inventory of $56,000 and prepaid rent of $20,000. The city also had $120,000 of outstanding encumbrances related to unassigned resources in its General Fund at year-end. In December 2013, a grantor provided the City with $84,000 that must be used to pay musicians who perform in the city's series of summer concerts in the park during 2014. How much should the city report as assigned fund balance in its General Fund on December 31, 2013?
38. The City of Cleveland's General Fund balance sheet for its December 31, 2013 year end shows inventory of $56,000 and prepaid rent of $20,000. The city also had $120,000 of outstanding encumbrances in its General Fund at year-end. In December 2013, a grantor provided the City with $84,000 that must be used to pay musicians who perform in the city's series of summer concerts in the park during 2014. How much should the city report as nonspendable fund balance in its General Fund on December 31, 2013?
39. The City of Cleveland's General Fund balance sheet for its December 31, 2013 year end shows inventory of $56,000 and prepaid rent of $20,000. The city also had $120,000 of outstanding encumbrances in its General Fund at year-end. In December 2013, a grantor provided the City with $84,000 that must be used to buy musical instruments for the city's youth orchestra. No instruments had been purchased at year-end. How much should the city report as restricted fund balance in its General Fund on December 31, 2013?
40. The highest level of decision-making authority for the City of Cleveland passes an ordinance that states that all royalty payments received from oil or gas production on city property must be used for street maintenance or improvements. As of the end of its current fiscal year, the city has $2 million of unspent royalty payments. These amounts should be reported as part of:
committed fund balance
41. A city has only one special revenue fund. All the fund balance classifications that it reports have positive balances. Which of the following fund balance classifications would not be reported by the city?
unassigned fund balance
42. For the general fund, the residual fund balance classification is:
unassigned fund balance
43. The city's governing body gives the city's finance director the authority to set aside "excess" amounts in the General Fund to provide funds to build a new fire station. The finance director sets aside $200,000 for that purpose during the current fiscal year. This should be reported as part of:
assigned fund balance
44. The city council appropriates a portion of the government's current year-end fund balance to eliminate an anticipated budget deficit in next year's budget. Projected expenditures are anticipated to be greater than expected revenues next year. The appropriated portion of the current year's fund balance should be reported as:
assigned fund balance
THIS SET IS OFTEN IN FOLDERS WITH...
Chapter 4: Governmental Accounting
Governmental Accounting Chapter 6
Governmental Accounting: Chapter 3
Governmental Accounting Chapter 6
YOU MIGHT ALSO LIKE...
Non-governmental Accounting - MID TERM
Gov Not-For-Profit Ch 4, 5, 6
Governmental and Nonprofit Accounting Exam 1
Chapter 1-6 MC
OTHER SETS BY THIS CREATOR
Chapter 9 Governmental Accounting
Governmental and Non Profit Accounting Chapter 5
OTHER QUIZLET SETS
Conception and Fetal Development NURS 32…
History Chapter 4
week 10 path lecture
Neuro Test II (1)