Question 1

Which of the following accounts in the General Fund is credited when a purchase order is approved?

Accepted Answer

A)   Appropriations Control.
B)   Encumbrances Control.
C)   Budgetary Fund Balance -- Reserve for Encumbrances.
D)   Vouchers Payable.

Question 2

A common use of special revenue funds is to account for intergovernmental grants when federal or state governments provide resources to local governments.

Accepted Answer

A) True 
 B)False

Question 3

Governmental fund financial statements are to be prepared on the accrual basis of accounting.

Accepted Answer

A) True 
 B)False

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 postclosure 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

Resources appropriately reported within proprietary or fiduciary funds are excluded from special revenue funds.

Accepted Answer

A) True 
 B)False

Question 6

When closing the General Fund and Special Revenue Funds of a state or local governmental unit,the balance of the operating statement accounts and the balances of the budgetary accounts are closed to Fund Balance.

Accepted Answer

A) True 
 B)False

Question 7

The Debt Service Fund would record the receipt of money from the General Fund as other financing sources on the activities Statement of Revenues,Expenditures,and Changes in Fund Balance.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following accounts of a governmental unit is credited to close it at the end of the fiscal year?

Accepted Answer

A)   Appropriations Control.
B)   Encumbrances Control.
C)   Budgetary Fund Balance -- Reserve for Encumbrances.
D)   Other Financing Sources-Transfers In.

Question 9

When recording property taxes,the estimated uncollectible amount of property taxes is:

Accepted Answer

A)   Recognized as an expenditure.
B)   Recognized as a reduction of revenue.
C)   Not recognized.
D)   None of the above.

Question 10

Transactions between funds of the same government are assumed to be arm's length in nature because there is no private inurement.

Accepted Answer

A) True 
 B)False

Question 11

The journal entry to record the re-establishment of encumbrances that were outstanding at the close of the prior period would include:

Accepted Answer

A)   A credit to Fund Balance
B)   A debit to Encumbrance Control
C)   A credit to Encumbrance Control
D)   A and B would both be included in the journal entry

Question 12

Interfund services provided and used are recognized as:

Accepted Answer

A)   Transfers In and Transfers Out.
B)   Revenues or expenditures.
C)   Increases and Decreases in Fund Balance.
D)   None of the above.

Question 13

The City of Smithville was awarded a federal grant on May 1,2012 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,$6,000,000 of expenditures was recorded,and cash was paid out.On October 15 the $6,000,000 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 14

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)   Salary Expense.
B)   Appropriations Control.
C)   Encumbrances Control.
D)   Expenditures Control.

Question 15

What would be the effect on the General Fund Fund Balance at the end of the current fiscal year of recording the purchase of a $15,000 new computer?

Accepted Answer

A)   Reduce the General Fund's Fund Balance $400.
B)   Reduce the General Fund's Fund Balance $14,600.
C)   Reduce the General Fund's Fund Balance $15,000.
D)   Have no effect on the General Fund's Fund Balance.

Question 16

Under the modified accrual basis of accounting,GASB standards for property tax revenue recognition provide that revenue should not be recognized for property taxes collected:

Accepted Answer

A)   After fiscal year end.
B)   More than 30 days after fiscal year end.
C)   More than 60 days after fiscal year end.
D)   More than 90 days after fiscal year end.

Question 17

Which of the following is true regarding accounting for inventories?

Accepted Answer

A)   GAAP permits use of either the consumption method or the purchases method.
B)   If inventories are significant, GAAP requires that an asset account be credited in order to record a fund balance reserve.
C)   Under the consumption method, Expenditures equal the amount of inventory received during the period.
D)   All of the above are true.

Question 18

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 19

Nonreciprocal interfund activity:

Accepted Answer

A)   Includes interfund services provided and used
B)   Includes exchange-like transactions
C)   Includes interfund transfers and reimbursements
D)   Includes interfund loans

Question 20

Which of the following is not likely to be recorded in a special revenue fund?

Accepted Answer

A)   Phone fees restricted to supporting the emergency 911 access system.
B)   Hotel taxes restricted to promoting tourism.
C)   Sales taxes restricted to courthouse additions.
D)   State motor fuel tax restricted to road maintenance.

Exam 4: Accounting for the General and Special Revenue Funds

The Debt Service Fund would record the receipt of money from the General Fund as other financing sources on the activities Statement of Revenues,Expenditures,and Changes in Fund Balance.

Correct Answer
verified

A common use of special revenue funds is to account for intergovernmental grants when federal or state governments provide resources to local governments.

Correct Answer
verified

Which of the following is true regarding modified accrual accounting?

Correct Answer
verified

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?

Correct Answer
verified

When closing the General Fund and Special Revenue Funds of a state or local governmental unit,the balance of the operating statement accounts and the balances of the budgetary accounts are closed to Fund Balance.

Correct Answer
verified

When recording property taxes,the estimated uncollectible amount of property taxes is:

Correct Answer
verified

Which of the following is true regarding accounting for inventories?

Correct Answer
verified

Which of the following accounts in the General Fund is credited when a purchase order is approved?

Correct Answer
verified

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

Correct Answer
verified

What would be the effect on the General Fund Fund Balance at the end of the current fiscal year of recording the purchase of a $15,000 new computer?

Correct Answer
verified

Which of the following is not likely to be recorded in a special revenue fund?

Correct Answer
verified

Transactions between funds of the same government are assumed to be arm's length in nature because there is no private inurement.

Correct Answer
verified

The journal entry to record the re-establishment of encumbrances that were outstanding at the close of the prior period would include:

Correct Answer
verified

Interfund services provided and used are recognized as:

Correct Answer
verified

Under the modified accrual basis of accounting,GASB standards for property tax revenue recognition provide that revenue should not be recognized for property taxes collected:

Correct Answer
verified

Correct Answer
verified

Governmental fund financial statements are to be prepared on the accrual basis of accounting.

Correct Answer
verified

Resources appropriately reported within proprietary or fiduciary funds are excluded from special revenue funds.

Correct Answer
verified

Which of the following accounts of a governmental unit is credited to close it at the end of the fiscal year?

Correct Answer
verified

Nonreciprocal interfund activity:

Correct Answer
verified

Exam 4: Accounting for the General and Special Revenue Funds

The Debt Service Fund would record the receipt of money from the General Fund as other financing sources on the activities Statement of Revenues,Expenditures,and Changes in Fund Balance.

Correct AnswerverifiedShow Answer

A common use of special revenue funds is to account for intergovernmental grants when federal or state governments provide resources to local governments.

Correct AnswerverifiedShow Answer

Which of the following is true regarding modified accrual accounting?

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

When closing the General Fund and Special Revenue Funds of a state or local governmental unit,the balance of the operating statement accounts and the balances of the budgetary accounts are closed to Fund Balance.

Correct AnswerverifiedShow Answer

When recording property taxes,the estimated uncollectible amount of property taxes is:

Correct AnswerverifiedShow Answer

Which of the following is true regarding accounting for inventories?

Correct AnswerverifiedShow Answer

Which of the following accounts in the General Fund is credited when a purchase order is approved?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What would be the effect on the General Fund Fund Balance at the end of the current fiscal year of recording the purchase of a $15,000 new computer?

Correct AnswerverifiedShow Answer

Which of the following is not likely to be recorded in a special revenue fund?

Correct AnswerverifiedShow Answer

Transactions between funds of the same government are assumed to be arm's length in nature because there is no private inurement.

Correct AnswerverifiedShow Answer

The journal entry to record the re-establishment of encumbrances that were outstanding at the close of the prior period would include:

Correct AnswerverifiedShow Answer

Interfund services provided and used are recognized as:

Correct AnswerverifiedShow Answer

Under the modified accrual basis of accounting,GASB standards for property tax revenue recognition provide that revenue should not be recognized for property taxes collected:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Governmental fund financial statements are to be prepared on the accrual basis of accounting.

Correct AnswerverifiedShow Answer

Resources appropriately reported within proprietary or fiduciary funds are excluded from special revenue funds.

Correct AnswerverifiedShow Answer

Which of the following accounts of a governmental unit is credited to close it at the end of the fiscal year?

Correct AnswerverifiedShow Answer

Nonreciprocal interfund activity:

Correct AnswerverifiedShow Answer

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