1. Which of the following would not be an example of a non-exchange transaction?
a. Property taxes.
b. Fines and forfeits.
c. Charges of services.
d. Sales taxes.
Charges of services
2.Which of the following would be an example of a derived tax revenue?
a. Sales taxes.
b. Income taxes.
c. Both of the above.
d. Neither of the above.
Both of the above
3.Which of the following revenues of the General Fund are usually recorded before they are actually received?
a. Sales taxes.
b. Property taxes.
c. Fines and Penalties.
d. Parking meter receipts.
Property taxes
4.Which of the following will increase the fund balance of a governmental unit at the end of a fiscal year?
a. Estimated revenues are less than expenditures and reserve for encumbrances.
b. Appropriations are less than expenditures and encumbrances.
c. Re
Revenues are greater than expenditures and encumbrances
5.In which of the following circumstances should deferred revenues to be recorded in the General Fund?
(1) Property tax bills are mailed and a receivable is recorded in advance of the year for which they are levied.
(2) Business license fees are collected
Both 1 and 2 above
6.The budget of the General Fund of the City of Memphis shows an appropriation for capital equipment of $200,000. So far a truck, costing $60,000, has been received and paid for. Another truck, expected to cost $70,000, has been ordered and an encumbrance
70,000
7.Charles County received the following proceeds that are legally restricted:
Taxes assessments to install sidewalks $2,000,000
Motel taxes to promote tourism 400,000
What amount should be reported in the County's special revenue funds?
a. $2,400,000
b. $
400,000
8.Which of the following is true regarding modified accrual accounting?
a. Modified accrual accounting is required for all fund financial statements.
b. Modified accrual accounting requires that all expenditures be recognized on the accrual basis.
c. Both
Neither of the above is true
9.Which of the following is true regarding modified accrual accounting?
a. Expenditures should generally be recognized for activities normally paid out of governmental fund resources even if those resources are not available at the present time.
b. Expend
Expenditures should generally be recognized for activities normally paid out of governmental fund resources even if those resources are not available at the present time.
10.Which of the following is true regarding modified accrual accounting?
a. Debt service expenditures for principal and interest are generally recorded when due and are not accrued at year-end.
b. If a government has resources available in a debt service
Both of the above are true
1. Brownville adopted its budget for the fiscal year ending June 30 with $5,000,000 for estimated revenues. Actual revenues for the year were $4,900,000. In closing the budgetary accounts for the year.
a. Revenues Control will be debited for $100,000.
b.
Estimated Revenues Control will be credited for $5,000,000.
2.For the coming budgetary year Johnson County's General Fund expects the following inflow of resources:
Property taxes, licenses and fines $7,000,000
Proceeds of debt issue 2,000,000
Interfund transfer from enterprise fund 600,000
In the budgetary entry,
7,000,000
3.Tom City received equipment that had been approved for purchase (i.e., purchase order) by the General fund earlier that same fiscal year. Payment is due in 30 days. What effect will receipt of the equipment have on the following accounts?
Encumbrances E
Decrease Increase
4.The City of Elmwood reported the following for the fiscal year ended Dec. 31, 2017:
Purchase orders authorized by appropriations
and outstanding as of December 31, 2017 $300,000
Expenditures authorized by 2017 appropriations $2,900,000
Expenditures auth
3,100,000
5.A government recognizes property tax revenue early as GASB permits. Property taxes levied in 2016 should be reported as General Fund revenues in fiscal year 2017:
a. For the amount collected in 2017 only.
b. For the amount collected in 2016 and 2017 onl
For the amount expected to be collected in 2017 after 60 days.
6.York County estimated 2 percent of its property taxes would by uncollectible. During the year, the County wrote off several accounts. Assuming the 2 percent estimate is still deemed to be appropriate at year-end, what effect will the recording of an all
Decrease No effect
7.West Bend County created a special revenue fund, the Summer Employment Grant Fund, to account for the proceeds of a federal grant for summer youth employment. During the year ended June 30, 2017, the County received an award for this reimbursement grant
300,000
8.Which of the following legally restricted revenues should be accounted for in a special revenue fund?
a. Taxes restricted for payment of long-term debt.
b. Income earned on investments held for a
government's pension plan.
c. Federal government grant to
None of the above.
9.A Budgetary Fund Balance�Reserved for Encumbrances (current year) in excess of a balance of Encumbrances Control indicates:
a. An excess of Vouchers Payable over
Encumbrances Control.
b. An excess of purchase orders over invoices
received.
c. An excess
A recording error
10.In the first month of the fiscal year, Kent City borrowed $2,000,000 on tax anticipation notes. Two months later, property tax collections were used to play off the note. What effect will the borrowing and subsequent payment of the tax anticipation not
No effect Increase
1.Which of the following fund types use modified accrued accounting?
a. Capital projects.
b. Debt service.
c. Permanent.
d. All of the above.
All of the above
2. Financing for the renovation of Fir City's municipal park, begun and completed during the fiscal year came from the following sources:
Grant from State Government $400,000
Proceeds from General Obligation Bond Issue 500,000
Transfer from Fir's General
400,000 600,000
3. On the last day of the year, Pine Village signed a 10-year lease and took possession of a building for its administrative offices. The lease meets the criteria of a capital lease. What effect will the transaction have on the total assets reported in th
No effect Increase
4. During the first year of a capital lease, Pine Village made its monthly rent payments (due the first day of each month) in a timely manner. What effect will the payments have on the total liabilities reported in the following statements?
Debt Service F
No effect Decrease
5. Seaview City is legally obligated to maintain a debt service fund. On July 1, 2015, the City issued 10-year 5 percent term bonds in the amount of $20,000,000 at an issue price of 101. Interest is payable on January 1 and July 1. What amount of bond pre
0
6.What would be amount of debt service expenditures for the year ended December 31, 2015?
a. $0
b. $ 30,000
c. $ 60,000
d. $160,000
0
7. What would be the proper accounting for the $10,000 bond premium?
a.The bond premium would normally be recorded as revenue in a capital projects fund.
b.The bond premium would normally be amortized over the life of the bond issue.
c.The bond premium wo
The bond premium would normally be recorded as another financing source in a capital projects fund.
8.What would be the amount of the debt service expenditures for the year ended December 31, 2016?
a. $0
b. $ 60,000
c. $130,000
d. $160,000
160,000
9. What would be the amount of the debt service expenditures for the year ended December 31, 2017?
a. $160,000
b. $157,000
c. $154,000
d. $ 54,000
154,000
10.What would be an example of a permanent fund?
a. A cemetery perpetual care fund.
b. A gift given, to the invested permanently, with the
proceeds to benefit retired firefighters.
c. A pension trust fund.
d. All of the above.
A cemetery perpetual care fund.
1. Which of the following activities would use a debt service fund to account for the accumulation of resources for and the payment of interest and principal on long-term debt?
FIDUCIARY FUNDS PROPRIETARY FUNDS
a. Yes No
b. No Yes
c. Yes Yes
d. No No
No No
2. Interest and principal on the City of Buena Vista's serial bonds are paid by a debt service fund using cash provided by the City's General Fund. In the debt service fund's statements, how will the cash receipts and disbursements be reported?
CASH RECEI
Transfers in Expenditures
Items 3-7 are based on the following information. During the fiscal year ending December 31, 2015, the City of X issued 6 percent general obligation bonds in the amount of $2,000,000 at par and used $1,990,000 of the proceeds to construct a police station
As another financing source in a capital projects fund.
Items 3-7 are based on the following information. During the fiscal year ending December 31, 2015, the City of X issued 6 percent general obligation bonds in the amount of $2,000,000 at par and used $1,990,000 of the proceeds to construct a police station
1,990,000
Items 3-7 are based on the following information. During the fiscal year ending December 31, 2015, the City of X issued 6 percent general obligation bonds in the amount of $2,000,000 at par and used $1,990,000 of the proceeds to construct a police station
As another financing source in a debt service fund and as another financing use in a capital projects fund.
Items 3-7 are based on the following information. During the fiscal year ending December 31, 2015, the City of X issued 6 percent general obligation bonds in the amount of $2,000,000 at par and used $1,990,000 of the proceeds to construct a police station
0
Items 3-7 are based on the following information. During the fiscal year ending December 31, 2015, the City of X issued 6 percent general obligation bonds in the amount of $2,000,000 at par and used $1,990,000 of the proceeds to construct a police station
220,000
8. The general rule for modified accrual accounting is to recognize liabilities for obligations that will require current financial resources to settle. Which of the following is a exception to that rule?
UNMATURED PRINCIPAL ON G LTD
ACCRUED INTEREST ON G
No No
When a government acquires a general fixed asset through a capital lease, the acquisition should be reflected in the governmental fund-basis financial statements as:
a. An expenditure, but not another financing source.
b. Another financing source, but not
Both an expenditure and another financing source.
10. Which of the following is true regarding permanent funds?
a. Permanent funds must use modified accrual accounting.
b. Permanent funds must include resources that cannot be expended.
c. The income from permanent funds must benefit the government and/or
All of the above are true.
1.Which of the following activities is required by GASB standards to be reported in an Internal Service Fund?
(1) Centralized data processing.
(2) Centralized janitorial services.
a. (1) only
b. (2) only
c. Both (1) and (2)
d. Neither (1) and (2)
Neither (1) and (2)
2. Which is true regarding FASB accounting and financial reporting for enterprise funds, as long as FASB standards do not conflict with GASB standards?
a. All FASB accounting principles prescribed for
business organizations must be followed.
b. FASB accou
FASB accounting principles prescribed for business organizations on or before November 30, 1989, must be followed; FASB accounting principles issued after that date may or may not be
followed, as long as a government applies those accounting principles co
3. Which of the following is true regarding the Statement of Net Position for proprietary funds?
a. Either the net position format or the balance sheet
format may be used.
b. Major enterprise and internal service funds are to
be reported separately.
c. Th
Either the net position format or the balance sheet
format may be used.
4.Which of the following is true regarding the Statement of Revenues, Expenses, and Changes in Fund Net Position for proprietary funds?
a. Revenues must be reported by source and
expenses must be reported by function.
b. An operating income figure must be
An operating income figure must be displayed.
5.Which of the following is true regarding the Statement of Cash Flows for proprietary funds?
a. Three categories are required: operating,
financing, and investing.
b. Interest receipts and interest payments are to be
reported as cash flows from operating
A reconciliation must be presented that illustrates
the differences between operating income and cash flows from operating activities
6. Which of the following is true regarding proprietary fund reporting?
a. The economic resources measurement focus and accrual basis of accounting required.
b. When general obligation bonds are issued for proprietary fund purposes, the debt is shown in t
The economic resources measurement focus and accrual basis of accounting required.
During the year ended December 31, 2017, Johnson City received a state grant of $600,000 to finance the purchase of buses and an additional grant of $200,000 to aid in the financing of bus operations in 2017. This is a reimbursement grant. Only $400,000 o
600,000
During the year ended December 31, 2017, Johnson City received a state grant of $600,000 to finance the purchase of buses and an additional grant of $200,000 to aid in the financing of bus operations in 2017. This is a reimbursement grant. Only $400,000 o
200,000
9. Which of the following is true of the Capital Contributions account of a proprietary fund?
a. Capital Contributions appears in the fund equity section of the Statement of Net Position.
b. Capital Contributions appears in the Statement of Revenues, Expe
Capital Contributions appears in the Statement of Revenues, Expenses, and Changes in Fund Net Position.
10. Which is the orientation of accounting and reporting for the following funds?
INTERNAL SERVICE ENTERPRISE
FUNDS FUNDS
a. Income determination Flow of funds
b. Flow of funds Flow of funds
c. Flow of funds Income determination
d. Income determination In
Income determination Income determination
1. Proprietary fund statements include:
a. Statement of Net Position (or Balance Sheet); Statement of Revenues, Expenses, and Changes in Retained Earnings; and Statement of Cash Flows.
b. Statement of Net Position (or Balance Sheet); Statement of Revenues
Statement of Net Position (or Balance Sheet); Statement of Revenues, Expenses, and Changes in Fund Net Position; and Statement of Cash Flows.
2.Which of the following would not be an example of an enterprise fund?
a. Water utility fund.
b. Self-insurance fund.
c. Airport fund.
d. Parking lot fund.
Self-insurance fund.
3.The billings for janitorial services provided to other departments are recorded by the internal service fund as:
a. Janitorial appropriations
b. Operating revenues
c. Transfers in
d. Intergovernmental transfers.
Operating revenues
Which of the following is (are) true regarding the proprietary fund Statement of Net Position?
a. The Statement of Net Position must report assets and liabilities classified as current and noncurrent.
b. The Statement of Net Position reports net assets cl
The Statement of Net Position must report assets and liabilities classified as current and noncurrent.
5. Which of the following is (are) true regarding the proprietary fund Statement of Revenues, Expenses, and Changes in Fund Net Position?
a. Capital contributions are to be reported separately after non-operating revenues and expenses.
b. Operating expens
Both of the above.
6. Which of the following is (are) true regarding the proprietary fund Statement of Cash Flows?
a. Either the direct or indirect method may be used.
b. When the direct method is used, a schedule must be prepared, illustrating the differences between net i
Neither of the above.
7. York City estimated 2 percent of its water utility's monthly billings would be uncollectible. During the year, the County water utility wrote off several accounts receivable. Assuming the 2 percent estimated is still deemed to be appropriate at year-en
No effect Increase
8. An internal service fund services departments within the General Fund and reports an operating profit for the year. Which of the following is true?
a. The expenditures in the General Fund overstate the true cost of operating the government.
b. The expe
The expenditures in the General Fund overstate the true cost of operating the government.
9.When must an enterprise fund be used to account for an activity?
a. When debt is backed solely by fees and charges.
b. When a legal requirement exists that the cost of providing services for an activity, including capital costs, be recovered through fee
When a government has a policy to establish fees and charges to cover the cost of providing services for an activity.
10. In 2017, Sunny City instituted a policy of self-insuring for employee injury claims. The following information pertains to Sunny City's liability for such claims:
Claims paid in 2017 $500,000
Current liability for claims at 12/31/17 140,000
Noncurrent
...
1.The fund equity section of a tax agency fund would report which of the following accounts in the Statement of Fiduciary Net Position:
a. Net position held for other governments.
b. Fund balance reserved for other governments.
c. Restricted net position.
None of the above.
2. DeKalb County collects property taxes within its boundaries and received from the other governments a 3 percent fee for administering those collections. For the current fiscal year the county collected $300,000 for the City of DeKalb, $1,000,000 for th
$439,000
3. Fiduciary funds include which of the following?
a. Agency, expendable trust, nonexpendable trust, pension trust.
b. Agency, private-purpose trust, pension trust.
c. Agency, permanent, private-purpose trust, pension trust.
d. Agency, permanent, private-
Agency, private-purpose trust, pension trust.
4.The City of Eastern Shores is trustee for a multi-government investment pool and has established an investment trust fund. Including in the investment trust fund, for management purposes, are investments in the amount of $13 million from the City's Gene
The City would report the $58 million in the investment trust fund, the $13 million in the General Fund, and the $4 million in private-purpose funds.
5. The City of X has investments in bonds. These bonds have an amortized cost of $1,010,000 and a market value of $1,012,000. The market value is quoted and available in the financial press. The original cost of the bonds was $1,015,000. The amount at whi
$1,012,000.
6. Which of the following is true regarding fiduciary funds?
A) Investment trust funds account for the internal portion of an investment pool, when a government is trustee for that pool.
B) Private-purpose trust funds account for resources that are admini
Private-purpose trust funds account for resources that are administered by a government for the benefit of others, such as a fund held to distribute resources to local not-for-profit charities.
7.In the Schedule of Employer Contributions, governments with defined benefit pensions should report (to the extent available) the percentage of annual required contribution for a minimum of:
a. 1 year.
b. 3 years.
c. 6 years.
d. 10 years.
10 years
8.The fund equity section of a public employee retirement fund would report which of the following accounts in the Statement of Fiduciary Net Assets:
a. Net position held in trust for pension benefits.
b. Fund balance reserved for employee pension benefit
Net position held in trust for pension benefits.
9.Which of the following statements is not correct with respect to Agency Funds?
a. Agency funds use modified accrual accounting
b. Assets accounted for in an agency fund belong to the party or parties for which the government acts as agent.
c. Assets are
Agency funds use modified accrual accounting
10.The Western Falls School District received a $100,000 gift from a wealthy alumnus, and an agreement was reached that $10,000 per year would be paid to the valedictorian of the high school class as a freshman scholarship to college, until the funds were
A private-purpose trust fund.
1.For which of the following activities does GASB require agency fund reporting by a county?
a. Tax collection for the county.
b. Working cash funds for all government departments.
c. Special assessment collections for which the government is not responsi
Special assessment collections for which the government is not responsible for the debt.
2. The County of Y collected property taxes levied within its boundaries and receives from the other governments a 2 percent fee for administering those collections. For the current fiscal the county collected $300,000 for the City of Y, $1,200,000 for th
Y County General Fund in the amount of $30,000
3. Which of the following is not true regarding the accounting for investments?
a. Investments in stocks with determinable fair value should be reported at fair value.
b. Investments in debt securities with determinable fair values should be reported at f
None of the above ; all are true.
4.The City of X received $1,000,000 in securities from a donor with the agreement that the $1,000,000 be invested permanently and that the income be used for the purchase of books for the city library. The donation of the $1,000,000 would be recorded in:
A permanent fund.
5.Which of the following would use modified accrual accounting?
a. Private-purpose trust funds.
b. Agency funds.
c. Permanent funds.
d. None of the above.
Permanent funds.
6. Which of the following is true regarding pension accounting and reporting?
a. When the government is trustee for the pension plan, the government is required to include the pension trust fund in the Statement of Fiduciary Net Position and Statement of
Both of the above.
7.Assets invested under deferred compensation plans in which the government acts as trustee adopted under Internal Revenue Code Section 457 should be reported in the government's:
a. General Fund.
b. Agency Fund.
c. Pension (and other employee benefits) t
Pension (and other employee benefits) trust fund.
8.Assets invested under deferred compensation plans in which an entity outside the government acts as trustee adopted under Internal Revenue Code Section 457 should be reported in the government's:
a. General Fund.
b. Agency Fund.
c. Pension (and other em
None of the above.
9.Which of the following is a required statement under GASB Statement, 43, Financial Reporting for Post-employment Benefit Plans Other Tan Pension Plans?
a. Statement of Changes in Plan Net Position.
b. Statement of Financial Position.
c. Statement of Cas
Statement of Changes in Plan Net Position.
10.GASB Statement 45, Accounting and Financial Reporting by Employers for Post-employment Benefits Other Than Pensions, provide guidance related to:
a. The funding progress of OPEB plans.
b. The amount and timing of OPEB expenditure or expense reporting.
The amount and timing of OPEB expenditure or expense reporting.
1.What city was home to the largest municipal bankruptcy in American history?
a. Detroit
b. New York City
c. There has never been a municipal bankruptcy in the U.S.
d. Chicago
Detroit
2. Which of the following is true regarding an interfund transfer?
a. Resources are provided form one fund to another without the expectation that they will be repaid
b. Resources are provided from one fund to another with the expectation they will be rep
Resources are provided form one fund to another without the expectation that they will be repaid
3.Budgetary accounts
a. Do not appear in the general purpose financial statements
b. Are required by GASB
c. Both answer choices are true
d. Neither answer choice is true
Do not appear in the general purpose financial statements
4.A review of the taxes receivable subsidiary ledger indicates that $25,000 would probably be received more than 60 days after the fiscal year end. The appropriate journal entry will include
a. A debit to revenues control
b. A debit to deferred inflows -
A debit to revenues control
5.All of the following are accounts that will be closed at year end EXCEPT
a. Supplies
b. Revenues
c. Expenditures
d. Appropriations Control
Supplies
6. All of the following funds record encumbrances EXCEPT
a. General Fund
b. Permanent
c. Special Revenues
d. Capital Projects
Permanent
7. The appropriate fund to be used for a trust that is nonexpendable and to be used to benefit and individual is
a. Private purpose fund
b. Permanent fund
c. Proprietary fund
d. Special revenue fund
Private purpose fund
8. GASB Statement 24 requires ______ financial statements for the general fund
a. 1
b. 2
c. 3
d. 4
2
9. The only fund allowed to have an unassigned fund balance is
a. General fund
b. Permanent fund
c. Special Revenue fund
d. Capital Projects fund
General Fund
10. The principal of permanent fund is classified as
a. Unassigned fund balance
b. Restricted fund balance
c. Nonexpendable fund balance
d. Committed fund balance
Nonexpendable fund balance
11. When preparing financial statements for proprietary funds, we apply the
a. Accrual basis
b. Cash basis
c. GASB requires no specific basis of accounting for proprietary funds
d. Modified accrual basis
Accrual basis
12. The required journal entry when supplies are ordered for the proprietary fund is
a. Debit encumbrances, credit reserve for encumbrances
b. None of the above
c. Debit reserve for encumbrance, credit encumbrance
d. Debit accounts payable, credit supplie
None of the above
13. City of Starkville supplies fund charges a 20% markup for supplies issued to other departments. If the supplies fund issues the General Fund department supplies that cost $160,000, then the journal entry to record the transaction would include the fol
Debit "due form general fund" for $192,000; credit "operating revenue" 192,00
14. When the government decides to use a single fund to accumulate funds and make payment for claims related to risk management, it must use:
a. The government is not required to account for funds accumulated for the purpose of making payment towards clai
The general fund or an internal service fund
15. The city of Starkville has a solid waste landfill enterprise fund. Future costs to close the landfill and post closure costs are expected to total $100,000,000. The total capacity of the landfill is expected to be 25,000,000 tons of waste. This year c
Debit expense for $2,000,000; credit accrued cost payable for $2,000,000
16. Which of the following are required by GASB standards to be reported in the balance sheet at fair value?
a. Interest-earning investment contracts
b. External investments pools
c. All of the above
d. Open-end mutual funds
All of the above
17. The biggest difference between a private purpose trust fund and a permanent fund is
a. Permanent funds have nonexpendable principles, while private purpose trusts do not
b. Both of the statements are true
c. Private purpose trust funds created to bene
Private purpose trust funds created to benefit a private purpose or individual, while a permanent fund tends to benefit the general public
18. A defined benefit plan is, by definition, noncontributory
a. True
b. False
False
19. Required supplementary information for deferred benefit pensions must be presented for the previous 2 years
a. True
b. False
False
20. The cost of future health care benefits are easier to measure than the cost of future pension benefits and are traditionally more well-funded pensions
a. True
b. False
False