The following transactions were among those reported by Corfe City's electric utility enterprise fund for the year just ended:
Capital Contributed by subdividers: $ 900,000
Cash received from customer households: $2,700,000
Proceeds from sale of revenue b
B) $5,400,000 (900,000+4,500,000)
Dogwood City's water enterprise fund received interest of $10,000 on long-term investments. How should this amount be report on the statement of cash flows?
a) Operating Activities
b) Noncapital financing activities
c) Capital and related financing activi
D) investing activities
A state or local government must present which financial statements for proprietary funds?
I. A statement of activities
II. A statement in net assets or balance sheet format
III. A statement of cash flows
a) I only
b) I and III only
c) II and III only
d)
C) II and III only
The statement of revenues, expenses, and changes in fund net assets for proprietary funds
a) Combines special and extraordinary items in a subtotal present before nonoperation revenues and expenses
b) Must report revenues at gross amounts, with discounts
C) Distinguishes between operating and nonoperating revenues and expenses
An interfund transfer
a) Is the internal counterpart to an exchange or an exchange-like transaction
b) results in a receivable and a payable
c) Is reported in a proprietary fund's statements after nonoperating revenues and expenses
d) Is reported in a pro
C) Is reported in a proprietary fund's statements after nonoperating revenues and expenses
In a statement of net assets or balance sheet for proprietary funds,
a) Net assets must be reported in two components; restricted or unrestricted
b) Capital contributions must be reported in a separate component of net assets
c) Designations must be shown
D) Assets and liabilities must be classified
A statement of cash flows for proprietary fund
a) is optional
b) Must be prepared using either the direct method or the indirect method
c) Must be prepared using the direct method
d) Need not reconcile operating cash flows to operating income if the direc
C) Must be prepared using the direct method
The summary of significant accounting policies must make which of the following general disclosures?
a) The policy for applying FASB pronouncements issued before November 30, 1989, to business-type activities
b) The policy for defining operating and nonop
B) The policy for defining operating and nonoperating revenues of proprietary funds
Lily City uses a pay-as-you-go approach for funding postemployment benefits other than pensions. The city reports no other post employment benefits (OPEB) liability at the beginning of the year. At the end of the year, Lily City reported the following inf
B) $500,000
The debt service transactions of a special assessment bond issue for which the governement is not obligated in any manner should be reported in a(n)
a) Agency fund
b) Enterprise fund
c) Special revenue fund
d) Debt service fund
A) Agency fund
Glen County uses governmental fund accounting and is the administrator of a multiple jursidiction deferred compensation plan covering both its own employees and those of other governements participating in the plan. This plan is an eligible deferred compe
A) $0
Which of the following is a required financial statement for an investment trust fund?
a) Statement of revenues, expenditures, and changes in fiduciary net position
b) Statement of activities
c) Statement of revenues, expenses, and changes in fiduciary ne
D) Statement of changes in fiduciary net position
Items reported only in the fund financial statements of a general purpose governement are those arising from
a) Proprietary activities
b) Fiduciary activities
c) Exchange-like transactions
d) Nonexchange-like transactions
B) Fiduciary activites
Which financial statements must be reported for fiduciary funds?
I.Statement of fiduciary net assets
II. Statement of changes in fiduciary net assets
III. Statement of revenues, expenditures, and changes in fund balances
IV. Statement of cash flows
a) I a
A) I and II only
River City has a defined contribution pension plan. How should River report the pension plan in it financial statements?
a) Amortize any transition asset over the estimated number of years of current employees service
b) Disclose in the notes to the finan
C) Disclose in the notes to the financial statements amouns attributed to exployee service and forfeitures in the current period
Which of the following is a reporting requirement for agency funds?
a) They should be reported in a statement of fiduciary net assets and a statement of changes in fiduciary net assets
b) Agency fund assets should equal liabilities in the statement of fid
B) Agency fund assets should equal liabilities in the statement of fiduciary net assets
Fiduciary fund financial statements report
a) Information by major fund
b) Three components of net assets
c) A separate column for each fund type
d) No separate statements for individual pension plans
C) A separate column for each fund typle
King City Council will be establishing a library fund. Library fees are expected the cover 55% of the library's annual resource requirements. King has decided that an annual determination of net income is desirable in order to maintain management control
d) Enterprise fund
Roy City received a gift, the principal of which is to be invested in perpetuity with the income to be used to support the local library. In which fund should this gift be recorded?
a) Permanent fund
b) Investment trust fund
c) Private purpose trust fund
a) Permanent fund
What body primarily determines the measurement focus and basis of accounting standards for governmental financial statements?
a) Governemental Accounting Standards Board
b) National Council on Governmental Accounting
c) Governemental Accounting and Auditi
A) Governmental accounting standards board
Governmental financial reporting should provide information to assist users in which situations?
I. Making Social and political decisions
II. Assessing whether current-year citizens received services but shifted part of the payment burden to future year c
C) Both I and II
The statement of activities of the governement-wide financial statements is designed primariliy to provide information to assess which of the following?
a) Operational accountability
b) Financial accountability
c) Fiscal accountability
d) Functional accou
a) Operational accountability
State and local governements report various funds to the extent their activities meet the fund criteria. Governemental funds include
a) Internal service funds
b) Nonexpendable trust funds
c) Enterprise funds
d) Permanent funds
d) Permanent funds
The accounting systems of state and local governemental entities should be organized and operated using which structure?
a) Proprietary fund
b) Fiduciary fund
c) Governemental fund
d) fund
D) Fund
A state or local government may report which fiduciary funds?
a) Private purpose trust funds
b) expendable trust funds
c) Nonexpendable trust funds
d) Permanent funds
A) Private- purpose funds
A local governmental unit may use which of the following types of funds?
Fiduciary Proprietary
a) yes no
b) yes yes
c) no yes
d) no no
B) Fiduciary and Propietary
Cal City maintains several major fund typles. The following were amoung Cal's cash receipts during the current year:
Unrestricted state grant $1,000,000
Interest on bank accounts held for
employees pensions plan $200,000
What amount of these cash receipts
B) $1,000,000
Revenues that are legally restricted to expenditures for specified pruposes should be accounted for in special revenue funds, including
a) Resources accumulated for payment of general long-term debt principal and interest
b) Pension trust fund revenues
c)
C) Gasoline taxes to finance road reparis
Bay Creeks municipal motor pool maintains all city-owned vehicles and charges the various departments for the cost of rendering the maintenance services. In wich of the following funds should Bay account for the cost of such maintenance?
a) General Fun
b)
B) Internal service fund
The follwing equity balanes are among those maintained by Cole City:
Enterprise funds $1,000,000
Internal service funds $400,000
Cole's proprietary equity balances amount to
a) $1,400,000
b) $1,000,000
c) $400,000
d) $0
A) $1,400,000
Kew City received a $15,000,000 federal grant to finance the construction of a center for rehabilitation of drug addicts. The proceeds of this grant should be accounted for in the
a) Special revenue funds
b) General funds
c) Capital projects funds
d) Trus
C) capital projects funds
A state governement had the following activities
I. State-operated lottery
II. State- operated hospital
Which of the above activities may be accounted for in an enterprise fund?
a) Neither I nor II
b) I only
c) II only
d) Both I and II
D) Both I and II
An activity that provides goods to other subunits of the primary government on a cost reimbursement basis should be reported as a(n)
a) Fiduciary fund
b) Agency fund
c) Enterprise fund in some cases
d) Internal service fund in all cases
C) Enterprise fund in some cases
Frants that are to be transferred to a secondary recipients by a local governement should be accounted for in which fund if the government has no administrative or direct involvement in the program?
a) Investment trust fund
b) Private purpose trust fund
c
C) Agency fund
Financial reporting by general purpose governments includes presnetation of MD&A as
a) Required supplementary information after the notes to the finincial statements
b) Part of the basic financial statements
c) A description of currently known facts, deci
c) A description of currently known facts, decisions, or conditions expented to have signficant effect on financial activities
What approach to presentation of the notes to the financial statements has been adopted for financial reporting by state and local governements?
a) The notes are essential for fair presentation of the statements
b) The notes are required supplementary inf
A) The notes are essential for fair presentation of the statements
Budgetary comparison schedules presented by a state or local governement must
a) Be reported for the general fund and each major special revenue fund with a legally adopted budget
b) Be presented instead of budgetary comparison statements included in the
A) Be reported for the general fund and each major special revenue fund with a legally adopted budget
Users of a governemnts financial statements should be able to distinguish between the primary governement and its component units. Furthermore, an overview of the discretely presented component units should be provided. Accordingly,
a) The government-wide
C) Information about each major componenet unit must be provided in the reports entity's basic statements
How should state appropriations to a state university choosing to report as engaged only in business-type activities be reported in its statement of revenues, expenses and changes in net position
a) Operating revenues
b) Nonoperating revenues
c) Capital c
B) Nonoperating revenues
Which of the following statements are required to be presented for special purpose governements engaged only in business type activities (such as utilities)?
a) Statement of net position only
b) Management's discussion and analysis (MD&A) and required sup
D) The financial statements required for enterprise funds, including MD&A and RSI
If a city government is the primary reporting entity, which of the following is an acceptable method to present component unites in its combined financial statements?
a) Consolidation
b) Cost method
c) Discrete presentation
d) Government-wide presentation
C) Discrete presentation
Which financial statement must be presented for governmental funds?
a) A statement of activities
b) A statement of cash flows
c) A statement of revenues, expenses, and changes in fund net assets
d) A financial statement in balance sheet format
D) A financial statement in balance sheet format
Tott City's serial bonds are serviced through a deby service fund with cash provided by the general fund, In the financial statements of the governmental funds, how are cash receipts and cash payments reported?
Cash Receipts Cash payments
a) Revenues Expe
C) Interfund transfers for cash receipts and Expenditures for cash payments
Wood City, which is legally obligated to maintain a debt service fund, issued the following general obligation bonds on July 1:
Term of bonds: 10 years
Face amount: $1,000,000
Issue Price: 101
Stated interest rate: 6%
Interest is payable January 1 an July
D) $0
Dale City is accumulating finanial resources that are legally restricted to payments of general long-term deby principal and interest maturing in future years. At December 31 of the current year, $5,000,000 has been accumulated for principal paymens, and
D) $5,300,000 debt service fund, $0 general fund
The focus of certain fund financial statements is on major funds. Accordingly,
a) Major internal service funds must be presented separately in the statement of net assets for proprietary funds
b) The main operating fund is always reported as a major fund
B) The main operating fund is always reported as a major fund
A fund must be reported as major if
a) total assets of that fund are at least 10% of the total assets of all governemental funds
b) Total expenditures of that fund are at least 10% of the total expenditures of all governmental funds and enterprise funds c
C) Total liabilities of that fund are 10% of the total liabilities of all governmental funds and 5% of the total liabilities of all governmental and enterprise funds combined
A statement of revenues, expenditures, and changes in fund balances must be reported for governmental funds. In that statements,
a) Debt refundings are treated as extraordinary items
b) Revenues are classified, at a minimum, by function
c) Proceeds of lon
c) Proceeds of the long-term debt should be reported in the other financing sources and uses classification
Brandon County's general fund had the following transations during the year
Transfers to a debt service fund $100,000
Payment to a pension trust fun $500,000
Pruchase of equipment $300,000
What amount should Brandon County report for the general fund as o
A) $100,000
How should a city's general fund report the acquisition of a new police car in its governmental fund statement of revenues, expenditures, and changes in fund balances?
a) Noncurrent asset
b) Expenditure
c)Expense
d) Property, Plant and Equipment
B) Expenditure
In which of the following fund types of a city governement are revues and expenditures recognized on the same basis of accounting as the general fund?
a) Private purpose trust
b) Internal service
c) Enterprise
d) Debt service
D) Debt service
A major exception to the general rule of expenditure accrual for governmental funds of a state or local government relates to unmatured
I. Principal of general long term debt
II. Interest on general long term debt
a) Both I and II
b) Only I
c) Only II
d)
A) Both I and II
When a snowplow purchased by a governmental unit is received, it should be recorded in the general fund as a(n)
a) Encumbrance
b) Expenditure
c) General Capital asset
d) Appropriation
B) Expenditure
Governmental expenditures for insurance extending over more thanone accounting period
a) Must be accounted for as expenditures of the period of acquisition
b) Must be accounted for as expenditures of the periods subsequent to acquisition
c) Must be alloca
d) may be allocated between or among accounting periods or may be accounted for as expenditures of the period of acquisition
Government wide financial statements are prepared using the
I. Economic Resources Measurement focus
II. Current Financial Resources Measurements Focus
III. Accrual Basis
IV. Modified accrual basis
a) I, and III
b) II and IV
c) I and IV
d) II and III
A) I and III
Proprietary fund financial statements are prepared using the
I. Economic Resources Measurement focus
II. Current financial resources measurement focus
III. Accrual Basis
IV. Modified accrual basis
a) I and III
b) II and IV
c) I and IV
d) II and III
A) I and III
Liabilities of a definded benefit pensionplan for benefits and refunds are reported in a state or local goverments fiduciary fund financial statements using the
I. Economic Resources Measurement focus
II. Current financial resources measurement focus
III.
A) I and III
Which of the following fund types used by a government most likely would have a fund balace designated as nonspendable because of an increase in an inventory of supplies?
a) General
b) Internal service
c) Private purpose trust
d) Capital projects
a) General
Which of the following funs of a governmental unit recognzies revenues in the accounting period in which they become available and measureable
I. General Fund
II. Enterprise fund
a) I only
b) II only
c) both I and II
d) Neither I or II
A) I only
In which situations are property taxes due to a governmental unit recorded as deferred revenue?
I. Property taxes receivable are recognized in advance of the year for which they are levied
II. Property taxes receivable are collected inadvance of the year
b) Both I and II
A public school district should recognize revenue from property taxes levied for its debt service fund when
a) Bonds to be retired by the levy are due and payable
b) Assessed valuations of property subject to the levy are known
c) Funds from the levy are
c) Funds from the levy are measurable and available to the districts
Governmental fund financial statements are prepared using the
I. Economic Resources Measurement focus
II. Current financial resources measurement focus
III. Accrual Basis
IV. Modified accrual basis
a) I and III
b) II and IV
c) I and IV
d) II and III
B) II and IV