A508 Govt & Nonprofit Ch. 3 Budgetary Accounting
57. When computers are ordered by the mayor's office, the purchase order should be recorded in the General Fund as a debit to: A. Encumbrances. B. Equipment. C. Expenditures. D. Appropriations.
A.
10. Capital assets used by an enterprise fund should be accounted for in the A. Enterprise fund and depreciation on the capital assets should be recorded. B. Business-type activities journal but no depreciation on the capital assets should be recorded. C. Governmental activities journal and depreciation on the capital assets should be recorded. D. Enterprise fund but no depreciation on the capital assets should be recorded.
A.
11. The activities of a water utility department, which offers its services to the general public on a user charge basis, should be accounted for in A. An enterprise fund. B. A special revenue fund. C. The General Fund. D. An internal service fund.
A.
12. The measurement focus and basis of accounting that are most unlike those used by business entities are those used by A. Governmental funds. B. Fiduciary funds. C. Proprietary funds. D. Contribution funds.
A.
13. Which of the following governmental funds must be reported as a major fund? A. The General Fund. B. Any fund with total assets, liabilities, revenues, or expenditures that are 10% or more of the General Fund and 5% or more of total General Fund and Business-type Activities. C. The government may opt to include or exclude any fund it choses as a major fund. D. Only the General Fund and special revenue funds that meet the 10% and 5% size criteria.
A.
14. Which of the following governmental funds must be reported as a major fund? A. The General Fund. B. Any fund with total assets, liabilities, revenues, or expenditures that are 10% or more of the General Fund and 5% or more of total General Fund and Business-type Activities. C. The government may opt to include or exclude any fund it choses as a major fund. D. Only the General Fund and special revenue funds that meet the 10% and 5% size criteria.
A.
15. Which of the following would be reported as a nonspendable fund balance? A. Inventory. B. Restricted assets. C. Assets whose use is limited. D. Capital assets.
A.
18. Which of the following is not a category of program revenue reported on the statement of activities at the government-wide level? A. General program revenues. B. Charges for services. C. Operating grants and contributions. D. Capital grants and contributions.
A.
20. Which of the following items would not appear in a statement of revenues, expenditures, and changes in fund balances prepared for a governmental fund? A. Depreciation expense. B. Interfund transfers in. C. Revenues from property taxes. D. Expenditures for employee salaries.
A.
30. Which of the following is true regarding other financing sources and other financing uses? A. Both must be reported separately from revenues and expenditures in the statement of revenues, expenditures, and changes in fund balances. B. These terms are used to distinguish program revenues or expenses from general revenues or expenses. C. These terms are used for minor revenue or expenditure items that are peripheral to the government's mission. D. Other financing sources are equivalent to gains and other financing uses are equivalent to losses.
A.
31. Which of the following is true regarding other financing sources and other financing uses? A. Both must be reported separately from revenues and expenditures in the statement of revenues, expenditures, and changes in fund balances. B. These terms are used to distinguish program revenues or expenses from general revenues or expenses. C. These terms are used for minor revenue or expenditure items that are peripheral to the government's mission. D. Other financing sources are equivalent to gains and other financing uses are equivalent to losses.
A.
37. When the budget of a government is adopted and Estimated Revenues exceed Appropriations, the excess is: A. Credited to Budgetary Fund Balance. B. Debited to Budgetary Fund Balance. C. Debited to Encumbrances Outstanding. D. Credited to Encumbrances Outstanding.
A.
4. The accrual basis of accounting applicable to proprietary fund types requires that exchange revenues be recognized when A. Earned. B. Collected in cash. C. Authorized by the budget ordinance. D. Measurable and available.
A.
40. The journal entry to record budgeted revenues will include: A. A debit to Estimated Revenues. B. A credit to Estimated Revenues. C. A debit to Revenues Receivable. D. Only a memorandum entry is necessary.
A.
41. The County Commission of Seminole County adopted its General Fund budget for the year ending June 30, comprising estimated revenues of $13,200,000 and appropriations of $12,900,000. Seminole County utilizes the budgetary accounts required by GASB standards. The journal entry to record budgeted appropriations will include: A. A credit to Appropriations, $12,900,000. B. A credit to Encumbrances, $12,900,000. C. A debit to Estimated Expenditures, $12,900,000. D. A credit to Budgetary Fund Balance, $12,900,000.
A.
42. One characteristic that distinguishes other financing sources from revenues is that other financing sources: A. Arise from debt issuances or interfund transfers in. B. Increase fund balances when they are closed at year-end. C. Provide financial resources for the recipient fund. D. Have a normal credit balance.
A.
44. The County Commission of Canyon County adopted its General Fund budget for the year ending June 30, comprising estimated revenues of $13,200,000 and appropriations of $12,900,000. The budgeted excess of estimated revenues over appropriations will be recorded as: A. A credit to Surplus Revenues, $300,000. B. A debit to Estimated Excess Revenues, $300,000. C. A credit to Budgetary Fund Balance, $300,000. D. A memorandum entry only.
A.
47. Which of the following neither increases nor decreases fund balance of the General Fund during the current period? A. Deferred inflows of resources. B. Revenues. C. Expenditures. D. Other financing sources.
A.
53. Which of the following will increase the fund balance of a government at the end of the fiscal year? A. The sum of revenues and other financing sources is more than the sum of expenditures and other financing uses. B. Expenditures are more than the difference between revenues and the excess of other financing sources over other financing uses. C. Revenues are less than the sum of expenditures, other financing sources, and other financing uses. D. The sum of fund balance, revenues, and other financing sources is more than the sum of expenditures and other financing uses.
A.
60. If a state law requires that local governments prepare General Fund and special revenue fund budgets on a basis that differs from the basis of accounting required by generally accepted accounting principles (GAAP): A. The actual amounts in the budgetary comparison schedule should be reported using the government's budgetary basis. B. The actual amounts in the budgetary comparison schedule should be reported on the GAAP basis. C. Both the budgeted and actual amounts in the budgetary comparison schedule should be reported on the GAAP basis; a separate budget-basis comparison schedule should be prepared for the appropriate state oversight body. D. Only a budgetary comparison schedule prepared for the appropriate state oversight body is required.
A.
63. Which of the following items would not appear in a statement of revenues, expenditures, and changes in fund balances prepared for a governmental fund? A. Depreciation expense. B. Interfund transfers in. C. Revenues from property taxes. D. Expenditures for employee salaries.
A.
65. Which of the following is true regarding other financing sources and other financing uses? A. Both must be reported separately from revenues and expenditures in the statement of revenues, expenditures, and changes in fund balances. B. These terms are used to distinguish program revenues or expenses from general revenues or expenses. C. These terms are used for minor revenue or expenditure items that are peripheral to the government's mission. D. Other financing sources are equivalent to gains and other financing uses are equivalent to losses.
A.
66. Which of the following is true regarding other financing sources and other financing uses? A. Both must be reported separately from revenues and expenditures in the statement of revenues, expenditures, and changes in fund balances. B. These terms are used to distinguish program revenues or expenses from general revenues or expenses. C. These terms are used for minor revenue or expenditure items that are peripheral to the government's mission. D. Other financing sources are equivalent to gains and other financing uses are equivalent to losses.
A.
76. When computers are ordered by the mayor's office, the purchase order should be recorded in the General Fund as a debit to: A. Encumbrances. B. Equipment. C. Expenditures. D. Appropriations.
A.
79. Which of the following would properly be reported in the operating statement of a governmental fund? A. Interest on a tax anticipation note issued and repaid during the period. B. Amortization expense. C. Depreciation expense. D. A grant that is intended to finance activities of the following period.
A.
9. Which of the following is a fiduciary fund? A. Investment trust fund. B. Special revenue fund. C. Debt service fund. D. Enterprise fund.
A.
90. Under the consumption method for recording supplies that are maintained on a perpetual inventory system, the adjusting entry made at year end would affect which of the following accounts? A. Fund Balance-Nonspendable-Inventory of Supplies. B. Fund Balance-Restricted-Inventory of Supplies. C. Expenditures. D. Inventory of Supplies.
A.
92. Which of the following types of nonexchange transactions recognize revenue when all the eligibility requirements are met? A. Voluntary nonexchange transactions. B. Imposed nonexchange transactions. C. Derived tax revenues. D. Property tax revenues.
A.
84.The City of Island Grove uses encumbrance accounting and its fiscal year ends on June 30. On May 6, a purchase order was approved and issued for supplies in the amount of $6,000. Island Grove received these supplies on June 2, and the $6,000 invoice was approved for payment. What General Fund journal entry or entries should Island Grove make on June 2, upon receipt of the supplies and approval of the invoice? CHART OF ENTRIES
A. Choice A
2. In accounting for state and local governments the modified accrual basis is required for A. Proprietary and fiduciary funds. B. Governmental funds. C. Governmental and fiduciary funds. D. Governmental and internal service funds.
B.
22. Which of the following is not a budgetary account? A. Encumbrances. B. Encumbrances Outstanding. C. Estimated Revenues. D. Appropriations.
B.
25. Which of the following accounts is a budgetary account of a governmental fund? A. Encumbrances Outstanding. B. Appropriations. C. Expenditures. D. Other Financing Sources.
B.
26. Which of the following accounts is a budgetary account of a governmental fund? A. Encumbrances Outstanding. B. Appropriations. C. Expenditures. D. Other Financing Sources.
B.
28. Which of the following accounts of a government is credited when a purchase order is approved? A. Encumbrances. B. Encumbrances Outstanding. C. Vouchers Payable. D. Appropriations.
B.
32. The expenditure classification "Public Safety" is an example of which of the following types of classifications? A. Activity. B. Function. C. Character. D. Object.
B.
33. When supplies ordered for use in an activity accounted for in the General Fund are received at an actual price that is more than the estimated price on the purchase order, the Encumbrance account is: A. Debited for the estimated price on the purchase order. B. Credited for the estimated price on the purchase order. C. Debited for the actual price for the supplies received. D. Credited for the actual price for the supplies received.
B.
36. The expenditure classification "City Attorney" is an example of which of the following types of classification? A. Function. B. Organization unit. C. Character. D. Program.
B.
38. Which of the following depict the typical order of steps in the acquisition of goods and services by an activity accounted for by the General Fund? A. Appropriation, disbursement, encumbrance, expenditure. B. Appropriation, encumbrance, expenditure, disbursement. C. Encumbrance, appropriation, expenditure, disbursement D. Encumbrance, appropriation, expenditure, disbursement.
B.
48. The expenditure classification "Current Expenditures" is an example of which of the following types of classifications? A. Activity. B. Character. C. Function. D. Object.
B.
51. Under the modified accrual basis of accounting, expenditures generally are not recognized until: A. They are paid in cash. B. An obligation is incurred that will be paid from currently available financial resources. C. Goods or services are ordered. D. They are approved by the legislative body.
B.
52. Which of the following fund types uses the current financial resources measurement focus and modified accrual basis of accounting? A. Enterprise fund. B. Special revenue fund. C. Investment trust fund. D. Pension trust fund.
B.
54. A liability is recorded in governmental funds when: A. Goods or services are ordered. B. Goods or services are received and the invoice is vouchered. C. Invoices are paid. D. The appropriation is reduced.
B.
43. The process by which a legal valuation is placed on taxable property is called: A. An appropriation. B. A property tax levy. C. Property assessment. D. Ad valorem determination.
C.
46. Fund balance may be classified as all of the following except: A. Restricted. B. Committed. C. Uncommitted. D. Assigned.
C.
58. If supplies that were ordered by a department financed by the General Fund are received at an actual price that is less than the estimated price on the purchase order, the department?s available balance of appropriations for supplies will be: A. Decreased. B. Increased. C. Unaffected. D. Either a or b, depending on the department?s specific budgetary control procedures.
B.
59. The Appropriations account of a governmental fund is credited when: A. The budgetary accounts are closed. B. The budget is recorded. C. Supplies are purchased. D. Expenditures are recorded.
B.
6. Financial resources set aside to pay principal and interest on general long-term debt may be accounted for in which of the following fund types? A. Private-purpose trust fund. B. Debt service fund. C. Principal and interest trust fund. D. Internal service fund.
B.
73. A liability is recorded in governmental funds when: A. Goods or services are ordered. B. Goods or services are received and the invoice is vouchered. C. Invoices are paid. D. The appropriation is reduced.
B.
81. Vacation City was awarded a $500,000 federal operating grant for use in Year 2. On December 1 of year 1, half of the grant money was received by the City. The journal entry to record receipt of the grant funds will include: A. A credit to Revenues in the amount of $250,000. B. A credit to Deferred Inflow of Resources- Grant Proceeds in the amount of $250,000. C. A debit to Grant Expenditures in the amount of $250,000. D. No journal entry will be made until expenditures are made in Year 2.
B.
85. Which of the following will require a credit to Fund Balance-Unassigned of a governmental fund when operating statement accounts are closed at the end of the year, assuming there are no other financing sources or uses? A. Revenues are less than expenditures. B. Revenues are more than expenditures. C. Revenues are more than expenditures and encumbrances. D. Revenues are less than expenditures and encumbrances.
B.
88. Equipment acquired several years ago by a capital projects fund and reported in the governmental activities statement of net position at a net book value of $2,000 was sold for $1,000 cash. Cash is collected in the General Fund. Journal entries are necessary in the general journals of the A. General Fund, capital projects fund, and governmental activities. B. General Fund and governmental activities. C. General Fund, capital projects fund, and enterprise fund. D. Capital projects fund and governmental activities.
B.
Cartier Village's capital expenditures during the year ended December 31 included: Equipment for village tax collector's office $40,000 Vehicles for village electric utility $60,000 What amounts should have been recorded in the General Fund and enterprise fund for the increase in equipment during the year ended December 31, assuming the electric utility is considered an enterprise fund? A. General Fund: $0; Enterprise Fund: $0 B. General Fund: $0; Enterprise Fund: $60,000 C. General Fund: $40,000; Enterprise Fund: $60,000 D. General Fund: $100,000; Enterprise Fund: $0
B.
17. Which of the following statements is not a true statement about expenses that are directly related to a government function or program? A. They are reported in the government-wide statement of activities at the government-wide level. B. They include expenses that are specifically associated with a function or program. C. They include interest on general long-term liabilities. D. They include depreciation expense on capital assets that are clearly identified with a function or program.
C.
19. Extraordinary items and special items are reported on the government-wide statement of activities A. With normal recurring general revenues. B. As separate line items in the Function/Programs section of the statement of activities. C. As separate line items below General Revenues in the statement of activities. D. As separate line items above General Revenues.
C.
23. When the budget for the General Fund is recorded, the required journal entry will include: A. A credit to Estimated Revenues. B. A debit to Encumbrances. C. A credit to Appropriations. D. A credit to Fund Balance.
C.
29. The Expenditures control account of a government is debited when: A. The supplies budget is recorded. B. Supplies are ordered. C. Supplies previously encumbered are received. D. The invoice for supplies is paid.
C.
35. The account "Interfund Transfers In" would be classified in a General Fund statement of revenues, expenditures, and changes in fund balance as a(an): A. Revenue. B. Other financing use. C. Other financing source. D. Current liability.
C.
49. Which of the following statements is true regarding the required disclosure of budgetary information? A. All budgetary disclosures should be presented in the notes to the financial statements. B. There is one specific format for presenting the budgetary comparison statement. C. Budgetary comparisons may be presented as a statement or as required supplementary information (RSI). D. The budgetary reconciliation must focus on the operating statement, but not the statement of position.
C.
5. Which of the following funds is a governmental fund-type? A. Private-purpose trust fund. B. Internal service fund. C. Permanent fund. D. Enterprise fund.
C.
50. Which of the following statements is true regarding the required disclosure of budgetary information? A. All budgetary disclosures should be presented in the notes to the financial statements. B. There is one specific format for presenting the budgetary comparison statement. C. Budgetary comparisons may be presented as a statement or as required supplementary information (RSI). D. The budgetary reconciliation must focus on the operating statement, but not the statement of position.
C.
55. Which of the following terms refers to an actual cost rather than an estimate? A. Budget. B. Encumbrance. C. Expenditure. D. Appropriation.
C.
62. The Encumbrances account is properly termed a: A. Long-term liability. B. Reservation of unassigned fund balance. C. Budgetary account. D. Current liability if paid within a year; otherwise, long-term debt.
C.
68. The account "Interfund Transfers In" would be classified in a General Fund statement of revenues, expenditures, and changes in fund balance as a(an): A. Revenue. B. Other financing use. C. Other financing source. D. Current liability.
C.
69. The process by which a legal valuation is placed on taxable property is called: A. An appropriation. B. A property tax levy. C. Property assessment. D. Ad valorem determination.
C.
71. Which of the following statements is true regarding the required disclosure of budgetary information? A. All budgetary disclosures should be presented in the notes to the financial statements. B. There is one specific format for presenting the budgetary comparison statement. C. Budgetary comparisons may be presented as a statement or as required supplementary information (RSI). D. The budgetary reconciliation must focus on the operating statement, but not the statement of position.
C.
72. Which of the following statements is true regarding the required disclosure of budgetary information? A. All budgetary disclosures should be presented in the notes to the financial statements. B. There is one specific format for presenting the budgetary comparison statement. C. Budgetary comparisons may be presented as a statement or as required supplementary information (RSI). D. The budgetary reconciliation must focus on the operating statement, but not the statement of position.
C.
74. Which of the following terms refers to an actual cost rather than an estimate? A. Budget. B. Encumbrance. C. Expenditure. D. Appropriation.
C.
77. The Encumbrances account is properly termed a: A. Long-term liability. B. Reservation of unassigned fund balance. C. Budgetary account. D. Current liability if paid within a year; otherwise, long-term debt.
C.
86. The voters of the city passed an ordinance to increase their sales tax by ¼ percent. The proceeds of the sales tax are to be used for culture and recreation. In the governmental activities journal, how would the ¼ percent sales tax revenue be recorded? A. Program Revenue-Culture and Recreation-Sales Tax. B. Program Revenue-Culture and Recreation-Operating Grants and Contributions. C. General Revenue-Sales Tax. D. General Revenue-Culture and Recreation-Sales Tax.
C.
87. During January 2017 General Fund supplies ordered in the previous fiscal year and encumbered at an estimated amount of $2,000 were received at an actual cost of $2,200. The entry to record this transaction will require a debit to: A. Expenditures-2017 in the amount of $2,200. B. Expenditures-2016 in the amount of $200. C. Expenditures-2017 in the amount of $200. D. Expenditures-2016 in the amount of $2,200.
C.
89. Under the modified accrual basis of accounting, revenues should be recognized when A. Realizable. B. Earned. C. Available. D. Spent.
C.
91. Supplies recorded in the General Fund under the purchases method will initially include a A. Debit to Inventory of Supplies. B. Credit to Fund Balance-Restricted-Inventory of Supplies. C. Debit to Expenditures. D. Debit to Fund Balance-Restricted-Inventory of Supplies.
C.
78. The City of Pringle purchased a vehicle for the police department. If the operations of the police department are financed by general revenues, an asset would be recorded in which journal(s)? CHART
C. Choice C
82. Property taxes due and collectible 90 days after the 2017 fiscal year end would be recorded as revenues in 2017 in which journal? CHART
C. Choice C
64. Which of the following would always be classified as a general revenue? A. Grant proceeds. B. Special assessment charges for snow removal. C. Library fines. D. Fuel taxes earmarked for maintenance of roads and bridges.
D.
1. Which of the following is true regarding financial reporting for internal service funds? A. Internal service funds are reported in the governmental fund financial statements. B. Internal service funds are aggregated and reported as a major fund in the proprietary fund financial statements. C. Internal service funds are generally reported in the Business-type Activities column of the government-wide financial statements. D. Internal service funds are generally reported in the Governmental Activities column of the government-wide financial statements.
D.
16. Which of the following best describes the recommended format for the government-wide statement of activities? A. Program revenues minus expenses minus other revenues and expenses equals change in net position. B. Program revenues plus general revenues minus expenses equals change in net position. C. Program revenues minus expenses plus general revenues equals change in net position. D. Expenses minus program revenues plus general revenues equals change in net position.
D.
21. Which of the following would always be classified as a general revenue? A. Grant proceeds. B. Special assessment charges for snow removal. C. Library fines. D. Fuel taxes earmarked for maintenance of roads and bridges.
D.
24. When the budget of a government is recorded and Appropriations exceeds Estimated Revenues, the Budgetary Fund Balance account is: A. Credited at the beginning of the year and debited at the end of the year. B. Credited at the beginning of the year and no entry is made at the end of the year. C. Debited at the beginning of the year and no entry is made at the end of the year. D. Debited at the beginning of the year and credited at the end of the year.
D.
27. Under the modified accrual basis of accounting used by the General Fund, financial resources are considered available if the revenue or other financing source is expected to be collected A. Within 60 days after year-end. B. Within 90 days after year-end. C. During the current fiscal period. D. During the current fiscal period or a reasonable time after year-end defined by each individual government.
D.
3. Under the modified accrual basis of accounting, revenues should be recognized when A. Earned. B. Collected in cash. C. Authorized by the budget ordinance. D. Measurable and available.
D.
34. A statement of revenues, expenditures, and changes in fund balances-budget and actual is: A. Required by GAAP for the General Fund, special revenue funds, and all other governmental fund types for which an annual budget has been adopted. B. Required by GAAP for internal management reports only; not permitted for external financial reporting. C. Required by GAAP for all governmental fund types. D. Optional under GAAP, as long as a budgetary comparison schedule is presented.
D.
39. When equipment that is to be used by the General Fund is received, how should it be recorded? A. Capital Asset. B. Appropriation. C. Encumbrances. D. Expenditure.
D.
45. When the budget for the General Fund is recorded, the required journal entry will include: A. A credit to Estimated Revenues. B. A debit to Encumbrances. C. A debit to Appropriations. D. Either a debit or credit to Budgetary Fund Balance, as appropriate.
D.
56. For what funds do budgetary comparisons need to be presented in connection with the basic financial statements? A. General Fund. B. General Fund and all major funds. C. All governmental funds with legally adopted annual budgets. D. General Fund and major special revenue funds for which a budget is legally adopted.
D.
61. The Expenditures control account of a government is credited when: A. Supplies are ordered. B. Supplies previously encumbered are received. C. The budget is recorded. D. Temporary accounts are closed out at the end of the year.
D.
67. A statement of revenues, expenditures, and changes in fund balances-budget and actual is: A. Required by GAAP for the General Fund, special revenue funds, and all other governmental fund types for which an annual budget has been adopted. B. Required by GAAP for internal management reports only; not permitted for external financial reporting. C. Required by GAAP for all governmental fund types. D. Optional under GAAP, as long as a budgetary comparison schedule is presented.
D.
7. According to GASB standards transfers should be recognized A. When earned. B. When collected in cash. C. When authorized by the budget ordinance. D. In the period the interfund receivable and payable arise.
D.
70. When the budget for the General Fund is recorded, the required journal entry will include: A. A credit to Estimated Revenues. B. A debit to Encumbrances. C. A debit to Appropriations. D. Either a debit or credit to Budgetary Fund Balance, as appropriate.
D.
75. For what funds do budgetary comparisons need to be presented in connection with the basic financial statements? A. General Fund. B. General Fund and all major funds. C. All governmental funds with legally adopted annual budgets. D. General Fund and major special revenue funds for which a budget is legally adopted.
D.
8. Which of the following is a proprietary fund? A. Special revenue fund. B. Investment trust fund. C. Debt service fund. D. Internal service fund.
D.
80. On May 1, the City of Dustin was notified of approval of a $300,000 federal operating grant, payable on a reimbursement basis as the city expends resources for the intended purpose of the grant. As of May 1, no expenditures had been made for grant purposes. The journal entry to record approval of this grant will include: A. A credit to Revenues in the amount of $300,000. B. A credit to Deferred Inflow of Resources- Grant Proceeds in the amount of $300,000. C. A debit to Grants Receivable in the amount of $300,000. D. No journal entry will be made until expenditures for the authorized purpose occur.
D.
