learnsmart chpt 4

The city of Valley Ridge has a special fund with a total fund balance at year-end of $180,000. State law requires that 80% of the balance be used for public works services. The other 20% of the funds were supplemented by the city and have no restrictions. How should the Fund Balance be reported? Multiple choice question. $144,000 as Restricted Fund Balance and $36,000 as Assigned Fund Balance $144,000 as Restricted Fund Balance and $36,000 as Unassigned Fund Balance $180,000 as Restricted Fund Balance $180,000 as Assigned Fund Balance

$144,000 as Restricted Fund Balance and $36,000 as Assigned Fund Balance

At year end, the City of Valley Ridge has a total of $90,000 of outstanding property taxes due. It is estimated that $40,000 of the total will be collected within 30 days of year end, another $20,000 within 60 days of year end, and another $18,000 within 90 days of year end. The required year-end entry includes a debit to Revenues Control for ______.

$30,000 Reason: $90,000 - $40,000 - $20,000 = $30,000 not expected to be collected within 60 days of year-end.

At year end, the City of Valley Ridge has a total of $90,000 of outstanding property taxes due. It is estimated that $40,000 of the total will be collected within 30 days of year end, another $20,000 within 60 days of year end, and another $18,000 within 90 days of year end. The required year-end entry includes a debit to Revenues Control for ______. Multiple choice question. $12,000 $30,000 $18,000 $90,000 $50,000

$90,000 Reason: $90,000 - $40,000 - $20,000 = $30,000 not expected to be collected within 60 days of year-end.

The City of Valley Ridge expects that $40,000 of 2019 property taxes will be collected in March, 2020. The $40,000 should be recorded as a(n) revenue in ______. 2020 2019

2020

GASB standards require that taxes expected to be collected later than ______ days after year-end be deferred and recognized as revenue in the following year. Multiple choice question. 120 60 90 30

60

Select all that apply The city of Valley Ridge records all purchase orders as encumbrances. Assume a purchase order was issued for $85,000 worth of goods and the invoice that arrived with the goods was for $86,000. Which of the following statements are correct? Multiple select question. Accounts Payable will be credited for $86,000. The government will recognize a loss on the transaction. Expenditure Control will be debited for $85,000. Encumbrances Control will be credited for $85,000

Accounts Payable will be credited for $86,000. Encumbrances Control will be credited for $85,000

The City of Valley Ridge has a special fund with a total fund balance at year end of $150,000. Of that amount, $15,000 of the resources may be used for any purpose and the rest must be used for road repairs and maintenance. The city must report $135,000 as a(n) Fund Balance and $15,000 as a(n) Fund Balance.

Blank 1: Restricted Blank 2: Assigned

The expenditure equals the amount of supplies used during the year when a government uses the (blank) method.

Blank 1: consumption

The entry to record re-establishment of prior year encumbrances requires a (debit/credit) to Budgetary Fund Balance - Reserve for Encumbrances and a (debit/credit) to Encumbrances Control (Prior Year).

Blank 1: credit Blank 2: debit

Motor fuel taxes are considered a(n) (blank) tax revenue.

Blank 1: derived

Interfund reimbursements represent repayments to the funds that initially recorded (blank) or (blank) by the funds responsible.

Blank 1: expenditures or expenditure Blank 2: expenses or expense

Within the governmental funds, the excess of assets over liabilities is termed (blank) (blank)

Blank 1: fund Blank 2: balance

According to the modified accrual basis of accounting, revenues are recognized when they are both (blank) and (blank) to finance the expenditures of the current period.

Blank 1: measurable Blank 2: available

The General Fund and special revenue funds report using the current financial resources measurement focus and include (blank) , (blank) , and fund balance.

Blank 1: revenues or revenue Blank 2: expenditures

Transactions or events that are either unusual or infrequent but within the control of management are called (blank) (blank).

Blank 1: special Blank 2: items

Specific revenue sources that are restricted or committed to expenditure for a specific purpose other than debt service or capital projects are accounted for and reported in (blank) (blank) funds.

Blank 1: special Blank 2: revenue

When it is desirable to provide separate reporting of resources that are restricted or committed to expenditure for a specified purpose other than debt service or capital projects, a(n) (blank) (blank)fund may be used.

Blank 1: special Blank 2: revenue

Select all that apply In the middle of the fiscal year, the City of Valley Ridge determined that budgeted revenues should be increased by $40,000 and budgeted appropriations should be increased by $30,000. The entry to adjust the budget include credits to ______. Multiple select question. Budgetary Fund Balance Estimated Revenue Control Appropriations Control

Budgetary Fund Balance Appropriations Control

Select all that apply Which of the following statements are correct? Multiple select question. Budgetary accounts do not appear in the general purpose financial statements. Budgetary accounts facilitate the preparation of the Budgetary Comparison Schedule. Most governments do not record budgets. GASB requires governments to record encumbrances, but not budgets.

Budgetary accounts do not appear in the general purpose financial statements. Budgetary accounts facilitate the preparation of the Budgetary Comparison Schedule.

The city of Valley Ridge uses an internal service fund to centralize purchasing and distribution services among departments. The General Fund received $50,000 of supplies on May 15, which were paid for on June 1. Which of the following statements is correct? Multiple choice question. Expenditures Control should be credited on May 15. Cash should be credited on June 1. Due to Other Funds (Supplies Fund) should be credited on June 1.

Cash should be credited on June 1.

The city of Valley Ridge uses an internal service fund to centralize purchasing and distribution services among departments. The General Fund received $50,000 of supplies on May 15, which were paid for on June 1. Which of the following statements is correct? Multiple choice question. Expenditures Control should be debited on June 1. Advances from Supplies Fund should be debited on May 15. Due to Other Funds (Supplies Fund) should be credited on May 15.

Due to Other Funds (Supplies Fund) should be credited on May 15.

Select all that apply The city of Valley Ridge records all purchase orders as encumbrances. Assume a purchase order was issued for $85,000 worth of goods and the invoice that arrived with the goods was for $86,000. Which of the following statements are correct? Multiple select question. Encumbrances Control will be credited for $85,000 Accounts Payable will be credited for $86,000. The government will recognize a loss on the transaction. Expenditure Control will be debited for $85,000.

Encumbrances Control will be credited for $85,000 Accounts Payable will be credited for $86,000.

In the middle of the fiscal year, the City of Valley Ridge determined that budgeted revenues should be increased by $40,000 and budgeted appropriations should be increased by $30,000. The entry to adjust the budget includes a debit to ______. Multiple choice question. Estimated Revenue Control Budgetary Fund Balance Appropriations Control

Estimated Revenue Control

Which of the following statements are correct? Multiple select question. Failure to report interfund transactions results in two funds being misstated. Transactions between funds of the same government may be assumed to be arm's length in nature. Most interfund transactions are eliminated in the government-wide statements.

Failure to report interfund transactions results in two funds being misstated. Most interfund transactions are eliminated in the government-wide statements.

All financial resources not accounted for and reported in another fund are accounted for in the ______ fund. Multiple choice question. special revenue service permanent capital projects general

General

Select all that apply Which of the following other revenue items are recognized on the cash basis? Multiple select question. Sales tax due from another government Licenses and permit fees Charges for services Fines and forfeits

Licenses and permit fees Charges for services Fines and forfeits

Interfund services provided and used are sometimes called(blank) - (blank) transactions.

Quasi- External

In August of 2019, the City of Valley Ridge received a state awarded grant of $750,000 to update four of the city's schools. Funds are released as work is completed, as a reimbursement. During 2019, expenditures of $440,000 were made by the City and $380,000 were paid. The amount of State Reimburse Grant Revenue recorded by the City of Valley Ridge for 2019 equals ______. Multiple choice question. $750,000 $440,000 $380,000

Reason: Grant revenues and receivables are recognized at the same time that expenditures are incurred. $440,000

Select all that apply The City of Valley Ridge has unrecorded interest and penalties on delinquent taxes of $17,500 but only expects to collect $14,230 of the total. Which of the following statements are correct? Multiple select question. Interest and Penalties Receivable on Taxes should be debited for $14,230 Revenues Control should be credited for $14,230 Revenues Control should be credited for $17,500 Interest and Penalties Receivable on Taxes should be debited for $17,500

Revenues Control should be credited for $14,230 Interest and Penalties Receivable on Taxes should be debited for $17,500

Which of the following other revenue items is NOT recognized on the cash basis? Multiple choice question. Fines and forfeits Licenses and permit fees Sales tax due from another government Charges for services rendered

Sales tax due from another government

When current property taxes are paid, an entry is made to debit Cash and credit ______. Multiple choice question. Taxes Receivable Taxes Payable Revenue Control

Taxes Receivable

Select all that apply The City of Valley Ridge sold a piece of land for $56,000. Which of the following statements are true? Multiple select question. This transaction qualifies as an extraordinary item. The reduction in land is reported on the government-wide financial statements. This transaction qualifies as a special item. The land needs to be removed from the General Fund's assets.

The reduction in land is reported on the government-wide financial statements. This transaction qualifies as a special item.

Which of the following Fund Balance categories is only used in the General Fund? Multiple choice question. Unassigned Committed Restricted Assigned Nonspendable

Unassigned

Revenue earned for penalties and interest on delinquent taxes should be ______. Multiple choice question. accrued at the gross amount due only recorded when the cash is received accrued net of estimated uncollectible amounts

accrued net of estimated uncollectible amounts

Interest and penalties on delinquent taxes ______ treated as revenue. Multiple choice question. are not are

are

At year-end, outstanding purchase orders for supplies will be in the _______ fund balance category. Multiple choice question. unassigned assigned committed restricted nonspendable

assigned

When recording the budget, the Budgetary Fund Balance account will normally ______. Multiple choice question. not be included in the journal entry be credited be debited

be credited

Supplies inventory is debited when supplies are acquired under the consumptionBlank 1Blank 1 consumption , Correct Unavailable method.

consumption

Select all that apply The city of Valley Ridge ordered $40,000 supplies at the end of 2018 that were recorded as Encumbrances. An additional $70,000 worth of supplies were ordered and recorded as Encumbrances during the first week of January 2019. On January 18th, all items were received along with an invoice in the amount of $108,500. Recording the receipt of the supplies requires a ______. Multiple select question. credit to Accounts Payable for $108,500 credit to Encumbrances Control for $110,000 credit to Revenue Control for $1,500 debit to Budgetary Fund Balance - Reserve for Encumbrances Control for $108,500 debit to Expenditures Control for $70,000

credit to Accounts Payable for $108,500 credit to Encumbrances Control for $110,000

Select all that apply The city of Valley Ridge paid $155,000 to repay a $150,000 tax anticipation note and $5,000 of interest. Items in the journal entry to record this transaction include a ______. Multiple select question. credit to Cash for $155,000 debit to Tax Anticipation Notes Payable of $155,000 debit to Expenditure Control for $5,000 credit to Tax Anticipation Notes Revenue for $150,000

credit to Cash for $155,000 debit to Expenditure Control for $5,000

When payroll is recorded, Wages Payable is ______ pay. Multiple choice question. credited for the gross debited for the gross debited for the net credited for the net

credited for the net

The entry to record the budget includes a (debit/credit) (blank) to Estimated Revenues Control and a (debit/credit) (blank) to Appropriations Control.

debit credit

When the city of Valley Ridge records payroll, Expenditures Control is ______. Multiple choice question. credited for the employee share of payroll taxes debited for the employer share of payroll taxes debited for the same amount that Wages Payable is credited

debited for the employer share of payroll taxes

At 2019 year end, a city has $50,000 if outstanding property taxes that are not expected to be collected until 90 days after year end. This $50,000 will be classified as a ______ on the balance sheet. Multiple choice question. liability current Property Tax receivable deferred inflow of resources

deferred inflow of resources

At 2019 year end, a city has $50,000 if outstanding property taxes that are not expected to be collected until 90 days after year end. This $50,000 will be classified as a ______ on the balance sheet. Multiple choice question. liability deferred inflow of resources current Property Tax receivable

deferred inflow of resources

The City of Valley Ridge received a state awarded grant to update four of the city's schools. Funds are released as work is completed, as a reimbursement. This represents a(n) (Blank) requirement under GASB revenue recognition standards. (Enter only one word per blank.)

eligibility

True or false: GASB requires governments to record budgets, but not encumbrances. True false question. True False

false

True or false: Long-term interfund loans are recorded in the accounts Due from Other Funds and Due to Other Funds.

false

Interfund transfers are classified as either other (blank) sources or uses.

financing

Select all that apply Special revenue funds cannot be used to provide separate reporting of resources ______. Multiple select question. for debt services restricted or committed to specific purpose reserved for capital projects

for debt services reserved for capital projects

When recording the current property tax levy, taxes receivable should be debited for the ______. Multiple choice question. amount expected to be collected (net of estimated uncollectible taxes) full amount of the levy amount estimated to be collected within 60 days after year-end

full amount of the levy

Under modified accrual accounting, revenues from derived tax revenues are recognized ______. Multiple choice question. in the same year the underlying transaction takes place when the cash from the tax is actually received when the tax amount for the year is levied

in the same year the underlying transaction takes place

Transactions between the General Fund and a Debt Service Fund are referred to as (blank) transactions.

interfund

Borrowing and repaying the principal and interest on a tax anticipation note ______. Multiple choice question. involves the recognition of an expenditure only involves the recognition of a revenue only involves the recognition of both revenue and an expenditure does not involve the recognition of either a revenue or an expenditures

involves the recognition of an expenditure only

Under the modified accrual basis of accounting, revenue is recognized when ______. Multiple choice question. transactions that result in revenue have taken plan it is either measurable or available it is measurable and available cash has been received

it is measurable and available

A government has outstanding purchase orders at the end of the year that will be honored at the beginning of the following year. As such, the encumbrances for those purchase orders ______ Multiple choice question. must be re-established at the beginning of the new year may be ignored in the new year will not be closed out at the end of the old year

must be re-established at the beginning of the new year

If a fund has no supplies or prepaid items at the end of the year, the ______ fund balance category will have a zero balance.

nonspendable

Resources provided under trust agreements that are restricted so that only earnings may be expended for public benefit purposes are accounted for in (blank) funds.

permanent

Revenue for property taxes is recognized at the time the ______. Multiple choice question. receivable is recorded payment is received

receivable is recorded

Estimated Uncollectible Taxes are ______. Multiple choice question. never recorded recorded at the time taxes become delinquent recorded at the time of tax levy

recorded at the time of tax levy

Estimated Uncollectible Taxes are ______. Multiple choice question. recorded at the time taxes become delinquent recorded at the time of tax levy never recorded

recorded at the time of tax levy

Select all that apply Interfund loans are ______. Multiple select question. netted on the balance sheets of the affected funds recorded based on the terms of the loan to be repaid in the future

recorded based on the terms of the loan to be repaid in the future

Short-term tax anticipation loans are ______. Multiple choice question. reflected as fund liabilities for modified accrual basis accounting funds never reflected as fund liabilities only reflected as fund liabilities if the fund uses accrual basis accounting

reflected as fund liabilities for modified accrual basis accounting funds

Two funds will record entries involving Cash and either expense or expenditure in the case of interfund ______. Multiple choice question. loans transfers services provided and used reimbursements

reimbursements

When delinquent taxes are written off, the tax bills are ______ Multiple choice question. discarded retained in the files, but are no longer subject to general ledger control retained in the files and are still subject to general ledger control

retained in the files, but are no longer subject to general ledger control

One fund records a revenue and the other fund records an expense in the case of interfund ______. Multiple choice question. nonreciprocal transactions reimbursements transfers loans services provided and used

services provided and used

Select all that apply Government-type funds record ______. Multiple select question. short-term payables capital assets long-term obligations short-term receivables

short-term payables short-term receivables

Select all that apply Special revenue funds are commonly used for ______. Multiple select question. fiduciary funds tax proceeds for specific activities government grants capital projects resources

tax proceeds for specific activities government grants

Expenditures is debited and Supplies Inventory is credited when supplies are used under ______. Multiple choice question. neither the purchases nor consumption methods both the purchases and consumption methods the purchases method only the consumption method only

the consumption method only

Multiple Choice Question Tax anticipation loans are recorded as fund liabilities because ______. Multiple choice question. funds uses the accrual basis of accounting the receipt of tax revenue is not guaranteed the loans are short-term

the loans are short-term

Select all that apply When delinquent taxes are deemed to be uncollectible, ______. Multiple select question. Taxes Receivable is credited for the full amount due, including interest and penalties the tax bills are retained in the files for possible future payment Expenditures is debited for the amount of uncollectible taxes only the tax bills are no longer subject to general ledger control

the tax bills are retained in the files for possible future payment the tax bills are no longer subject to general ledger control

Penalties and interest on delinquent taxes should be accrued when ______. Multiple choice question. they become delinquent the taxpayer pays the amount is estimated at the time of the tax levy they become delinquent and when the taxpayer pays

they become delinquent and when the taxpayer pays

Flows of cash or other assets without a requirement for repayment are interfund ______. Multiple choice question. reimbursements transfers reciprocal transactions services provided and used loans

transfers