CH. 4

Short-term loans which are backed by the taxing power of the governmental unit and used to meet working capital requirements are called: A. Appropriation loan. B. Inter-fund loans. C. Other financing sources. D. Tax anticipation notes.

D

Short-term loans which are backed by the taxing power of the governmental unit and used to meet working capital requirements are called: A) Appropriation loan. B) Inter-fund loans. C) Other financing sources. D) Tax anticipation notes.

D

When closing out the General Fund and Special Revenue Funds of a state or local governmental unit, the balance of the operating statement are closed to: A. Budgetary Fund Balance - Reserved for Encumbrances. B. Appropriations Control. C. Other Financing Sources - Transfer Out. D. Fund Balance.

D

Which of the following General Fund accounts would NOT be closed at year end? A. Encumbrances B. Appropriations C. Other Financing Sources- Transfer In D. Fund Balance

D

Which of the following General Fund accounts would be closed at year end? A. Due from State Government. B. Deferred Inflows- Property Taxes. C. Estimated Uncollectible Taxes. D. Other Financing Uses- Transfers Out.

D

Which of the following is TRUE regarding the use of Special Revenue Funds? A. Special Revenue Funds are used whenever a government wishes to segregate income for specific purposes. B. Special Revenue Funds are appropriate if the sole source of resources are assigned funds. C. Once a Special Revenue Fund is established, it will continue to be a Special Revenue Fund until all resources are exhausted, even if the only source of funds is transfers from the General Fund. D. Special Revenue Funds are used when a substantial portion of the resources are provided by restricted or committed revenue sources.

D

Which of the following is an interfund transaction? A. Interfund services provided and used. B. Interfund transfers. C. Interfund loans. D. All of the choices are interfund transactions.

D

General Fund resources were expended in the amount of $185,000 to purchase a new fire truck. The General Fund would debit: A. Expenditures Control. B. Capital assets- Motor Vehicles. C. Expenditures Control; and Capital assets- Motor Vehicles. D. None of the choices; no entry is made in the General Fund when a motor vehicle is purchased because only current financial resources are recorded in the General Fund.

A

The asset, equipment, used by a department accounted for by the General Fund of a governmental unit should be reported in the: A. Government-wide statements. B. General Fund. C. Government-wide statements; and General Fund. D. None of the choices.

A

The journal entry to record the re-establishment of encumbrances that were outstanding at the close of the prior period would include: A. A credit to Budgetary Fund Balance- Reserve for Encumbrances. B. A debit to Budgetary Fund Balance- Reserve for Encumbrances. C. A credit to Encumbrance Control. D. A credit to Budgetary Fund Balance- Reserve for Encumbrances; and a debit to Budgetary Fund Balance- Reserve for Encumbrances.

A

Under the modified accrual basis of accounting, revenues are recognized when measurable and: A. Available. B. Collected. C. Earned. D. Expenditures have been made.

A

When supplies ordered by a governmental unit are received at an actual price which is less than the estimated price on the purchase order, the Encumbrance Control account is: A. Credited to the original estimated price. B. Credited for the actual price for the supplies. C. Debited for the original estimated price for the supplies. D. Debited for the actual price on the purchase invoice.

A

Expenditures are generally recorded and fund liabilities are recognized: A. When goods and services are received, but only if resources are available in the fund. B. When goods and services are received, regardless of whether or not resources are available in the fund. C. When purchase orders are issued, regardless of whether or not resources are available in the fund. D. When goods and services are received, but only if they are expected to be paid before the end of the fiscal year.

B

Indicate which of the following use Modified Accrual Accounting? 1) Capital Projects Fund, 2) Government-wide Financial Statements, 3) Special Revenues Fund, 4) Internal Service Fund A. No; Yes; No; Yes B. Yes; No; Yes; No C. Yes; No; Yes; Yes D. Yes; Yes; No; Yes

B

Moving cash from the General Fund to a debt service fund for payment of bond interest is an example of an (an): A) Interfund loan. B) Interfund transfer. C) Interfund reimbursement. D) Quasi-external transaction.

B

Regarding inter fund transactions, which of the following is NOT correct? A. Transactions between funds are not assumed to be arm's length in nature. B. Interfund transactions must be repaid. C. Failure to properly report inter fund transactions will result in two funds being misstated. D. Interfund reimbursement is a payment by one fund to second fund to repay it for a purchase which belongs in the first fund.

B

The journal entry to record an encumbrance would include: A. A debit to Budgetary Fund Balance- Reserve for Encumbrances. B. A credit to Budgetary Fund Balance- Reserve for Encumbrances. C. A debit to Appropriations Control. D. A credit to Encumbrance Control.

B

The journal entry to record the budget of a Special Revenue Fund would include: A. No entry; Special Revenue Funds do not record budgets. B. A debit to Estimated Revenues Control. C. A credit to Estimated Revenues Control. D. A debit to appropriations Control.

B

When recording property taxes, the estimated uncollectible amount of property tax is: A. Recognized as an expenditure. B. Recognized as a reduction of revenue. C. Not recognized. D. None of the choices.

B

Governmental fund financial statements are to be prepared on the: A. Accrual basis of accounting. B. Cash basis of accounting. C. Modified accrual basis of accounting. D. Tax basis of accounting.

C

Interfund services purchased by the General Fund from an internal service fund are recognized by the General Fund as: A. Transfers Out. B. Decreases in Fund Balance. C. Expenditures. D. Revenue.

C

The City of Akron increased its revenue budget by $75,000 and the appropriation for the Public Works Department was increased by $100,000. What is the journal entry to record this event in the General Fund? A. Debit: Estimated Revenues Control for $75,000, Debit: Fund Balance for $25,000, and Credit: Appropriations Control for $100,000. B. Debit: Appropriations Control for $100,000, Credit: Estimated Revenues Control for $75,000, and Credit: Budgetary Fund Balance for $25,000. C. Debit: Estimated Revenues Control for $75,000, Debit: Budgetary Fund Balance for $25,000, and Credit: Appropriations Control for $100,000. D. Debit: Estimated Revenues Control for $75,000, and Credit: Appropriations Control for $75,000.

C

The journal entry to write off an uncollectible property tax received for a municipality would include: A. A debit to Estimated Uncollectible Taxes. B. A credit to Taxes Receivable. C. Both a debit to Estimated Uncollectible Taxes and a credit to Taxes Receivable be included in the journal entry. D. Neither a debit to Estimated Uncollectible Taxes nor a credit to Taxes Receivable be included in the journal entry.

C

Under the modified accrual basis of accounting, property taxes are recorded as deferred inflows if expected to be collected: A. After fiscal year end. B. More than 90 days after fiscal year end. C. More than 60 days after fiscal year end. D. More than 30 days after fiscal year end.

C

Which of the following is TRUE regarding modified accrual accounting? A. Revenues are recognized when measurable and available to finance expenditures of the current period. B. Expenditures are generally recognized as the related goods or services are received. C. Revenues are recognized when measurable and available to finance expenditures of the current period; and expenditures are generally recognized as the related goods or services are received. D. None of the choices.

C