ACCT 4030
A governmental unit imposed income tax on its residents on December 31, 20X0. Payments were received between January 15 and March 15 of 20X1. The governmental unit reports income tax revenue in ______.
20X0
According to NCGA Interpretation No. 3, property taxes must be collectible within a maximum of _____ days after the end of the current fiscal period to be recognized as revenue in that period.
60
Which of the following is NOT a category in which expenditures are classified?
amount
he ESTIMATED REVENUES CONTROL account is a(n) _________ asset.
anticipatory
Originating in the operating budget, ________ is always the starting point for making all expenditures.
appropriations
Interfund services provided and used ______.
are often normal and recurring items usually involve at least one proprietary fund
When inventory is shown on the balance sheet it should ______.
be shown as both an asset and reservation of fund balance
Revenue is recognized under the current financial resources measurement focus and the modified accrual basis of accounting in the period in which it is ______ to finance expenditures made during the current fiscal period.
both measurable and available
Which of the following is NOT a category in which expenditures are classified?
branch of government
Government funds with legally adopted budgets ______.
can easily assess management's stewardship of the entity are required to compare budgeted to actual amounts as part of RSI
Information about proposed construction projects is provided in a(n) _______ budget
capital
Miscellaneous revenues such as license fees and fines are generally recorded as revenue when the ______.
cash is received
GASB 54 ______.
does not report any reserves of fund balance on the balance sheet includes encumbrances as part of the spendable fund balance
Which of the following is NOT a type of interfund activity established by GASB 34?
donations
Income is considered available when it is Blank______.
due or past due and is collectible within the current period expected to be collected soon enough after year-end to be used to pay current-period liabilities
Fiduciary trust funds use the ______.
economic resources measurement focus accrual basis of accounting
A reservation of part of the budgetary appropriation that is recognized at the time an order is placed for goods or services is called a(n) _____ .
encumbrance
When a capital asset is acquired by the general fund, the ______.
entire amount is recognized as an expenditure in the year acquired
Payments local governments are authorized to receive as determined by the federal government are called _________
entitlements
A grant made to reimburse a governmental unit for expenditures made in accordance with legal requirements should be recognized when all eligibility requirements have been met and the _____.
expenditure is made
GASB 31 establishes a general rule of ______ valuation for investments held by a governmental entity
fair market
GASB 54 requires governments to ______.
footnote the aggregate amount of encumbrances
Proprietary funds ______.
have a management focus of income determination accrue interest on long-term debt recognize and depreciate long-term assets
For governmentwide financial statements, governments should capitalize works of arts at ______.
historical cost at acquisition and fair value when received as a contribution
Interest on investments or delinquent property taxes accrued is accrued in the period in which the ______.
income is available to finance that period's expenditures income is earned
The APPROPRIATIONS CONTROL account is an anticipatory liability as the governmental unit anticipates ______.
incurring expenditures and liabilities for the budgeted amount
When a state takes custody of private property because the legal owner cannot be found, revenue ______ recognized by the state.
is
The general fund transfers $100,000 to a capital projects fund to help finance net construction. The $100,000 ______ the capital projects fund.
is a Transfer In to
The general fund transfers $100,000 to a capital projects fund to help finance net construction. The $100,000 ______ the general fund.
is a Transfer Out from
Nonexchange transactions include revenue from the Blank______.
levying of corporate taxes
Agency funds report ______.
liabilities assets
The flows that should be recorded for operations are referred to as the ________ focus.
measurement
NCGA 1 states that inventory should ______.
only be reported on the fund's balance sheet if it is material
According to GASB 31, investments in which of the following will be accounted for using fair value?
open-end mutual funds equity securities debt securities
Measurement focus refers to the flows of economic and financial resources that are to be measured for ______.
operations
A state government collected sales taxes that are measurable and available for expenditure. The taxes are to be distributed to cities within the state. The recipient cities recognize the revenue ______.
prior to receipt
When a governmental fund issues bonds, the ______.
proceeds are reported as an other-financing source proceeds are not revenue because the bonds must be repaid bonds are reported on the governmentwide financial statements
Government operations that have a management focus of income determination and capital maintenance establish a(n) __________ fund.
proprietary
The entire expenditure for inventory is recognized in the period the supplies are acquired under the ____________ method.
purchase
outstanding interfund loans or advances must be shown on the balance sheet as ______.
receivables or payables
The general fund of a state government spent $200,000 on works of art for a museum located in the state capital. The state should ______.
recognize a $200,000 expenditure report a $200,000 asset on the governmental financial statements
Capital leases are ______.
recorded as an asset and lease liability for proprietary funds only
BUDGETARY FUND BALANCE—ASSIGNED FOR ENCUMBRANCES represents a(n) ______.
reservation of the budgetary fund balance
Operating budgets for the general fund of a governmental unit include expected ______.
revenue from various sources provided by law expenditures for various line items
Under the accrual basis of accounting, ______.
revenues are recognized when a sales transaction or a revenue generating event takes place expenditures are recognized when a transaction leading to the outflow of cash for expenses takes place
Governmental funds report which of the following as assets of the funds?
their own current investments accrued interest receivable their own long-term financial investments
When using the consumption method of accounting for inventory, the expenditure for the period is equal to the amount of inventory ______.
used during the current period
If a governmental entity assesses tax revenues from an exchange transaction, the asset is recognized ____________.
when the underlying transaction occurs or resources are received by the government, whichever comes first
Which of the following is the correct equation to calculate the remaining appropriating authority available to the fund managers?
Appropriating authority remaining available = APPROPRIATIONS - (ENCUMBRANCES + Expenditures)
On January 1, 20X1, a city purchased inventory for $10,000. On December 31, 20X1, inventory appearing on the balance sheet was $4,000. The ending inventory balance on December 31, 20X2 was $1,000. Under the purchase method, the expenditure for inventory in 20X1 equals ______.
$10,000
On January 1, 20X1, a city purchased inventory for $10,000. The city had no beginning inventory. On December 31, 20X1, inventory appearing on the balance sheet was $4,000. The ending inventory balance on December 31, 20X2, was $1,000. Under the consumption method, the expenditure for inventory in 20X1 equals ______.
$6,000
Funds that have a flow of economic resources measurement focus use the Blank______ basis of accounting.
Accrual
Which of the following is true of the recognition of interfund loans in a fund's financial statements?
All outstanding loans or advances must be reported on the balance sheet as payables or receivables.
When recording the general fund budget for a year, the excess of estimated revenues over anticipated expenditures is recorded as a credit to ______.
BUDGETARY FUND BALANCE—UNASSIGNED
On September 1, 20X1, a city estimated a cost of $10,000 for the purchase of goods and issued a purchase order to an external vendor. On November 15, 20X1, the corporation received the goods at an actual cost of $7,500. Which of the following is the required journal entry upon the receipt of goods?
Debit BUDGETARY FUND BALANCE—ASSIGNED FOR ENCUMBRANCES for $10,000; Credit ENCUMBRANCES for $10,000
A city levied taxes on property owners in its jurisdiction for the fiscal year ended December 31, 20X1. It collected the billed amounts on January 31, 20X2. Which of the following are recorded upon collection of property taxes on January 31?
Debit Cash; Credit Property Taxes Receivable Debit Deferred Tax Revenue; Credit Property Tax Revenue
The police department of a city issues a purchase order for a vehicle. The city recorded an encumbrance of $15,000 for the purchase of the vehicle. However, the actual cost incurred was $16,000. Which of the following are the journal entries to account for the vehicle's acquisition?
Debit ENCUMBRANCES for $15,000; Credit BUDGETARY FUND BALANCE—ASSIGNED FOR ENCUMBRANCES for $15,000 Debit Expenditures for $16,000; Credit Vouchers Payable for $16,000 Debit BUDGETARY FUND BALANCE—ASSIGNED FOR ENCUMBRANCES for $15,000; Credit ENCUMBRANCES for $15,000
The journal entry to record the general fund budget for a new fiscal year is ______.
Debit ESTIMATED REVENUES CONTROL; Credit APPROPRIATIONS CONTROL; Credit BUDGETARY FUND BALANCE—UNASSIGNED
A government department estimated the cost of a purchase order for goods to be $25,000. When the goods were delivered, the actual cost on the invoice was $20,000. Which of the following is the journal entry made upon the receipt of the goods?
Debit Expenditures by $20,000; Credit Vouchers Payable by $20,000
A city government recorded an outstanding encumbrance of $12,000 for the year ended June 30, 20X1. As of July 1, 20X2, the board decides not to honor the outstanding encumbrance. The entry to record the cancellation is ______.
Debit Fund Balance—Assigned for Encumbrances for $12,000; Credit Fund Balance—Unassigned for $12,000
A governmental unit has a policy of carrying over the prior-year spending authority as nonlapsing encumbrances. On December 10, 20X0, the governmental unit issued a purchase order to procure goods for $20,000. The governmental unit did not receive the goods until February 1, 20X1. Which of the following is the journal entry to record the reclassifying of the 20X0 encumbrance reserve on January 1, 20X1?
Debit Fund Balance—Assigned for Encumbrances for $20,000; Credit Fund Balance—Assigned for Encumbrances—20X0 by $20,000
Which of the following is the journal entry to record an interfund transfer on the books of the fund that transfers resources into a recipient fund?
Debit Other Financing Uses—Transfer Out to the Recipient Fund; Credit Cash
On September 14, 20X1, a government unit received an invoice for $12,000 on the purchase of goods from an external vendor. The governmental unit estimated the cost of purchase of goods to be $13,000. Which of the following is the journal entry to record the payment of a voucher for goods received?
Debit Vouchers Payable for $12,000; Credit Cash for $12,000
The accrual basis of accounting is used in funds that have a flow of __________ ____________
Economic resources
True or false: Appropriations need not be the starting point for making expenditures.
False
True or false: Most interfund transfers for services provided and used involve immediate cash disbursements
False
A government entity issued a purchase order for $12,000 to purchase goods on December 1, 20X0. It did not receive the goods until January 31, 20X1. On January 1, 20X1, the government unit records the reversal of the encumbrance reserve. On January 31, the entity recorded the actual expenditure of $10,000 for the goods received. On January 1, 20X1, ______.
Fund Balance—Assigned for Encumbrances is debited for $12,000 Fund Balance—Unassigned is credited for $12,000
The internal service fund of a city received a long-term interfund loan of $20,000 from the general fund. Journal entries are made in the ______.
General Fund: Debit Due from Internal Service Fund for $20,000; Credit Cash for $20,000 Internal Service Fund: Debit Cash for $20,000; Credit Due to General Fund for $20,000
Which of the following is true of governmental funds?
Governmental funds with legally adopted annual operating budgets should enter their budgets into the formal accounting records.
Identify the impact of expenditures on the appropriating authority remaining available to the fund managers.
It reduces the appropriating authority remaining.
A hybrid system that includes some aspects of accrual accounting and some aspects of cash basis accounting is called the _________ ___________ basis.
Modified Accrual
Under the ________ ________ basis of accounting, revenue is recognized when the underlying exchange has occurred and the resources are available.
Modified Accrual
A government entity uses the purchase method of accounting for inventories. Inventory is considered material to the balance sheet of the entity. On September 30, 20X1, the entity purchased inventory for $7,500. On December 31, 20X1, a physical count of the inventory shows that inventory costing $5,000 was still on hand. Which of the following statements are correct regarding this purchase?
The balance sheet will show Inventory of $5,000. Expenditures for the year 20X1 equal $7,500.
Which of the following statements are true regarding the consumption method of accounting for inventories?
The budget for the period should be based on the amount expected to be used so that the budgeted and actual amounts can be compared at EOY. The expenditure for the period is equal to the amount of inventory used during the period.
Identify the treatment of the encumbrance if the goods are ordered in one fiscal year and received in the next year.
The encumbrance is not reversed before the end of the fiscal year.
Identify the impact of the entry to eliminate reserve for outstanding encumbrances on fund balances not being renewed.
The fund balance does not change.
Which of the following statements are true of a voucher control system of a governmental entity?
The governing board receives a schedule of vouchers to be approved for payment by vote of the board. On approval of the schedule of vouchers, checks are written and delivered to the supplier of the specified goods.
When encumbrances are not reversed before the end of the fiscal period, how are the outstanding encumbrances accounted for?
They may be carried over as nonlapsing spending authority. It depends on the governmental unit's policy. They may be allowed to lapse.
Identify the impact of entries for receiving a product on encumbrances.
They reduce encumbrances.
True or false: The accounting for the purchase of a capital asset differs in the five governmental funds from the accounting used in the propriety funds.
True
