Ch. 3 LearnSmart

The temporary account established to recognize the difference between the anticipated inflows and outflows related to the budgetary period is called _____ _____ _____.

Budgetary Fund Balance

Budgetary practices of a government may differ from GAAP accounting practices due to _____ differences. (Check all that apply) a. timing b. classification c. entity d. functional

a & c

The rate used for property taxes may be determined by multiplying the: (Check all that apply) a. assessed valuation of property by the maximum rate allowable under state law b. fair market value of property by a flat rate set by the state c. assessed valuation of property by a flat rate determined by the governing body

a & c

End-of-year fund balances are decreased by: (Check all that apply) a. Expenditures b. Other financing sources c. Expenses d. Other financing uses

a & d

Miscellaneous revenues: (Check all that apply) a. include escheats b. are generally accrued c. include interest earnings on delinquent taxes d. prevents revenues from being forced into an incorrect category

a & d

Ad valorem property taxes: (Check all that apply) a. are not used as a source of revenue for many state governments b. are a good source of financing for local governments c. may not be levied against personal property d. are based on the value of the property

a, b, & d

Indicate the order flow of budgetary control over expenditures. a. Disbursement b. Expenditure c. Appropriation d. Encumbrance

c. Appropriation d. Encumbrance b. Expenditure a. Disbursement

The journal entry to record the issuance of a purchase order would include a debit to: a. Expenditures b. Expenses c. Encumbrances d. Appropriations

c. Encumbrances

An example of a functional classification is: a. solid waste collection - residential b. capital outlays c. public safety d. fire department

c. public safety

Match the definitions with the term. 1. Functions 2. Programs a. Group-related activities that are aimed at accomplishing a major service or regulatory responsibility b. Group activities, operations, or organizational units that are directed to the attainment of specific purposes or objectives

1. a 2. b

Match the special reporting item with its definition. 1. Extraordinary items 2. Special items a. Transactions or events that are within management's control that may be either unusual in nature or infrequent in occurrence b. Transaction or other events that are both unusual in nature and infrequent in occurrence

1. b 2. a

Ranking the following revenue classifications with the primary one on top: a. Source b. Fund c. Class

Fund Source Class

True or false: Independent public school systems must prepare the MD&A and basic financial statements required by GASB standards.

True

Fund balance: (Check all that apply) a. is equal to the difference between (1) current assets and deferred outflows and (2) current liabilities and deferred inflows b. is analogous to the capital accounts of an investor-owned entity c. includes accounts that are not available for spending d. is equal to the difference between general capital assets and general long-term liabilities

a & c

Governments: (Check all that apply) a. present budget data as required supplementary information b. are only required to prepare a budgetary schedule for the General Fund c. have the option of including budgetary information as a financial statement

a & c

Special assessments are: (Check all that apply) a. levied to defray part or all of the costs of a specific improvement or service b. levied against all taxable property within the boundaries of the government levying the taxes c. the same as ad valorem taxes d. only levied against certain properties in that area that will benefit from the specific improvement or service

a & d

According to GASB, expenditures classifications include: (Check all that apply) a. character b. function or program c. object d. appropriation e. authorization

a, b, & c

Major revenue sources classes for revenue include: (Check all that apply) a. charges for services b. fines and forfeits c. taxes d. estimated revenues e. appropriations

a, b, & c

Governmental funds record financial transactions in operating statement accounts classified as: (Check all that apply) a. Other Financing Sources and Uses b. Internal Balances c. Revenues d. Expenditures e. Expenses

a, c, & d

Taxable property for most local governments often exclude property owned by: (Check all that apply) a. religious organization b. senior citizens c. charities d. military veterans e. governments

a, c, & e

Temporary budgetary accounts are closed at year-end to: a. Budgetary Fund Balance b. Other Financing Sources c. Other Financing Uses d. Encumbrances

a. Budgetary Fund Balance

When a government treats property tax as a residual source of revenue, the amount to be raised for property taxes is determined _____ revenues from all other sources are budgeted. a. after b. before

a. after

Under GASB standards, fund other financing sources and uses: a. are reported in a separate section of the operating statement b. do not impact the end-of-year fund balance c. meet the definitions of revenues and expenditures

a. are reported in a separate section of the operating statement

An appropriation is considered ____ when the authorized liabilities have been incurred. a. expended b. encumbered c. budgeted

a. expended

Governmental funds report: a. expenditures b. both expenses and expenditures c. expenses

a. expenditures

Grants and other financial assistance are included in: a. intergovernmental revenue b. miscellaneous revenue c. charges for services d. special assessments

a. intergovernmental revenue

A specific and distinguishable line of work performed by an organization unit is called a(n) _____.

activity

An internal allocation of funds on a periodic basis usually agreed upon by the department heads and chief executive is called a(n) _____.

allotment

A legal authorization to expend cash or other financial resources for goods, services, and facilities to be used for specified purposes is called a(n) _____.

appropriation

When enacted into law, a(n) _____ is an authorization for administrators to expend financial resources on behalf of the government.

appropriation

Interfund transactions between governmental and business-type activities that involve the sale of goods or services are: (Check all that apply) a. included in the Primary Government Total column b. reported as an inflow in one activities column and as an outflow in the other activities column c. reported as program revenue and expenses d. reported as interfund transfers

b & c

Generally, public school revenues should be classified by: (Check all that apply) a. subject matter b. project/reporting code c. source d. level of instruction e. fund

b, c, & e

Items to be reported as general revenues include: (Check all that apply) a. charges for services such as licenses and permits b. tax revenues c. operating grants and contributions d. unrestricted multipurpose grants and contributions e. unrestricted earnings from endowments or permanent fund investments

b, d, & e

Revenues collected by a government from individuals or business concerns for various rights or privileges granted are: a. Fines and forfeits b. Licenses and permits c. Charges for services d. Special assessments

b. Licenses and permits

Which of the following statements is true? a. All multipurpose grants are reported as general revenue b. Some multipurpose grants are reported as program revenues c. All restricted grants and contributions are reported together

b. Some multipurpose grants are reported as program revenues

On the Statement of Activities, the sum of general revenues plus any special or extraordinary items is: a. subtracted from Net (Expense) Revenue to obtain the change in net position for the period b. added to Net (Expense) Revenue to obtain the change in net position for the period c. subtracted from Beginning Fund Balance to determine Ending Fund Balance for the period d. added to Beginning Fund Balance to determine Ending Fund Balance for the period

b. added to Net (Expense) Revenue to obtain the change in net position for the period

Court costs, receipts from parking meters, and special police service fall under the category of: a. special assessments b. charges for services c. miscellaneous revenue d. licenses and permits

b. charges for services

The city of Richland ordered supplies for $5,400. The supplies were received a week later for $5,000. The entry to record the expenditure would include a: a. credit to Accounts Payable for $5,400 b. debit to Expenditures for $5,000 c. debit to Expenses for $5,000 d. credit to Encumbrances for $5,000

b. debit to Expenditures for $5,000

With the exception of Encumbrances, all budgetary accounts have normal balances that are _____ the corresponding operating statement account. a. the same as b. opposite of

b. opposite of

Interest on delinquent taxes: a. is an addition to a tax on the day it becomes delinquent b. should be accrued when the financial statements are prepared c. is recognized as revenue when it is assessed

b. should be accrued when the financial statements are prepared

If a revenue is restricted by a donor or a tax or other revenue is authorized by a legislative body for a specified purpose, a government should create a(n) _____ fund. a. enterprise b. special revenue c. capital projects d. permanent

b. special revenue

The primary budgetary control accounts are: (Check all that apply) a. Estimated Expenses b. Estimated Expenditures c. Appropriations d. Estimated Revenues e. Encumbrances

c, d, & e

The city of Richland ordered supplies for $5,400. The supplies were received a week later for $5,000. The entry to record the purchase order would include: a. A debit to Expenditures for $5,400 b. A debit to Encumbrances for $5,000 c. A debit to Encumbrances for $5,400 d. A debit to Appropriations for $5,400

c. A debit to Encumbrances for $5,400

The budget for the city of Portage was approved at the beginning of the current fiscal year for estimate revenues of $2,100,000 and appropriations of $2,000,000. The entry to record this budget would include a debit to: a. Encumbrances, a debit to Budgetary Fund Balance, and a credit to Estimated Revenues b. Estimated Revenues, a credit to Budgetary Fund Balance, and a credit to Encumbrances c. Estimated Revenues, a credit to Budgetary Fund Balance, and a credit to Appropriations d. Appropriations, a debit to Budgetary Fund Balance, and a credit to Estimated Revenues

c. Estimated Revenues, a credit to Budgetary Fund Balance, and a credit to Appropriations

The format for the top portion of the statement of Activities is: a. Expenses - Program Revenues = Change in net position b. Expenses - Program Revenues = Change in fund balance c. Expenses - Program Revenues = Net (Expense) Revenue

c. Expenses - Program Revenues = Net (Expense) Revenue

Which of the following statements is correct? a. General capital assets and general long-term liabilities are not reported in the Governmental Activities column of the statement of net position. b. Governmental funds use the accrual basis of accounting. c. Governmental funds only account for liabilities that will be paid with fund assets

c. Governmental funds only account for liabilities that will be paid with fund assets

GASB standards provide that revenue from sales taxes, income taxes, and gross receipts tax be recognized in the accounting period in which: a. the amounts are measurable and available b. cash payments are received c. the underlying transactions occur

c. the underlying transactions occur

Classification by _____ is based on the fiscal period that benefits from a particular expenditure.

character

For property taxes, GASB requires collection within _____ days after the end of the current period to be considered available. a. 120 b. 30 c. 90 d. 60

d. 60

Which of the following statements is correct? a. Revenue for fines and forfeits must always be accrued and should not be recognized when cash is received b. Penalties on delinquent taxes should be included under the category Fines and Forfeits c. Library fines are not included in fines and forfeits d. Revenues include fines and penalties for neglect of official duty

d. Revenues include fines and penalties for neglect of official duty

The city of Richland ordered supplies for $5,400. The supplies were received a week later for $5,000. The entry to reverse the purchase order would include: a. a debit to Encumbrances for $5,400 b. a debit to Encumbrances Outstanding for $5,000 c. a credit to Encumbrances Outstanding for $5,400 d. a debit to Encumbrances Outstanding for $5,400

d. a debit to Encumbrances Outstanding for $5,400

The _____ classification is critically important for the effective management of public education at the local, state, and federal levels. a. level of instruction b. fund c. function d. program

d. program

Other _____ _____ have the same effect on fund balance as expenditures.

financing uses

Expenses are generally reported by _____ or _____.

function; program

The primary classification of governmental expenditures is by _____.

fund

Expenses not directly linked to an identifiable function or program are called _____ expenses.

indirect

The article or service for which an expenditure was made is called the _____ of the expenditure.

object

A legally mandated addition to a tax on the day the tax becomes delinquent is called a(n) _____.

penalty

A key distinction between classification of expenditures by organizational unit and classification by _____ or _____ is that responsibility for a department is fixed.

program; function

Revenues are reported for a government as either _____ revenues or _____ revenues.

program; general

The categories of program revenues reported on the statement of activities include charges for _____, operating _____ and contributions and _____ grants and contributions.

services; grants; capital