Government Homework Questions
Where should a deferred inflow of resources be reported on the financial statements? The liabilities section on the statement of net position. After the liabilities section on the statement of net position. After the general revenues on the statement of activities. As a note disclosure in the financial statements because it is deferred.
After the liabilities section on the statement of net position
Which of the following statements is true regarding the basic financial statements of a state or local government? Separate columns should be provided in the government-wide financial statements for governmental activities and business-type activities. Governmental fund and proprietary fund financial statements should provide a separate column for each major fund. Aggregate information about all nonmajor governmental funds should be reported in a single column of the governmental fund financial statements and all nonmajor enterprise funds should be reported in a single column of proprietary fund financial statements. All these answer choices are correct.
All these answer choices are correct
Before placing a purchase order, a department should check that available appropriations are sufficient to cover the cost of the item being ordered. This type of budgetary control is achieved by reviewing Appropriations minus expenditures. Appropriations plus expenditures minus outstanding encumbrances. Appropriations minus the sum of expenditures and outstanding encumbrances. Appropriations minus estimated revenues.
Appropriations minus the sum of expenditures and outstanding encumbrances.
Under modified accrual accounting, revenues are recognized when management defines them as available for paying current-period obligations. Management considers its definition of the term available to be essential to the financial statement users' understanding of revenues recognized on the statement. How would management communicate to users its definition of available? As a note to the financial statements. As required supplementary information. As other supplementary information. As a disclosure on the face of the financial statement.
As a note to the financial statements
The concept of interperiod equity refers to whether Revenues equaled or exceeded expenses for the year. Total assets (current and noncurrent) were sufficient to cover total liabilities (current and noncurrent). Current-year revenues were sufficient to pay for current-year services. Future taxpayers can expect to receive the same or a higher level of services as current taxpayers.
Current-year revenues were sufficient to pay for current-year services
The primary reason that not-for-profit (NFP) organizations should report expenses incurred for program purposes separately from those for supporting services such as management and general and fund-raising is that GASB standards require it. Program managers need information about the cost of activities for which they are responsible. Top managers need to know how much they are spending for nonprogrammatic management and general support. Donors, potential donors, oversight bodies, and others need to know what percentage of total expenses are being incurred for carrying out the NFP's programs.
Donors, potential donors, oversight bodies, and others need to know what percentage of total expenses are being incurred for carrying out the NFP's programs.
Financial information about an internal service fund should be reported in the proprietary fund financial statements and the: Governmental Activities column of the government-wide financial statements. Business-type Activities column of the government-wide financial statements. Either governmental activities or business-type activities column of the government-wide financial statements, depending on whether the internal service fund predominantly serves governmental activities or business-type activities. None of the answer choices are correct.
Either governmental activities or business-type activities column of the government-wide financial statements, depending on whether the internal service fund predominantly serves governmental activities or business-type activities.
Which of the following is an acceptable method of reporting depreciation expense for depreciable assets used by governmental activities? Report as a general expense in the bottom section of the statement of activities. Report as a direct expense of the function or program with which the related depreciable assets are identified. Report as an indirect expense on a separate line if the depreciable assets benefit all functions or programs. Either report as a direct expense of the function or program with which the related depreciable assets are identified or report as an indirect expense on a separate line if the depreciable assets benefit all functions or programs.
Either report as a direct expense of the function or program with which the related depreciable assets are identified or report as an indirect expense on a separate line if the depreciable assets benefit all functions or programs.
Under GASB requirements for external financial reporting, the budgetary comparison schedule (or statement) would be found as a part of Required supplementary information (RSI). Basic financial statements. Note disclosures. Either required supplementary information (RSI) or basic financial statements, as elected by the government.
Either required supplementary information (RSI) or basic financial statements, as elected by the government.
Which of the following best describes the recommended format for the government-wide statement of activities? Revenues minus expenses equals change in net position. Revenues minus expenditures plus (minus) other financing sources (uses) equals change in net position. Expenses minus program revenues equals net (expense) revenue. Net (expense) revenue plus general revenues equals change in net position. Expenses minus program revenues minus general revenues plus (minus) extraordinary and special items equals changes in net position.
Expenses minus program revenues equals net (expense) revenue. Net (expense) revenue plus general revenues equals change in net position.
American Diabetes Association
F
American Institute of Certified Public Accountants (AICPA)
F
Mayo Clinic
F
The metropolitan museum of art
F
Homeland security
FB
The department of the interior
FB
On the government-wide statement of net position, which of the following statements is false? Governmental funds are reported under the Governmental Activities column. Enterprise funds are reported under the Business-type Activities column. Some types of component units are reported as a separate column. Fiduciary funds are reported as a separate column.
Fiduciary funds are reported as a separate column
A tax watchdog group is interested in ensuring that the city does not spend more than the amount of resources it receives in the current fiscal year. The watchdog group is primarily interested in Fiscal accountability. Social accountability. Political accountability. Operational accountability.
Fiscal Accountability
A member of the city council does not understand why governments need to use funds. He believes it makes reporting too complex and that funds should be eliminated. What explanation would you use to help explain why funds are needed? Funds are necessary to allow the government to provide information about governmental activities separate from business-type activities. Funds are necessary to allow the city council to have increased budgetary control over the amounts spent by the government. Funds are necessary to help increase transparency by showing that legal constraints on spending certain revenues for the specific purpose for which the revenues were intended are being met. The city council person is correct: There is no required reason for fund accounting, it increases difficulty in understanding financial reports, and the city should consider eliminating funds.
Funds are necessary to help increase transparency by showing that legal constraints on spending certain revenues for the specific purpose for which the revenues were intended are being met.
Bay Area Rapid Transit
G
New york city
G
The county, parish, or borough in which you live
G
operating grants that can be used at the discretion of the city council
G
For each of the following entities, identify if the entity would be governed by GASB standards by placing a "G," FASB standards by placing an "F," or FASAB standards by placing an "FB." (Hint: Search the website of the entity listed if you are unsure.)
G = GASB F = FASB FB = FASAB
For each of the following fund types, indicate the fund category
GF = governmental funds PF = proprietary funds FF = fiduciary funds
Which of the following fund(s) will generally be the only fund(s) that can report a positive unassigned fund balance? General Fund General Fund and special revenue funds. General Fund and capital projects funds. All governmental funds.
General Fund
A certain city reports the following year-end total assets: General Fund $ 18,400,000 Library Fund (a special revenue fund) 2,900,000 Debt Service Fund 2,600,000 Total governmental funds 26,300,000 Total governmental and enterprise funds combined 51,250,000 Based on this information, which funds should be reported as major funds?
General Fund and Library Fund Explanation: Major Fund Rule 1: at least 10% for all funds of that category Gov Fund: 26,300,000 x 10%= 2,630,000 Gen Fund & Library Fund > 2,630,000 Debt Service Fund < 2,630,000 Rule 2: at least 5% of the total gov and enterprise funds combined Gov & Enterprise: 51,250,000 x 5% = 2,562,500 Gen Fund & Library Fund > 2,562,500
If the city projects a $428,000 decrease in the sales tax revenues originally budgeted, how would the change in the projection be recorded?
General journal Debit Credit Budgetary Fund Balance 428,000 Estimated Revenue 428,000
Spruce City's finance department recorded the recently adopted General Fund budget at the beginning of the current fiscal year. The budget approved estimated revenues of $1,100,000 and appropriations of $1,000,000. Which of the following is the correct journal entry to record the budget?
General journal Debit Credit Estimated Revenues 1,100,000 Budgetary Fund Balance 100,000 Appropriations 1,000,000
What are the components that are included in the minimum requirements for general purpose external financial reporting? Introductory section, financial section, and statistical section. MD&A, government-wide financial statements, fund financial statements, notes to the financial statements, and RSI. Letter from the chief financial officer, government financial statements, notes to the financial statements, and RSI. MD&A, government-wide financial statements, notes to the financial statements, and RSI.
MD&A, government-wide financial statements, fund financial statements, notes to the financial statements, and RSI.
Governmental Funds
Major Funds Fiscal accountability Balance Sheet Expenditures Integrated Budgetary Accounts
Which of the following statements about major funds is true? Major funds are determined based on the size of the fund or management discretion. Major funds are reported only in governmental fund financial statements. Major funds are reported on the fund and government-wide financial statements. A fund that is at least 10 percent of the total revenues of all governmental and proprietary funds would be considered a major fund.
Major funds are determined based on the size of the fund or management discretion.
The measurement focus and basis of accounting that should be used for the government-wide financial statements are
Measurement Focus = Economic resources Basis of accounting = accrual
Which of the following is a special purpose government? The State of Arkansas. Greene Township. City of Seattle. Minneapolis Public Schools.
Minneapolis Public Schools
Indicate whether the following revenues should be classified as program revenues (P) or general revenues (G) on the government-wide statement of activities.
P = program revenues G = general revenues
Government financial reports should be useful in assessing a government's accountability. Three objectives of government financial reporting identify how financial reporting can be useful in assessing a government's accountability. Which of the following is not related to one of the objectives? Providing information on operating results for the current period. Providing information on meeting current year service performance goals. Providing information related to the provision of services in accordance with legally adopted budgets. Providing information on ability of the government to meet obligations as they come due.
Providing information on meeting current year service performance goals
Which of the following amounts that are identified at the end of the fiscal year would be classified as an assigned fund balance? Resources the city manager has set aside for a major street repair. A federal grant that is to be used for playground equipment. Significant amounts of inventory. Endowment resources that the city must maintain in perpetuity.
Resources the city manager has set aside for a major street repair
Under the modified accrual basis of accounting: Revenues are recognized at the time an exchange transaction occurs. Expenditures are recognized as the cost of an asset expires or is used up in providing government services. Revenues are recognized when current financial resources become measurable and available to pay current-period obligations. Expenses are recognized when an obligation occurs for costs incurred in providing services.
Revenues are recognized when current financial resources become measurable and available to pay current-period obligations.
Which of the following statements is true for both government organizations and for-profit organizations? Revenues may be earned through exchange transactions. There is an absence of owners. There is a lack of profit motive. Resources are provided by individuals and entities that may not directly benefit from the use of the resources.
Revenues may be earned through exchange transactions
For each characteristic, concept, or financial reporting requirement listed, indicate a Y for yes in the type of organization column if the item applies to that type of organization or N for no if it does not apply.
State & Local Governments Federal Government Nongovernmental NFO orgs
Accountability is the foundation of financial reporting.
State and Local Federal
MD&A
State and Local Federal
Which of the following financial statements is not a basic financial statement under FASAB standards? Balance sheet. Statement of changes in net position. Statement of cash flows. Statement of social insurance.
Statement of cash flows
Which of the following is correct concerning the presentation of the budgetary comparison schedule? A Final Budget column is optional. The Actual column is presented using the government's budgetary basis of accounting. The Variance column is required. The budgetary comparison schedule is prepared for all governmental funds.
The Actual column is presented using the government's budgetary basis of accounting.
Which of the following statements regarding primary sources of accounting and financial reporting standards is false? The GASB sets standards for all state and local governments. The FASB sets standards for all business and governmental not-for-profit entities. The FASB and GASB are administered by the Financial Accounting Foundation. The FASAB sets standards for the federal government and its agencies and departments.
The FASB sets standards for all business and governmental not-for-profit entities
Which of the following is not a required section of a federal agency or department's performance and accountability report (PAR)? A performance section, which includes an annual performance report (APRIL). An MD&A. A basic financial statements section. A statement of nonparticipation in political matters.
a statement of nonparticipation in political matters
Fiduciary Funds
accrual additions and deductions current and noncurrent assets and liabilities operational accountability
Business-type activities, government-wide
accrual current and noncurrent assets and liabilities operational accountability
Governmental Activities, government-wide
accrual current and noncurrent assets and liabilities operational accountability
When determining taxable property for the purpose of the property tax levy, which of the following would likely be excluded from the calculation? Property owned by governments. Property exempted from taxation by the government. Property used by religious or charitable organizations. All these answer options are correct.
all these answer options are correct
An internal allocation of funds on a periodic basis, which is often used to regulate the use of appropriations over a budgetary period, is called An encumbrance. A budgetary levy. An ad valorem assessment. An allotment.
an allotment
Which of the following statements is true for other financing sources but is not true for revenues? Arise from the sale of capital assets. Increase fund balances when they are closed at year-end. Temporary accounts closed at fiscal year-end. Have normal credit balances.
arise from the sale of capital assets
How does the GASB recommend governments report budgetary information? As a required financial statement. As a note disclosure. As required supplementary information. As other supplementary information.
as required supplementary information
construction of public building
capital projects
taxes collected on behalf of another government
custodial
Which of the following is an example of classification by object of expense? Personnel unit. Economic development. Debt service. Parking enforcement.
debt service
principal and interest payments on general obligation long-term debt
debt service
If it is in accordance with the government's policies, which of the following budgetary accounts can remain open at the fiscal year-end? Appropriations. Encumbrances. Fund Balance. Estimated Other Financing Sources.
encumbrances
Which of the following accounts neither increases nor decreases the fund balances reported on the governmental fund balance sheet for the fiscal year? Expenditures. Encumbrances. Revenues. Other financing sources.
encumbrances
costs of operating a city transportation system
enterprise
Performance & accountability report (PAR)
federal
Stewardship is identified as a financial statement purpose
federal nfp
custodial
ff
investment trust fund
ff
pension trust fund
ff
private-purpose
ff
interest and penalties on delinquent property taxes
g
admin expenses of the finance office
general
capital projects
gf
debt service
gf
general
gf
permanent
gf
special revenue
gf
Supplies ordered by the Public Works function of the General Fund were received at an actual price that was less than the estimated price listed on the purchase order. What effect will this have on Public Work's appropriations available balance? Increase. Decrease. No effect. Insufficient information to determine the effect.
increase
cost of a central printing function
internal service
assets held for external gov participants in the gov's investment pool for the purpose of earning investment income
investment trust
a special assessment for snow removal
p
building permits
p
federal grants restricted for highway construction
p
fees assessed other government for police assistance at a special event
p
assets held in trust to provide retirement benefits for municipal workers
pension (and other employee benefit) trust
gifts in which the principal must be invested and preserved but the investment earnings can be used for public purposes
permanent
enterprise
pf
internal service
pf
gifts in which the principal must be invested and preserved, while the investment earnings must be used to provide scholarships to children of police officers who died in the line of duty
private-purpose trust
grant revenues restricted for particular operating purposes
special revenue
required fund financial statements are presented as part of the financial report
state and local
A concern with budgetary compliance
state and local federal
absence of defined ownership interests
state and local federal nfp
considered private sector standard-setting boards
state and local nfo
oversight by the financial accounting foundation (FAF)
state and local nfo
standards focus on just external users of financial information
state and local nfo
Proprietary Funds
statement of cash flows accrual major funds current and noncurrent assets and liabilities operational accountibility
The basic financial statements of a not-for-profit include all of the following except Statement of financial position. Statement of activities. Statement of changes in functional expenses. Statement of cash flows.
statement of changes in functional expenses
Assets and liabilities of activities for which the government is acting in either a custodial or trustee capacity for individuals, organizations, or other governments should be reported in The fiduciary column of the government-wide financial statements. The fiduciary fund financial statements. Both government-wide and fiduciary fund statements. Neither government-wide nor fiduciary fund statements.
the fiduciary fund financial statements
Which of the following best identifies when an encumbrance is recorded? When goods or services are received. When an obligation is incurred that will be paid from current financial resources. When legislative authority has been granted to spend resources. When goods or services are ordered.
when goods or services are ordered
