Question 1

Every general purpose government will have one General Fund.

Accepted Answer

A) True 
 B)False

Question 2

The Revenues Control account of the General Fund is debited when:

Accepted Answer

A)   The budget is recorded at the beginning of the year.
B)   Uncollectible taxes receivable accounts are written off.
C)   Property taxes are collected.
D)   None of the above.

Question 3

When payrolls and other liabilities are incurred and must be paid before substantial amounts of cash will be collected,what type of short-term note is desirable and secured by a government's power to tax?

Accepted Answer

A)   Tax Relief Note Payable.
B)   Tax Budget Note Payable.
C)   Tax Anticipation Note Payable.
D)   Tax Encumbrances Note Payable.

Question 4

A local government was awarded a federal grant in the amount of $1,200,000 to provide for a summer employment program for young people.The grant was a reimbursement grant and was awarded on April 30,2012.The local government expended the resources as follows: June,2012,$440,000; July 2012,$400,000; August,2012,$360,000.The federal government provided the funds the following months.The local government would recognize revenues for the fiscal year ended June 30,2012 in which amount?

Accepted Answer

A)   $1,200,000
B)   $840,000
C)   $440,000
D)   $-0-

Question 5

Which of the following statements is not correct?

Accepted Answer

A)   Transactions between funds of the same government may not be assumed to be arms' length in nature.
B)   Most interfund transactions are eliminated in the government-wide statements.
C)   Interfund reimbursements are classified as other financing sources or uses.
D)   Interfund transfers are classified as other financing sources or uses.

Question 6

Expenditures for claims and judgments and landfill postclosure care costs of governmental funds should be recognized to the extent that the liabilities are going to be paid with available resources.

Accepted Answer

A) True 
 B)False

Question 7

GASB requires both extraordinary and special items to be reported separately after other financing sources and uses in the general and special revenue fund financial statements.

Accepted Answer

A) True 
 B)False

Question 8

Regarding interfund transactions,which of the following is not correct?

Accepted Answer

A)   Transaction between funds are not assumed to be arm's length in nature.
B)   Failure to properly report interfund transactions will result in two funds being misstated.
C)   Interfund transaction must be repaid.
D)   Interfund reimbursement is a payment by one fund to second fund to repay it for a purchase which belongs in the first fund.

Question 9

The year end closing entries involve:

Accepted Answer

A)   Reversing the entry to record the budget.
B)   Transferring the balances of the activity accounts and of the budgetary accounts to Fund Balance.
C)   Reversing any entries that were made to amend the budget.
D)   All of the above.

Question 10

The Town of Tonawanda has $40,000 of purchase orders outstanding at the end of 2011 which will be honored.The goods and supplies were received early in January,2012.The invoice amounted to $38,750. What is the journal entry necessary to re-establish the encumbrance at the beginning of 2012?

Accepted Answer

A)   Budgetary Fund Balance -- Reserve for Encumbrances 40,000Encumbrances Control (2011)  40,000Expenditures Control (2011)  38,750Accounts payable 38,750
B)   Encumbrances Control (2011)  40,000 Fund Balance 40,000
C)   Encumbrances Control (2011)  40,000 Budgetary Fund Balance-- Reserve for Encumbrances (2011)  40,000
D)   Budgetary Fund Balance -- Reserve for Encumbrances (2011)  40,000Fund Balance 40,000

Question 11

Under the consumption method to account for supplies inventory,an asset is recorded when inventories are acquired,and the expenditure is recorded when the supplies are consumed.

Accepted Answer

A) True 
 B)False

Question 12

The term special item is defined as:

Accepted Answer

A)   Frequent and unusual but within management's control.
B)   Unusual or infrequent but within management's control.
C)   Frequent and unusual and not within management's control.
D)   Unusual or infrequent and not within management's control.

Question 13

A donor pledged $200,000 to the fund raising drive of a local government to assist its police officers in obtaining the latest technology.The pledge was made on July 16,2011 but was conditioned on the government raising an additional $200,000 from other donors.By the fiscal year-end of June 30,2012,the local government had raised only $5,000 from other donors.What entry would be made for the initial pledge by the local government during the year ended June 30,2012?

Accepted Answer

A)   No entry is required.
B)   Debit a receivable and credit deferred revenues, a liability.
C)   Debit a receivable and credit Fund Balance.
D)   Debit a receivable and credit a revenue.

Question 14

When closing the books for the General Fund,an excess of revenues over expenditures and encumbrances would be credited to Fund Balance.

Accepted Answer

A) True 
 B)False

Question 15

When would a special revenue fund be deemed to have satisfied the eligibility requirement of a reimbursement-type federal grant,under GASB Statement 33?

Accepted Answer

A)   Only as work is completed for a project.
B)   When a plan for use of the funds has been developed and approved.
C)   Only after work is completely finished for the project.
D)   When work has started for the project.

Question 16

Governmental fund financial statements are prepared using the modified accrual basis of accounting.

Accepted Answer

A) True 
 B)False

Question 17

When supplies ordered by a governmental unit are received at an actual price which is more than the estimated price on the purchase order,the Encumbrance Control account is:

Accepted Answer

A)   Credited for the original estimated price for the supplies received.
B)   Credited for the actual price on the purchase order.
C)   Debited for the estimated price on the purchase order.
D)   Debited for the actual price for the supplies received.

Question 18

The General Fund accounts for any resources not reported in one of the other funds.

Accepted Answer

A) True 
 B)False

Question 19

The asset,equipment,used by a department accounted for by the General Fund of a governmental unit should be reported in the:

Accepted Answer

A)   General Fund.
B)   Government-Wide Statements.
C)   Both (a)  and (b) .
D)   None of the above.

Question 20

When the General Fund purchases water from an enterprise fund,the General Fund would debit Transfers Out.

Accepted Answer

A) True 
 B)False

Exam 4: Accounting for the General and Special Revenue Funds

Correct Answer
verified

The asset,equipment,used by a department accounted for by the General Fund of a governmental unit should be reported in the:

Correct Answer
verified

Governmental fund financial statements are prepared using the modified accrual basis of accounting.

Correct Answer
verified

Every general purpose government will have one General Fund.

Correct Answer
verified

The Revenues Control account of the General Fund is debited when:

Correct Answer
verified

The term special item is defined as:

Correct Answer
verified

When closing the books for the General Fund,an excess of revenues over expenditures and encumbrances would be credited to Fund Balance.

Correct Answer
verified

The year end closing entries involve:

Correct Answer
verified

When the General Fund purchases water from an enterprise fund,the General Fund would debit Transfers Out.

Correct Answer
verified

Correct Answer
verified

When supplies ordered by a governmental unit are received at an actual price which is more than the estimated price on the purchase order,the Encumbrance Control account is:

Correct Answer
verified

The Town of Tonawanda has $40,000 of purchase orders outstanding at the end of 2011 which will be honored.The goods and supplies were received early in January,2012.The invoice amounted to $38,750. What is the journal entry necessary to re-establish the encumbrance at the beginning of 2012?

Correct Answer
verified

When payrolls and other liabilities are incurred and must be paid before substantial amounts of cash will be collected,what type of short-term note is desirable and secured by a government's power to tax?

Correct Answer
verified

Which of the following statements is not correct?

Correct Answer
verified

Expenditures for claims and judgments and landfill postclosure care costs of governmental funds should be recognized to the extent that the liabilities are going to be paid with available resources.

Correct Answer
verified

Regarding interfund transactions,which of the following is not correct?

Correct Answer
verified

The General Fund accounts for any resources not reported in one of the other funds.

Correct Answer
verified

Under the consumption method to account for supplies inventory,an asset is recorded when inventories are acquired,and the expenditure is recorded when the supplies are consumed.

Correct Answer
verified

When would a special revenue fund be deemed to have satisfied the eligibility requirement of a reimbursement-type federal grant,under GASB Statement 33?

Correct Answer
verified

GASB requires both extraordinary and special items to be reported separately after other financing sources and uses in the general and special revenue fund financial statements.

Correct Answer
verified

Exam 4: Accounting for the General and Special Revenue Funds

Correct AnswerverifiedShow Answer

The asset,equipment,used by a department accounted for by the General Fund of a governmental unit should be reported in the:

Correct AnswerverifiedShow Answer

Governmental fund financial statements are prepared using the modified accrual basis of accounting.

Correct AnswerverifiedShow Answer

Every general purpose government will have one General Fund.

Correct AnswerverifiedShow Answer

The Revenues Control account of the General Fund is debited when:

Correct AnswerverifiedShow Answer

The term special item is defined as:

Correct AnswerverifiedShow Answer

When closing the books for the General Fund,an excess of revenues over expenditures and encumbrances would be credited to Fund Balance.

Correct AnswerverifiedShow Answer

The year end closing entries involve:

Correct AnswerverifiedShow Answer

When the General Fund purchases water from an enterprise fund,the General Fund would debit Transfers Out.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When supplies ordered by a governmental unit are received at an actual price which is more than the estimated price on the purchase order,the Encumbrance Control account is:

Correct AnswerverifiedShow Answer

The Town of Tonawanda has $40,000 of purchase orders outstanding at the end of 2011 which will be honored.The goods and supplies were received early in January,2012.The invoice amounted to $38,750. What is the journal entry necessary to re-establish the encumbrance at the beginning of 2012?

Correct AnswerverifiedShow Answer

When payrolls and other liabilities are incurred and must be paid before substantial amounts of cash will be collected,what type of short-term note is desirable and secured by a government's power to tax?

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

Expenditures for claims and judgments and landfill postclosure care costs of governmental funds should be recognized to the extent that the liabilities are going to be paid with available resources.

Correct AnswerverifiedShow Answer

Regarding interfund transactions,which of the following is not correct?

Correct AnswerverifiedShow Answer

The General Fund accounts for any resources not reported in one of the other funds.

Correct AnswerverifiedShow Answer

Under the consumption method to account for supplies inventory,an asset is recorded when inventories are acquired,and the expenditure is recorded when the supplies are consumed.

Correct AnswerverifiedShow Answer

When would a special revenue fund be deemed to have satisfied the eligibility requirement of a reimbursement-type federal grant,under GASB Statement 33?

Correct AnswerverifiedShow Answer

GASB requires both extraordinary and special items to be reported separately after other financing sources and uses in the general and special revenue fund financial statements.

Correct AnswerverifiedShow Answer

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