Multiple choice Questions
1. Which of the following is not a governmental fund?
a. Special Revenue Fund.
b. Internal Service Fund.
c. Capital Projects Fund.
d. Debt Service Fund.
2. What is the purpose of a Special Revenue Fund?
a. To account for revenues legally restricted as to expenditure.
b. To account for ongoing activities.
c. To account for gifts when only subsequently earned income can be expended.
d. To account for the cost of long-lived assets bought with designated funds.
3. What is the purpose of Enterprise Funds?
a. To account for operations that provide services to other departments within a government.
b. To account for asset transfers.
c. To account for ongoing activities such as the police and fire departments.
d. To account for operations financed in whole or in part by outside user charges.
4. Which of the following statements is true?
a. There are three different types of proprietary funds.
b. There are three different types of fiduciary funds.
c. There are five different types of fiduciary funds.
d. There are five different types of governmental funds.
5. A government expects to receive revenues of $400,000 but has approved expenditures of $430,000. The anticipated shortage will have an impact on which of the following terms?
a. Interperiod equity.
b. Modified accrual accounting.
c. Consumption accounting.
d. Account groups.
6. A citizen of the City of Townsend gives it a gift of $22,000 in investments. The citizen requires that the investments be held but any resulting income must be used to help maintain the city's cemetery. In which fund should this asset be reported?
a. Special Revenue Funds.
b. Capital Projects Funds.
c. Permanent Funds.
d. General Fund.
7. Which of the following statements is correct for governmental funds?
a. Fund-based financial statements measure economic resources.
b. Government-wide financial statements measure only current financial resources.
c. Fund-based financial statements measure both economic resources and current financial resources.
d. Government-wide financial statements measure economic resources.
8. Which of the following statements is correct for governmental funds?
a. Fund-based financial statements measure revenues and expenditures based on modified accrual accounting.
b. Government-wide financial statements measure revenues and expenses based on modified accrual accounting.
c. Fund-based financial statements measure revenues and expenses based on accrual accounting.
d. Government-wide financial statements measure revenues and expenditures based on accrual accounting.
9. During the current year, a government buys land for $80,000. Which of the following is not true?
a. The land could be reported as an asset by the business-type activities in the government-wide financial statements.
b. The land could be reported as an asset by the governmental activities in the government-wide financial statements.
c. The land could be reported as an asset by the proprietary funds in the fund-based financial statements.
d. The land could be reported as an asset by the governmental funds in the fund-based financial statements.
10. Which of the following statements is true concerning the recording of a budget?
a. At the beginning of the year, debit Appropriations.
b. A debit to the Budgetary Fund Balance account indicates an expected surplus.
c. At the beginning of the year, debit Estimated Revenues.
d. At the end of the year, credit Appropriations.