Questions and Answers of Accounting For Governmental And Nonprofit Entities

Robeson County has a Capital Projects Fund for its courthouse renovations. The appropriation authority for the fund continues until the end of the project. The voters approved a bond issue for the
Robeson County has a Capital Projects Fund for its courthouse renovations. The appropriation authority for the fund continues until the end of the project. The voters approved a bond issue for the
The city of Nancy is installing a lighting system in the Harvey Subdivision, which is considered to be a major general government capital project for the city. The system is being financed by levying
The city of Nancy is installing a lighting system in the Harvey Subdivision, which is considered to be a major general government capital project for the city. The system is being financed by levying
The city of Nancy is installing a lighting system in the Harvey Subdivision, which is considered to be a major general government capital project for the city. The system is being financed by levying
he city of Nancy is installing a lighting system in the Harvey Subdivision, which is considered to be a major general government capital project for the city. The system is being financed by levying
Luke County issued $20,000,000 par of capital improvement bonds for a general government project. The bonds were issued at a discount of 2% of par. The bond indenture requires that $500,000 of the
Obtain a copy of a recent comprehensive annual financial report (CAFR) of a state or local government from the government, the Internet, your instructor, or a library. You should supplement your
Which of the following may be reported as governmental fund revenue?a. Taxes.b. Fines and forfeitures.c. Special assessments.d. Payments in lieu of taxes from other governments.e. All of the above
Generally, sales tax revenues should be recognized by a local government in the perioda. in which the local government receives the cash.b. that the underlying sale occurs, whether or not the local
On June 1, 20X4,a school district levies the property taxes for its fiscal year that will end on June 30, 20X5. The total amount of the levy is $1,000,000, and 1% is expected to be uncollectible.Of
A city levied $2,000,000 of property taxes for its current fiscal year. The city collected$1,700,000 cash on its taxes receivable during the year and granted $72,000 in discounts to taxpayers who
What would the answer be to number 4 if the city also collected $100,000 of the prior year’s taxes during the first two months of the current fiscal year and another $53,000 of the prior year’s
A county received $3,000,000 from the state. Of that amount, $1,500,000 was received under an entitlement program and was not restricted as to use. The other $1,500,000 was received under a grant
A Special Revenue Fund expenditure of $40,000 was initially paid from and recorded in the General Fund. The General Fund is now being reimbursed. The General Fund should reporta. revenues of
A state received an unrestricted gift of $80,000 of stocks and bonds from a private donor. The General Fund statement of revenues, expenditures, and changes in fund balance should reporta. revenues
A city has formalized tax liens of $50,000 against a property that is subject to delinquent taxes receivable. The estimated salable value of the property is $39,000. The remaining total balances in
Which of the following criteria is a factor when determining property tax revenue recognition?a. Whether the taxes collected were for future fiscal years' taxes.b. Whether the taxes were collected no
Property taxes billed but not collected by the end of the fiscal period or within 60 days following the end of the fiscal period should bea. charged to bad debt expense.b. reported as deferred
Wakefield Village levies $6,255,000 in property taxes at the beginning of its fiscal year. Two percent is deemed to be uncollectible. The proper general ledger journal entry that would be made when
Which of the following statements reflects the proper accounting treatment for grant revenues?a. Unrestricted grants are recognized as revenue in governmental funds when cash is received.b.
Which of the following governmental fund revenues are typically recognized only as cash is collected?a. Speeding fines.b. Inspection fees.c. Sales taxes.d. All of the above are typically recorded as
GASB Statement No. 31 requiresa. all investment income, including increases or decreases in the fair value of all investments, to be reported as revenue in the operating statement.b. changes in the
Which of the following statements regarding the accounting and reporting requirements for governmental fund investments is false?a. Certain governmental fund investments may be reported at amortized
If a government has an established legal claim associated with a revenue source, but has not collected any of the revenues, governmental fund revenuesa. Should be recognized.b. Should be recognized
If a government has collected revenues for which it has a valid legal claim, governmental fund revenuesa. May be reported in the current year if that is the government's policy.b. May only be
Which criteria are sufficient for grant revenues to be recognized in a government's General Fund?a. Cash must be received by year-end or within not more than 60 days (or shorter period specified by
(Investments) Aslan County purchased $3,000,000 of bonds as a General Fund investment on March 1, 20X7, for $3,060,000 plus four months accrued interest of $80,000. The bonds mature in four years and
(Property Tax Allocation) (a) The 20X7, 20X6, and 20X5 tax rates for the city of Yonker are: General Fund Library Fund Municipal Bonds-Redemptions Rate per $100 of Assessed Value 20X7 20X6 20X5 $1.20
(Investment Income)a. Prepare the general journal entries to record the following transactions in the General Fund General Ledger of Alderman City:1. Purchased investments in bonds at January 1,
(Tax Liens) A county decided to keep land it bid in at its property tax sale to use for parks and recreation purposes. The redemption period has passed, and the county has a valid deed to the land.
(Property Taxes) Prepare general journal entries to record the following transactions in Menefee City's General Ledger and make adjusting entries, if needed:1. Menefee City levied property taxes of
(Revenue Recognition) For each situation. outlined in the following chart, explain how the year-end balance sheet and statement of revenues, expenditures, and changes in fund balances of a
(Grant Revenues) The City and County of PreVatte received a state grant for revitalizing its downtown district. The grant of $18,000,000 requires the government to file for reimbursement after
(GL and SL Entries; Statement) 1. The following are the estimated revenues for a Special Revenue Fund of the city of Marcelle at January 1, 20X5: Taxes...... Interest and penalties Fines and fees....
(Research Problem) Obtain a copy of a recent comprehensive annual financial report (CAFR) of a state or local government from the government, the Internet, your professor, or a library.Required(1)
(Investment Revenue-City of Phoenix, Arizona) The City of Phoenix, Arizona, has a variety of General Fund investments. The city had General Fund investments at July 1, 20X5, with a fair value of
(Property Taxes-City of Des Moines, Iowa) The city of Des Moines, Iowa, reported General Fund property taxes receivable (net of uncollectibles) of $49,015,040 on June 30, 20X5, and Deferred Revenues
When is fully reserving fund balance for inventory appropriate? Explain.
In governmental funds, expenditures should be recognized in the period in which a fund liability is incurred, though there are some exceptions to the general rule. Which of the following is not an
Which of the following is not a common type of governmental fund expenditure?a. Capital outlay.b. Debt service.c. Salaries and wages.d. Depreciation. e. All of the above are common types of
An Expenditures account in a General Fund should be charged for materials and suppliesa. only as the materials and supplies are being consumed.b. only as the materials and supplies are purchased.c.
Both the periodic and perpetual inventory systems may be used witha. the consumption method.b. the purchases method.c. either the consumption or purchase methods.d. the consumption method if
Which of the following statements is true concerning the accounting and financial reporting for capital leases in governmental funds?a. Governmental entities apply essentially the same criteria as
Assume a governmental entity enters into a capital lease for the purchase of seven new public safety vehicles. The present value of the future lease payments is $224,750, and a down payment of
A state pays salaries and wages of $118 million to General Fund employees during a year. Unpaid, accrued salaries were $3 million at the beginning of the year and $6 million at year- end. General
Which of the following events could require a restatement of the beginning fund balance of a governmental fund?a. Management changes the method of accounting for inventory to FIFO.b. A claim that was
Define the following interfund transaction terms and explain how each is accounted for and reported by a municipality: (a) interfund reimbursement, (b) interfund loan, (c) interfund services provided
The clerk of the City of Wilmaton is revising the city accounting system so that she can report expenditures by function, organization unit, activity, character, and object class, as well as by fund.
Which of the following is a characteristic of a Special Revenue Fund that differentiates it from a General Fund?a. A Special Revenue Fund is required to be budgeted on a multi-year basis.b. A Special
The net revenue approach can be best described asa. being consistent with the reporting of revenues in the private sector.b. evidenced by the recognition of bad debt expense for revenues earned but
Assume that Nathan County has levied its current year taxes and all revenue recognition criteria for property taxes have been met. The amount levied was $775,000, of which 2% is deemed to be
Assume the following transactions that affected the General Fund and the Special Revenue Fund took place during the year. (a) $50,000 was borrowed from the General Fund for the Special Revenue Fund.
Which of the following statements is true concerning assigned fund balance?a. Assigned fund balance reflects a government's intent to use resources for a specific purpose.b. Assigned fund balance is
The GAAP-based statements that are required to be presented for the General Fund are:a. Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balances.b. Balance Sheet; Statement
A city levies property taxes of $500,000 for its General Fund for a year and expects to collect all except the estimated uncollectible amount of $5,500 by year-end. To reflect this information, the
At year-end a school district purchases instructional equipment costing $100,000 by issuing a short-term note to be repaid from General Fund resources. This transaction should be reflected in the
A state borrowed $10,000,000 on a nine-month, 9% note payable to provide temporary financing for the General Fund. At year-end, the note has been outstanding for six months. The state should report
Charges for services rendered by a county's General Fund departments totaled $500,000, of which $5,500 is expected to be uncollectible. The county expects to collect $494,500 by year-end. To reflect
If the Warren County General Fund has a long-term receivable from another county fund (and the use of the proceeds when collected is not restricted, committed, or assigned), the receivable will be
In the Statement of Revenues, Expenditures, and Changes in Fund Balances, transfers must be reporteda. in a separate section immediately following revenues.b. in a section immediately following the
The minimum expenditure classifications required in the basic financial statements for governmental funds area. fund and function or program.b. fund, character, and function or program.c. fund,
Which fund balance category is affected by having inventory and prepaid items at year-end?a. Assigned fund balance.b. Committed fund balancec. Nonspendable fund balanced. Restricted fund balancee.
Which fund balance category may be increased by encumbrances outstanding?a. Assigned fund balanceb. Committed fund balancec. Nonspendable fund balanced. Restricted fund balancee. Unassigned fund
The fund balance category that requires formal action of the highest level decision-making body of a government isa. assigned fund balance.b. committed fund balance.c. nonspendable fund balance.d.
The GAAP fund balance classifications are described as reflecting a hierarchy of constraints on resource use. From the most constrained to the least constrained, what is the order of the hierarchy?a.
The fund balance category that can have either a positive or a negative balance isa. assigned fund balance.b. committed fund balance.c. nonspendable fund balance.d. restricted fund balance.e.
The fund balance category used to reflect a positive residual of assets less liabilities in any fund other than the General Fund isa. assigned fund balance.b. committed fund balance.c. nonspendable
The fund balance category that must be zero if unassigned fund balance is a deficit isa. assigned fund balance.b. committed fund balance.c. nonspendable fund balance.d. restricted fund balance.e. All
(Statement of Revenues, Expenditures, and Changes in Fund Balance) Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the year ended June 30, 20X8, for the General Fund of
(Statement of Revenues, Expenditures, and Changes in Fund Balance) Using the follow- ing information, prepare the Statement of Revenues, Expenditures, and Changes in Fund Balance for the City of
(Internet Research) Obtain copies of the General Fund and Special Revenue Funds financial statements from a state or local government, the Internet, your professor, a library, or elsewhere.a. Study
(Financial Statement Preparation-City of Savannah, Georgia) Presented on the following page is the Preclosing Trial Balance for the City of Savannah, Georgia's General Fund as of December 31, 20X6
Chapter 3 illustrated the use of a single account (Fund Balance) to account for fund balance during the year even though GAAP financial statements must present up to five fund balance
General budgets are most common for which of the following funds?a. General Fund.b. Special Revenue Fund.c. Permanent Fund.d. All of the above.e. Items a and b only. If. Items a and c only.
Special budgets are best defined asa. budgets that include special items.b. budgets prepared for any fund other than the General, Special Revenue, and Debt Service Funds.c. budgets that are always
Which of the following statements about capital budgets is true?a. Most capital program budgets cover a period of two to six years.b. The current segment of a capital program is typically included as
Which of the following statements is false?a. Generally Accepted Accounting Principles (GAAP) dictate the basis of budgeting for all governmental funds.b. Zero-base budgeting (ZBB) is an acceptable
Which of the following statements is true?a. Encumbrances are equivalent to expenditures, and encumbrances outstanding at the end of a year should be reported as liabilities.b. No expenditure can be
Appropriation requests for the General Fund are approved, controlled, accounted for, and reported in which of the following expenditure categories?a. Function or program.b. Organizational unit.e
Which of the following statements would be true concerning budgetary integration?a. The integration of budgetary accounts into the general ledger does not affect the asset and liability accounts.b.
The budgetary basis of accounting isa. Determined by a governmental entity's governing body or by law or regulation.b. Dictated by GAAPe. The same for all governmental entitiesd. Always the cash
Which of the following GAAP requirements for budgetary reporting is true?a. Original and final budget amounts are required for the General Fund only,b. Original and final budget amounts are required
The following GAAP requirements for reporting are true excepta. Budgetary comparisons for the General Fund and major Special Revenue Funds must include expenditure data that is at least as detailed
A government adopts its General Fund budget on the GAAP basis as required by regulations in its state. Encumbrance accounting is used during the year, and it distinguishes unreserved fund balance and
Which of the following transactions requires entries in an Expenditures Subsidiary Ledger?a. Legal adoption of the General Fund budget.b. Purchase of equipment on account. e Accrual of salaries and
Which of the following items does a government with a modified accrual and encumbrances basis budget report differently in its budgetary basis statement of revenues, expenditures, and changes in fund
The budget data presented in a school district General Fund statement of revenues, expenditures, and changes in fund balances-budget and actual-are to bea. The original, legally adopted budget.b. The
Allotments are best defined as a. legislative appropriations subdivided into more detailed expenditure categories by the executive branch.b. legislative appropriations subdivided by time periods.c.
(Budgetary Entries General Ledger) The city of Cherokee Hill adopted its fiscal year 20X8 General Fund budget, using the modified accrual basis of accounting, on January 1, 20X8. Budgeted revenues
(General Ledger-Subsidiary Ledgers Relationship. Closing Entries, Budgetary Statement) The City Council of the City of Eastover adopted the following budget for its General Fund for 20X8. The budget
(Operating Budget Preparation) The finance director of the Bethandy Independent School District is making preliminary estimates of the budget outlook for the General Fund for the 20X8 fiscal year.
This problem is based on the information about the Murphy County General Fund budgeted and actual transactions and events described in Problem 4-2.Required1. Prepare a budgetary comparison statement
(GL and SL Entries) Prepare the journal entries (budgetary and actual) to record the following transactions and events in the General Ledger, Revenues Ledger, and Expenditures Ledger of a local
(GL and SL Entries) Prepare in proper form the journal entries (budgetary and actual) to record the following transactions and events in the General Ledger, Revenues Ledger, and Expenditures Ledger
(Research and Analysis) Obtain a recent state or local government annual operating budget from a library, your professor, the Internet, or elsewhere, and submit a brief report on this research
The body with primary accounting standards-setting authority for state and local governments is thea. American Institute of Certified Public Accountants.b. Financial Accounting Standards Board.c.
The body with primary accounting standards-setting authority for colleges and universities is thea. National Association of College and University Business Officers.b. Financial Accounting Standards
A governmental (expendable) fund accounting entitya. is often useful in accounting for general government activities but is optional(expendable).b. includes only financial assets and related
In which of the following situations would the amounts of expense and expenditure for the period differ?a. An aa uses and is billed for utilities but has paid only half of the amount billed at year

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