(Multiple choice-General and Special Revenue Funds)

1. The budget of Laxey County shows estimated revenues in excess of appropriations. When preparing budgetary entries at the beginning of the fiscal year, an increase will be recorded in which of the following accounts?

a. Encumbrances

b. Due from other funds

c. Budgetary fund balance

d. Reserve for encumbrances 2. What are reversions of property of persons not leaving a will, and with no known relatives, to a state called?

a. Reversions

b. Entitlements

c. Escheats

d. Contributions 3. Which of the following involves a routine transfer from the General Fund to a Debt Service Fund, to provide resources to pay interest and principal on a bond issue?

a. An interfund reimbursement

b. An interfund transfer

c. An interfund loan

d. An interfund service provided and used 4. At the end of FY 2004, Carson City has outstanding encumbrances of $\$ 15,000$. Although the city follows a policy of allowing outstanding encumbrances to lapse, it plans to honor the related purchase orders in FY 2005. The management of the city wants users of its financial statements to be aware of these outstanding purchase orders. Therefore, at year-end, the city's accountant should take which of the following actions?

a. Credit Fund balance reserved for encumbrances.

b. Credit Appropriations.

c. Credit Unreserved fund balance.

d. Debit an expenditure account.

5. Which of the following revenues of the General Fund are usually recorded before they are actually received?

a. Sales taxes

b. Property taxes

c. Fines and penalties

d. Parking meter receipts 6. If the City of Castletown sells an ambulance, which had been purchased by its General Fund several years earlier, to a local rock group, the entry to record this sale on the books of the General Fund should include which of the following?

a. A credit to Revenues-proceeds from sale of general fixed assets

b. A debit to Unreserved fund balance

c. A debit to Encumbrances-capital equipment

d. A credit to a fixed asset account 7. The town council of Bayou Brilleaux adopted a budget for FY 2004 that indicated revenues of $\$ 750,000$ and appropriations of $\$ 800,000$. Which entry is used to record this budget into the accounts?
8. Which of the following will increase the fund balance of a governmental unit at the end of a fiscal year?

a. Estimated revenues are less than expenditures and reserve for encumbrances.

b. Appropriations are less than expenditures and encumbrances.

c. Revenues are greater than expenditures and encumbrances.

d. Appropriations are greater than estimated revenues.
9. What does a governmental unit record in its Fund balance reserved for encumbrances account?

a. Current-year purchase orders that will be honored the following year

b. Expenditures that were made in the current year for which payment will be made the following year

c. Excess expenditures of the prior year that will be offset against the current-year budgeted amounts

d. Unanticipated expenditures of the prior year that become evident in the current year 10. The budget of the General Fund of the City of Dhoon Glen shows an appropriation for capital equipment of $\$ 150,000$. So far a fire engine,

costing $\$ 50,000$, has been received and paid for. Another fire engine, expected to cost $\$ 60,000$, has been ordered and an encumbrance for this amount is outstanding. How much can the city legally spend for a third fire engine this year?

a. $\$ 100,000$

b. $\$ 90,000$

c. $\$ 40,000$

d. $\$ 0$
11. Which of the following accounts of a governmental unit is (are) closed out at the end of the fiscal year?

12. Which of the following is an appropriate basis of accounting for the General Fund of a governmental unit?

13. Which of the following is not included among the financial reporting requirements of the General Fund of a city?

a. Balance sheet

b. Statement of revenues, expenditures, and changes in fund balance

c. Budgetary comparison schedule

d. Statement of cash flows 14. In 2004 Manx City received a capital grant from the federal government to purchase a fleet of horse-drawn streetcars for its Promenade line. It also received a grant from the state to cover certain operating costs of this line. Because of an unexpectedly short operating season, only 60 percent of the operating grant was spent by the end of 2004 and the city does not expect to spend the remainder until mid-2005. Because of an unexpected increase in the price of horse-drawn streetcars, however, the entire capital grant was spent by the end of the first half of 2004. With respect to these grants, what should Manx City record as revenues from grants on its FY 2004 financial statements?

Transcribed Image Text:

DR CR a. Estimated revenues Reserve for deficits 750,000 50,000 Appropriations 800,000 b. Appropriations 800,000 Budgetary fund balance 50,000 Estimated revenues 750,000 c. Estimated revenues 750,000 Budgetary fund balance 50,000 Appropriations d. Only a memorandum entry is necessary 800,000