1. In the government-wide statements, Internal Service Funds are a(n) ______ activity, whereas Enterprise

Funds are typically a(n) ______ activity.

A. business-type; governmental

B. governmental; business-type

C. restricted; unrestricted

D. unrestricted; restricted

2. Internal Service funds are reported in the fund-basis statements only.

True False

3. Norton County operated a landfill, and accounted for it as an enterprise fund. The closure and post-closure

care costs are estimated to be $20,000,000. It is estimated that the capacity of the landfill is 5 million tons of

waste and that waste will be accepted for 10 years. During 2015, 750,000 tons of waste was accepted by the

landfill. The charge for closure and post-closure care costs for 2015 would be:

A. $750,000.

B. $2,000,000.

C. $3,000,000.

D. Impossible to determine from the information given.

4. A Special Revenue Fund may not have a positive Unassigned Fund Balance.

True False

5. Receivables from sales taxes are recorded in the period that the retailer submits the taxes to the government.

True False

6. Which of the following is true of the Statement of Net Position for proprietary funds?

A. A classified format is used in which current assets, noncurrent assets, current liabilities, and noncurrent

liabilities are presented separately.

B. Separate disclosure is required for major enterprise funds and a total for all non-major enterprise funds.

C. Both A and B are correct.

D. Neither A nor B are correct.

7. When would a special revenue fund be deemed to have satisfied the eligibility requirement of a

reimbursement-type federal grant, under GASB Statement 33?

A. Only after work is completely finished for the project.

B. When a plan for use of the funds has been developed and approved.

C. Only as qualified expenditures are incurred.

D. When the grant is first approved by the granting agency.

9. All of the governmental funds except permanent funds use the modified accrual basis of accounting.

True False

10. The Proprietary Fund Statement of Net Position may choose whether to classify assets and liabilities

between current and long-term.

True False

11. Positive fund balances of capital projects funds are classified as nonspendable, restricted, committed, or

assigned.

True False

12. Long term liabilities of an enterprise fund are reported in the proprietary fund statement and in governmentwide

statements.

True False

13. The Expenditures control account in the General Fund is debited when:

A. Supplies are ordered.

B. The budget is recorded.

C. The books are closed at the end of the year.

D. Equipment previously ordered is received.

14. Debt service funds use the same measurement focus and basis of accounting as:

A. Internal service funds.

B. Special revenue funds.

C. Both (a) and (b).

D. None of the above.

15. According to GASB Statement 34, restricted net assets are those that are the result of constraints from:

A. Imposed by law though constitutional provisions

B. Imposed by enabling legislation

C. Imposed by creditors or grantors

D. All of the above

16. When governments operate landfills as enterprise funds, which of the following is correct?

A. GASB requires that certain post-closure costs be estimated and accrued during the period the landfills

receive solid waste.

B. GASB requires that a portion of future estimated costs be charged as an expense and liability of the landfill

using units-of-production method as waste is accepted.

C. The purpose of recording post-closure expenses and liabilities is to match the estimated costs with the

revenues during the period of time the waste is accepted.

D. All of the above are correct

17. Proprietary funds are required to have a Statement of Revenues, Expenses, and Change in Fund Net

Position, a Statement of Net Position, but not a Statement of Cash Flows.

True False

18. In February, X City ordered $550,000 of supplies. On March 17th it received all of the ordered supplies and

an invoice of $551,000. Which of the following would be recorded upon receipt of the supplies and invoice?

A. Debit Encumbrances Control for $550,000.

B. Debit Encumbrances Control for $551,000.

C. Debit Budgetary Fund Balance - Reserve for Encumbrances for $550,000.

D. Debit Budgetary Fund Balance - Reserve for Encumbrances for $551,000.

19. If the government is primarily or secondarily liable for the payment of debt principal and interest for a

special assessment project:

A. The tax levy and debt service expenditures should be recorded in an internal service fund

B. A special revenue fund should account for the proceeds of the debt and construction expenditures

C. The project is accounted for within governmental type funds as if it were a governmental project

D. The debt is not recorded in the government-wide statements

20. In the General Fund, revenues are recognized when earned and available.

True False

21. Interfund services purchased by the General Fund are recognized as:

A. Transfers Out.

B. Decreases in Fund Balance.

C. Expenditures.

D. None of the above.

22. An example of an activity that would not normally be accounted for in an internal service fund would be:

A. Motor pool.

B. Print shop.

C. Garbage collection.

D. Central storeroom.

23. A construction contract was issued for an addition to the county jail in the amount of $2,300,000. When the

project was approximately half finished, the contractor submitted an invoice for payment of $1,150,000. Which

partial entry below is not required to record this transaction?

A. Credit Contracts Payable $1,150,000.

B. Debit Expenditures - Capital Outlay $1,150,000.

C. Credit Encumbrances Control $2,300,000.

D. Credit Encumbrances Control $1,150,000.

24. Most interfund transfers are not eliminated in the government-wide statements.

True False

25. Internal Service Funds account for activities that produce goods or services to be provided to outside

customers on a cost reimbursement basis.

True False

26. Expenditures for claims and judgments and landfill post-closure care costs of governmental funds should be

recognized to the extent that the liabilities are going to be paid with available resources.

True False

27. When using debt service accounting, interest on long term debt is not to be accrued unless the payment is

due in no more than one month and the government has resources available for payment.

True False

28. The four categories on the Statement of Cash Flows for a proprietary fund are operating, non-capital

financing activities, capital and related financing activities, and investing activities.

True False

29. Private-purpose Trust Funds benefit individuals, private organizations, or other governments.

True False

30. The following description provides the best definition for which fund: Accounts for resources that are

legally restricted and both earnings and principal may be used to support government programs.

A. Capital projects.

B. Special Revenue.

C. General Fund.

D. Permanent.

31. Under the purchases method to account for supplies inventory, an asset is recorded when inventories are

acquired, and the expenditure is recorded when the supplies are consumed.

True False

32. Which of the following lease criteria would not qualify a lease as a capital lease?

A. The lease transfers ownership of the property to the lessee by the end of the lease term.

B. The lease contains an option to purchase the leased property at its fair market value.

C. The lease term is equal to or greater than 75% of the estimated economic life of the leased property.

D. The present value of the minimum lease payments equals or exceeds 90% of the fair value of the leased

property.

During the fiscal year ended December 31, 2015, the City of Johnstown issued 6% general obligation serial

bonds in the amount of $2,000,000 at 102 ($2,040,000) and used $1,980,000 of the proceeds to construct a fire

station. The $40,000 premium was transferred to a debt service fund. The $20,000 left in the capital projects

fund at the end of the project was later transferred to the debt service fund. The bonds were dated April 1, 2015

and paid interest on October 1 and April 1. The first of 10 equal annual principal payments was due on April 1,

2016.

33. How would the $40,000 premium be accounted for?

A. Amortized to interest expenditure in the debt service fund.

B. As another financing source in the debt service fund.

C. Both (a) and (b) above.

D. None of the above.

34. How would the bond sale be recorded?

A. As a liability in the debt service fund.

B. As a liability in the capital projects fund.

C. As another financing source in the debt service fund.

D. As another financing use in the capital projects fund.

35. A December 2015 year-end government should record which of the following as expenditures:

A. Salaries Payable due January 20, 2015.

B. Bond Payable that matures January 30, 2015.

C. Bond Payable that matures February 14, 2015.

D. Both A & B.

36. Which of the following funds typically record budgets?

A. General Funds, special revenue funds, capital projects, debt service, and permanent.

B. Only General Funds.

C. General Funds and permanent funds.

D. General Funds and special revenue funds.

37. Which of the following statements is not correct?

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.

38. Governmental fund financial statements are to be prepared on the accrual basis of accounting.

True False

39. What is the appropriate accounting for the signing of a contract to build a new water treatment facility by an

Enterprise Fund?

A. Debit Encumbrances.

B. Credit Budgetary Fund Balance - Reserve for encumbrances.

C. Both A & B.

D. No entry is required.

40. When a governmental unit is primarily or secondarily liable for the debt, debt proceeds for special

assessment obligations levied for the construction phase of a capital improvement project should be reported in

which of the following fund types?

A. General.

B. Capital projects.

C. Agency.

D. Debt service.

41. Enterprise funds use the economic resources measurement focus and accrual basis of accounting.

True False

42. Which of the following occurs when uncollectible delinquent taxes are written off? (Ignore interest and

penalties)

A. Delinquent Tax Receivable is increased.

B. Accounts receivable goes down and the Estimated Uncollectible Taxes Account is increased.

C. Net receivables remain unchanged.

D. Uncollectible Delinquent Tax Expense is increased.

43. An Enterprise Fund has an indefinite life.

True False

44. Which of the following is a common source of funding for capital projects?

A. Issuance of long term debt

B. Proceeds of dedicated taxes

C. Grants from other governments

D. All of the above are sources of funding for capital projects

45. Which of the following is not true regarding permanent funds?

A. Permanent funds are considered governmental funds.

B. Permanent funds use the current financial resources measurement focus and modified accrual basis of

accounting.

C. Permanent funds are appropriate when a gift must be invested and the proceeds used to benefit individuals or

organizations.

D. Major permanent funds would be reported in the Governmental Funds Statement of Revenues, Expenditures,

and Changes in Fund Balances.

46. When a special revenue fund accounts for grants that are awarded on a reimbursement basis, revenues are

recognized only after qualified expenditures have been recognized.

True False

47. Major sources of funding for Capital Project Funds include the issuance of long term debt and grants from

other governmental units.

True False

48. An encumbrance in a capital project fund is created

A. When the project is paid for in full.

B. When the work on the project begins.

C. When the work on the project is finished.

D. When a contract is signed or issued.

49. General Fund resources were expended in the amount of $185,000 to purchase a new fire truck. The

General Fund would debit:

A. Expenditures Control.

B. Capital assets-Motor Vehicles.

C. Both (a) and (b) above.

D. None of the above; no entry is made in the General Fund when a motor vehicle is purchased because only

current financial resources are recorded in the General Fund.

50. The journal entry to record the budget of a Special Revenue Fund would include:

A. A debit to appropriations Control

B. A debit to Estimated Revenues Control

C. A credit to Estimated Revenues Control

D. None of the above, Special Revenue Funds do not record budgets