E4-1 (Multiple Choice) Identify the best answer for each of the following: 1. 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 Revenue Fund is established only if a revenue source is restricted or committed to expenditure for a specific purpose other than debt service and capital outlay. c. A governmental entity may have only one Special Revenue Fund. d. A Special Revenue Fund uses the total economic resources measurement focus. 2. The net revenue approach can be best described as a. being consistent with the reporting of revenues in the private sector. b. evidenced by the recognition of bad debt expense for revenues earned but deemed uncol- lectible by a governmental fund. c. the reporting of a reduction of revenue for those revenues deemed to be uncollectible. d. the approach used to account for uncollectible revenues in both governmental and pro- prietary funds. 3. 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 uncollectible (based on historical experience). Which of the following entries would be made in the General Fund? a. Taxes Receivable-Current Tax Revenues... $775,000 $775,000 b. Taxes Receivable-Current $759,500 Tax Revenues... $759,500 c. Taxes Receivable-Current.. $775,000 Allowance for Uncollectible Taxes-Current $ 15,500 Tax Revenues... 759,500 d. Taxes Receivable-Current $775,000 Bad Debt Expenditures. 15,500) Allowance for Uncollectible Taxes-Current $ 15,500 Tax Revenues... 775,000 4. Refer to the previous question. What amount of tax revenues should be recorded in the Revenues Subsidiary Ledger for the transaction? a. $744,310. b. $759,500. c. $775,000. d. $0-revenues should be recorded only in the Revenues Subsidiary Ledger when the cash is actually received. 5. 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. The interfund loan will be repaid in equal installments over 10 years, starting next fiscal year. (b) It was discovered that $5,500 of expenditures that were supposed to have been charged to the General Fund were charged to the Special Revenue Fund in