QUESTION 1

1. MC7-10. The city of Spainville owns a golf course. Fees are charged to play on the course, but they only cover about half of the costs of operations. This activity should be reported in:

   		The General Fund.
   		An Internal Service Fund.
   		An Enterprise Fund.
   		Either a. or c.
   		Either b. or c.

1 points

QUESTION 2

1. MC7-11. Which of the following would not be reported in a proprietary fund?

   		Bonds payable
   		Capital assets
   		Inventory
   		Other financing source-long-term debt issued
   		Revenues

1 points

QUESTION 3

1. MC7-12. What is the measurement focus and basis of accounting used for proprietary funds?

   		Current financial resources measurement focus and modified accrual basis of accounting
   		Economic resources measurement focus and the accrual basis of accounting
   		Current financial resources measurement focus and the accrual basis of accounting
   		Economic resources measurement focus and the modified accrual basis of accounting

1 points

QUESTION 4

1. MC7-13. Governmental GAAP requires Enterprise Funds to be used in which of the following situations?

   		An activity issues debt that is secured solely by a pledge of net revenues from fees or charges of the activity.
   		Laws or regulations require the activity to recover its costs of providing services including capital costs with user fees and charges.
   		An activity establishes user fees and charges based on pricing policies designed to recover all costs, including capital costs.
   		All of the above.
   		None of the above.

1 points

QUESTION 5

1. MC7-14. Governmental GAAP requires Internal Service Funds to be used in which of the following situations?

   		An activity issues debt that is secured solely by a pledge of net revenues from fees or charges of the activity.
   		Laws or regulations require the activity to recover its costs of providing services including capital costs with user fees and charges.
   		An activity establishes user fees and charges based on pricing policies designed to recover all costs, including capital costs.
   		All of the above.
   		None of the above.

1 points

QUESTION 6

1. MC7-15. The city of Bethville establishes an Internal Service Fund to account for printing services provided to the various departments of the government. Police chief, Winston Watson, authorizes the payment of $2,000 for printing services provided by the Printing Services Internal Services Fund. The accounting department makes the payment. What entry should be reported in the Printing Services Internal Service Fund for receipt of the payment?

   		DR Cash 2,000 CR Revenues 2,000
   		DR Cash 2,000 CR Transfer in from General Fund 2,000
   		DR Cash 2,000 CR Transfer in from Enterprise Fund 2,000
   		DR Due from General Fund 2,000 CR Revenue 2,000

1 points

QUESTION 7

1. MC7-16. Which of the following financial statements is not required for Internal Service Funds?

   		Statement of net position
   		Budgetary comparison statement
   		Statement of cash flows
   		Statement of revenues, expenses, and changes in net position
   		All of the above are required.

1 points

QUESTION 8

1. MC7-17. The city of Steveville is preparing its annual financial statement. A new employee, Victoria Watson, is responsible for preparing the basic financial statements for the city's three Internal Service Funds. Where should Victoria report the Internal Service Fund activity in the combined financial statements?

   		Any major Internal Service Funds should be reported in separate columns in the proprietary fund financial statements and nonmajor Internal Service Funds should be reported in a column with nonmajor Enterprise Funds.
   		Internal Service Funds should be reported in their own separate set of financial statements that shows a column for each major Internal Service Fund with the remainder of Internal Service Funds aggregated in a single column.
   		Internal Service Funds should be aggregated in a single column to the right of Enterprise Funds in the proprietary fund financial statements.
   		Internal Service Funds are not reported in the fund financial statements, but rather only reported as part of government-wide reporting.

1 points

QUESTION 9

1. MC7-18. The city of Trawville has a Water Enterprise Fund that provides potable water for use by the residents and businesses of the city. The Water Enterprise Fund also provides potable water to other city departments. The Water Enterprise Fund bills the General Fund ($1,800) and the Golf Course Enterprise Fund ($1,600) for their water use during the most recent month. What journal entry should be recorded in the Water Enterprise Fund?

   		DR Due from General Fund 1,800 DR Due from Golf Course Enterprise Fund 1,600 CR Revenues 3,400
   		DR Due from General Fund 1,800 DR Due from Golf Course Enterprise Fund 1,600 CR Expenditures 3,400
   		DR Due from General Fund 1,800 DR Due from Golf Course Enterprise Fund 1,600 CR Transfer in from General Fund 1,800 CR Transfer in from Golf Course Enterprise Fund 1,600
   		DR Expenditures 3,400 DR Due to General Fund 1,800 CR Due to Golf Course Enterprise Fund 1,600

1 points

QUESTION 10

1. MC7-19. An Enterprise Fund purchases $100,000 of capital assets for cash. How should the purchase of capital assets be reported in the Enterprise Fund?

   		DR Expenses-capital asset 100,000 CR Cash 100,000
   		DR Capital assets 100,000 CR Cash 100,000
   		DR Expenditures-capital outlay 100,000 CR Cash 100,000 d.None of the above.

1 points

QUESTION 11

1. MC7-20. Which of the following would you not expect to see in a statement of cash flows prepared for proprietary funds?

   		Cash flows from financing activities
   		Cash flows from noncapital financing activities
   		Cash flows from operating activities
   		All of the above are included in proprietary funds' statement of cash flows.

1 points

QUESTION 12

1. MC7-21. The city of Grigsby's Water Enterprise Fund enters into a lease agreement with Nguyen Leasing Company for new computer hardware. The present value of lease payments over the life of the four-year lease is $48,000. What journal entry would Grigsby accounting personnel make in the Water Enterprise Fund at the inception of the lease?

   		DR Computer expense 48,000 CR Lease payable 48,000
   		DR Intangible asset-lease 48,000 CR Lease payable 48,000
   		DR Expenditures-capital outlay 48,000 CR Other financing source-long-term lease 48,000
   		DR Capital asset-computer 48,000 CR Other financing source-long-term lease 48,000

1 points

QUESTION 13

1. MC7-22. Which of the following items is reported in a government's Enterprise Fund financial statements, but would not be reported in a publicly traded company's financial statements?

   		Other comprehensive income
   		Notes payable
   		Deferred inflows of resources
   		Investments

1 points

QUESTION 14

1. MC7-23. In a recent general election, the city of Perrier citizens approved plans for the city to build a public swimming pool. The city plans to charge fees to swimmers to cover the cost of building and operating the pool and to generate resources to repair and replace equipment when needed. In what fund type should the city report its new swimming pool activities?

   		The General Fund, because the pool was approved by the citizens.
   		In an Enterprise Fund, because a fee will be charged to users.
   		In a Capital Projects Fund, because fees will cover the cost of building the pool.
   		In an Internal Service Fund because fees will be generated to repair and replace equipment as needed.

1 points

QUESTION 15

1. MC7-24. Both Internal Service Funds and Enterprise Funds use flexible budgets to control their activities but don't incorporate these budgets into their accounts because:

   		Both fund types have a monopoly on the services they provide.
   		Encumbrance accounting is not a good source of control.
   		Flexible budgets change based on volume and are difficult to record in the accounts.
   		Both fund types use "marketplace" controls instead.

1 points

QUESTION 16

1. MC7-25. The city of Cool reports a Public Transportation Enterprise Fund. In its statement of net position as of December 31, 2018, the Fund reports, among other things, cash, and investments, depreciable capital assets and nondepreciable capital assets. Based on the information provided, which components of net position should the Enterprise Fund report?

   		Net investment in capital assets and unrestricted
   		Restricted, unrestricted, and net investment in capital assets
   		Nonspendable and committed
   		Net investment in capital assets and assigned