Question
An encumbrance is a commitment. It represents resources which are now committed for a specified use. a. False b. True 2. City officials are interested
An encumbrance is a commitment. It represents resources which are now committed for a specified use.
a.
False
b.
True
2.
City officials are interested in the unencumbered balance because it indicates the amount of the appropriation that has not yet been spent or committed for future expenditures.
a.
True
b.
False
3.
All of these are true about the Fund balance account of a governmental unit except
a.
It normally has a credit balance.
b.
Can be equated to the equity account(s) of a commercial enterprise
c.
It is the same account used for both actual and budgetary records
d.
This amount represents the difference between the assets and the liabilities of the organization.
4.
The purpose of the modified accrual basis of accounting is to measure the Capital maintenance in the Proprietary fund financial statements.
a.
FALSE
b.
TRUE
5.
A property owner after payment of taxes received tax abetment due to his commitments to a local regulations, this will be handled by
a.
No need for adjustment
b.
Allowance for uncollectible property taxes
c.
Estimated discount on property taxes
d.
Allowance for property tax refund
6.
When management set up the Allowance for uncollectible property tax is recorded on the credit side of the entry.
a.
False
b.
True
7.
General Fund expenditures for uncollectible accounts receivable should be reported in the period that the receivable is
a.
Legally due and payable.
b.
Written off as uncollectible.
c.
No expenditure is recorded
d.
Established.
8.
In which of the following financial statements should a government not report depreciation expense?
a.
Government-wide financial statements
b.
Governmental fund financial statements
c.
Fiduciary fund financial statements
d.
Proprietary fund financial statements
9.
In the appropriation ledger, the amount available for appropriation (free balance) is equal to:
a.
The total appropriation minus expenditure
b.
The total appropriation minus both outstanding encumbrances and expenditures.
c.
The total appropriation minus outstanding encumbrances.
d.
The total appropriation minus total invoices paid
10.
Estimated losses on uncollectible taxes receivable should be accounted for as an allowance for uncollectible accounts and bad debt expense.
a.
True
b.
False
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ANSWER 1 TRUE The purpose and main benefit of encumbrance accounting is avoiding budget overspending by showing open commitments as part of projected expenses Encumbrances are important in determining ...Get Instant Access to Expert-Tailored Solutions
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