4-1 1. Under the modified accrual basis of accounting, revenues cannot be recognized a. Until cash has been collected b. Unless they will be collected within sixty days of year-end c. Until they are subject to accrual d. Until they are measurable and available 2. ‘‘Available’’ (as in ‘‘measurable and available’’) means a. Available to finance expenditures of the current period b. Subject to accrual c. Collectible d. Available for appropriation 3. Property taxes are an example of a. An imposed exchange transaction b. An imposed nonexchange transaction c. A derived transaction d. A government-mandated nonexchange transaction 4. To be considered ‘‘available,’’ property taxes must have been collected either during the government’s fiscal year or within a. The time it takes for the government to liquidate its obligations from the prior year b. Thirty days of year-end c. Sixty days of year-end d. The following fiscal year 5. For its fiscal year ending September 30, 2007, Twin City levied $50
6. Assume the same facts as in the previous example. How
much should Twin City recognize in property tax revenue
(in millions) in its government-wide statement of
7. Central City was awarded two state grants during its
fiscal year ending September 30, 2007: a $2 million
block grant that can be used to cover any operating
expenses incurred during fiscal 2008, and a $1 million
grant that can be used any time to acquire equipment
for its police department. For the year ending September
30, 2007, Central City should recognize in grant
revenue in its funds statements (in millions)
8. Assume the same facts as in the previous example. How
much should the city recognize in grant revenue in its
9. Assuming that a government will collect its sales taxes
in sufficient time to satisfy the ‘‘available'' criterion, it
would ordinarily recognize revenue from sales taxes in
its governmental fund statements
a. When the underlying sales transaction takes place
b. On the date the merchant must remit the taxes to
c. On the date the merchant must file a tax return
d. When the taxes are received by the government
10. Assuming that a government will collect its sales taxes
its government-wide statements
c. On the date the merchant must file a tax
You must have picked $20 instead of $15, I have answered the questions based on the amount offered (The $20).
Ok...I am willing to pay $20. And you should know that i appreciate your help and your prompt feedback. Thank you...
Payables, I do not mind accepting $15 for the question. What I meant to tell you is that experts answer questions based on the amount offered, so when you post a new question, I would be willing to answer it for $5 less (so if you intend to offer $15 on your next post, just address the post to me and I will answer it for $10.
Thank you for your kind words :)
I have a question for you...
When I go to my question it is still showing me that they are waiting for me tol answer. Did you received the $20 payment?
Yes I did Payables, I will close the post so that it does not show as pending, but do not reply to this message because if you reply it will reopen the question again. Thanks again and looking forward to work with you again soon
All the best
I am not sure how to request you to anwser additional question, so please see below...
Chapter 5 - Questions for Review and Discussion # XXXXX and 2
1. What is the distinction between expenditures and expenses as the terms are used in governmental accounting?
2. A government expects to pay its electric bill relating to its current fiscal year sometime in the following year.
An official of the government requests your advice as to whether the anticipated payment should be charged as an expenditure of the current or the following year. How would you respond?
In your answers to these Chapter 5 questions, be sure to address how encumbrances affect the expenses and expenditures.
Chapter 6 - Questions for Review and Discussion # XXXXX and 6
1. A government opts to set aside $10 million of general fund resources to finance a new city hall. Construction is expected to begin in several years, when the city has been able to accumulate additional resources.
a. The government must account for the $10 million in a capital projects fund, and in its government wide statements it must report the $10 million as ‘‘restricted.''
b. The government may account for the $10 million in a capital projects fund, and in its government wide statements it may report the $10 million as ‘‘restricted.''
c. The government may not account for the $10 million in a capital projects fund, and in its government wide statements it may not report the $10 million as ‘‘unrestricted.''
d. The government may account for the $10 million in a capital projects fund, but in its government wide statements it may not report the $10 million as ‘‘restricted.''
2. A government should distinguish underwriting and other issue costs from bond premiums and discounts and should
a. Report them as expenditures
b. Add them to the face value of the bond
c. Report them in a separate account and amortize them over the life of the bond
d. Deduct them from the bond premiums or add them to the bond discount
3. When a government issues bonds at premiums or discounts and records the proceeds in a capital projects fund, it should
a. Transfer an amount equal to the premiums from the capital projects fund to a debt service fund, and an amount equal to the discounts from a debt service fund to the capital projects fund
b. Transfer an amount equal to the premiums from the capital projects fund to a debt service fund, but make no transfer of an amount equal to the discounts from a debt service fund to the capital projects fund
c. Make no transfers between the capital projects fund and a debt service fund
d. Transfer an amount equal to the discounts from a debt service fund to the capital projects fund, but make no transfer of an amount equal to the premiums from the capital projects fund to the debt service fund
4. A city holds U.S. Treasury notes as an investment in a capital projects fund. During the year the market value of the notes increases by $50,000. Of this amount, $14,000 can be attributed to a decline in prevailing interest rates and $36,000 to interest that has been earned but not yet received. As of year-end, the city should recognize as revenue
5. Which of the following accounts is least likely to be shown on the balance sheet of a debt service fund?
a. Bonds payable
b. Investments (at market value)
d. Special assessments receivable
6. Special assessment debt should be reported on the balance sheet of a city if the debt is to be paid from assessments on property owners and
a. The city has guaranteed payment of the debt and the probability of the city having to make good on the guarantee is 50 percent or greater
b. The city has guaranteed payment of the debt but the probability of the city having to make good on the guarantee is remote
c. The city has no legal responsibility for the debt, but in the past has made up for any property owner defaults.
d. All of the above
7. In its fund statements a government should recognize revenue from special assessments
a. Entirely in the year in which the assessment is imposed
b. In the years in which the assessments are paid
c. In the years in which the assessments are due
d. In the years in which the assessments become available for expenditure
8. In the year it imposes a special assessment, a government should recognize in its government-wide statements
a. The amount of the assessment, plus anticipated interest, as both revenue and an asset
b. The amount of the assessment as both revenue and an asset
c. Only the amount of the assessment due in the current year as revenue but the full amount of the assessment as an asset
d. Only the amount of the assessment due in the current year as both revenue and an asset
9. Under existing federal statutes, arbitrage as it applies to state and local governments
a. Is illegal
b. Is illegal unless the government can demonstrate a ‘‘just cause'' for engaging in it
c. Is legal in some circumstances, but the government may be required to remit arbitrage earnings to the federal government
d. Is illegal unless there is no more than a 2 percent difference between interest earned and interest paid
10. Bond refunding are most likely to result in an economic gain when
a. The bonds are subject to arbitrage
b. There is an inverted yield curve
c. The bonds were initially issued at a premium
d. The bonds are subject to a call provision
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