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1. Given a specific set of data, the basis of accounting

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1.    Given a specific set of data, the basis of accounting selected by or imposed on a governmental entity will least affect which of the following?
a)     Determining whether or not the governmental entity has a balanced budget.
b)     Determining whether or not the governmental entity has the ability to issue debt.
c)     Determining whether or not certain events occurred.
d)     Determining the annual payments to a government-sponsored pension plan.

2.    As used by GASB, inter-period equity refers to which of the following? Financial reporting should:
a)     Demonstrate compliance with finance-related contractual requirements.
b)     Provide information to determine whether current-year revenues were sufficient to pay for current-year services.
c)     Demonstrate whether resources were obtained and used in accordance with the entity’s legally adopted budget.
d)     Provide information to assist users in assessing the government’s economy, efficiency, and effectiveness.

3. Which of the following is NOT an objective of financial reporting for not-for-profit entities as established by FASB? Financial reporting should provide information that is useful to present and potential resource providers and other users in:
a)     Making rational decisions about the allocation of resources to those organizations.
b)     Assessing the services provided and the entity’s ability to continue to provide those services.
c)     Assessing the types of services provided and the need for those services.
d)     Assessing how managers have discharged their stewardship responsibilities.

4. Which of the following is NOT an objective of financial reporting by governmental entities as established by GASB?
a)     Financial reporting should assist users in determining if current period revenues were sufficient to pay for current-period services.
b)     Financial reporting should assist users in assessing the management skills of top management.
c)     Financial reporting should assist users in evaluating the operating results of the governmental entity for the year.
d)     Financial reporting should assist users in assessing the level of services that can be provided by the governmental entity and its ability to meet its obligations as they come due.
5.   The City of San Jose built a new city hall and financed construction by issuing bonds due in installments over the next 30 years. The bond principal and interest will be paid by a special tax levied on property in the City. The money received from this special tax should be accounted for in which of the following funds?
a)     General fund.
b)     Special revenue fund.
c)     Capital project fund.
d)     Debt service fund.

6.   Riverside Golf Course is a City-owned golf course that collects greens fees in amounts sufficient to cover its expenses. Riverside Golf Course should be accounted for in which of the following funds?
a)     Internal service fund.
b)     Enterprise fund.
c)     General fund.
d)     Special revenue fund.

7.   Which of the following funds is accounted for on the modified accrual basis of accounting?
a)     General fund.
b)     Internal service fund.
c)     Proprietary fund.
d)     Pension trust fund.

8.   Which of the following liabilities would NOT be found in the fund balance sheet of the General Fund of the City of Marmaduke?
a)     Accounts payable.
b)     Payable to the special revenue fund.
c)     Deferred revenue.
d)     Bonds payable, due in 5 years.

9.    Which of the following is NOT considered Required Supplementary Information (RSI)?
        a)   Notes to the financial statements.
        b)   Management’s Discussion and Analysis.
        c)   Budgetary comparisons.
        d)   Pension schedules.

10. In addition to government-wide statements, GASB Statement No. 34 requires fund financial statements be included in the government’s basic set of financial statements. The basic fund financial statements that should be included for governmental funds are
        a)   The Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balance.
        b)   The Statement of Nets Assets, the Statement of Revenues, Expenses, and Changes in Fund Net Assets, and the Statement of Cash Flows.
        c)   The Statement of Fiduciary Net Assets, and the Statement of Changes in Fiduciary Net Assets.
        d)   The Balance Sheet, the Income Statement, the Statement of Cash Flows, and the Statement of Retained Earnings.
11. In addition to government-wide statements, GASB Statement No. 34 requires fund financial statements be included in the government’s basic set of financial statements. The basic fund financial statements that should be included for proprietary funds are
        a)     The Balance Sheet and        the Statement of Revenues, Expenditures, and Changes in Fund Balance.
        b) The Statement of Nets Assets, the Statement of Revenues, Expenses, and Changes in Fund Net Assets, and the Statement of Cash Flows.
        c) The Statement of Fiduciary Net Assets, and the Statement of Changes in Fiduciary Net Assets.
        d) The Balance Sheet, the Income Statement, the Statement of Cash Flows, and the Statement of Retained Earnings.

12.   Under the new GASB reporting model for governmental entities, which of the following is required?
       a)   Only one set of financial statements, prepared on the full accrual basis of accounting or prepared on the modified accrual basis of accounting.
       b)   Two sets of financial statements, one prepared on the full accrual basis of accounting and one prepared on the modified accrual basis of accounting.
       c)   Two sets of financial statements, one similar to the pre-GASB #34 reporting requirements using the current financial resources measurement focus and modified accrual basis of accounting and one that combines all governmental activities in one column and all business-type activities in another column using the full accrual basis of accounting for both columns.
       d)   Two sets of financial statements, one exactly like the pre-GASB #34 reporting requirements using the current financial resources measurement focus and modified accrual basis of accounting and one that combines all governmental activities in one column and all business-type activities in another column using the full accrual basis of accounting for both columns.

13. Assume that the City of Juneau maintains its books and records to facilitate the preparation of its fund financial statements. The City pays its employees bi-weekly on Friday.   The fiscal year ended on Wednesday, June 30. Employees had been paid on Friday, June 25. The employees paid from the General Fund had earned $120,000 on Monday, Tuesday, and Wednesday (June 28, 29, and 30).   They will earn $80,000 on Thursday and Friday (July 1 and 2). What entry, if any, should be made on June 30?
        a)   Debit Expenses $120,000; Credit Wages and Salaries Payable $120,000.
        b)   Debit Expenditure $200,000; Credit Wages and Salaries Payable $200,000.
        c)   Debit Expenditures $120,000; Credit Wages and Salaries Payable $120,000.
        d)   No entry is required.










14. Employees of the General Fund of Scott City earn ten days paid leave for each 12 months of employment. The City permits employees to carry the vacation days forward as long as they wish. During the current year employees earned $800,000 of vacation benefits of which the City estimates that $500,000 will be taken in the next year and the balance will be carried forward. Assuming that the City maintains its books and records in a manner that facilitates the preparation of their fund financial statements, which of the following entries is the correct entry in the General Fund to record the vacation pay earned during the current period?
        a)    Debit Expenditures $800,000; Credit Vacation Pay Payable $800,000.
        b)    Debit Expenditures $500,000; Credit Vacation Pay Payable $500,000.
        c)    Debit Vacation Expense $800,000; Credit Vacation Pay Payable $800,000.
d)    No entry required.

15.   Harris County transferred $200,000 from the General Fund to the Motor Pool Internal Service Fund to pay for the use of automobiles during the first six months of FY 2001. The appropriate entry in the General Fund to record this transfer of cash would be
        a)    Debit Expenditures $200,000; Credit Cash $200,000.
        b)    Debit Other Financing Uses—Transfer Out $200,000; Credit Cash $200,000.
        c)    Debit Fund Balance—Transfer Out $200,000; Credit Cash $200,000.
        d)    Debit Other Financing Sources—Transfer In $200,000; Credit Cash $200,000.

16.   Several years ago, Durham City issued $1 million in zero coupon bonds due and payable in 2010. The bonds were sold at an amount to yield investors 6% over the life of the bonds. During the current year, how much interest expenditures would Durham City recognize related to these bonds?
        a)    Difference between the present value of the bonds at the beginning of the period and the present value of the bonds at the end of the period.
        b)    Face amounts of bonds times 6%.
        c)    Book value of bonds times 6%.
d)    None.

17.   Six years ago Hill City issued $10 million of 6% term bonds, due 30 years from the date of issue. interest on the bonds is payable semi-annually on January 1 and July 1. Hill City has a September 30 fiscal year end. The amount of interest payable that would be included on the balance sheet for the debt service fund of Hill City at September 30 would be
       a)   $ -0-
       b)   $150,000
       c)   $300,000
       d)   $600,000






18. Sue City has outstanding $5 million in general term bonds used to finance the construction of the new City Library. Sue City has a June 30 fiscal year-end. Interest at 6% is payable each January 1 and July 1. The principal of the bonds is due 10 years in the future. The City budgeted the July 1, 1999 interest payment in the budget for the fiscal year ended June 30, 1999. On June 30, cash was transferred from the General Fund to the Debt Service Fund to make the required payment. The maximum amount of interest payable that may be included on the balance sheet of the debt service fund of Sue City at June 30 would be
       a)   $ -0-
       b)   $150,000.
       c)   $300,000.
       d)   $3,000,00.

Use the following information to answer questions #19 and #20
Calhoun County makes annual transfers from the general fund to the debt service fund to pay principal and interest on long-term debt.

19. When the County makes the transfer the entry in the debt service fund should be
       a)   Debit Cash; Credit Revenue.
       b)   Debit Cash; Credit Other Financing Sources.
       c)   Debit Cash; Credit Interest Payable.
       d)   Debit Cash with Fiscal Agent; Credit Other Financing Sources.

20. In the debt service fund, what is the appropriate entry when the principal payment is made?
       a)   Debit Bonds Payable; Credit Cash.
       b)   Debit Expenditures; Credit Cash.
       c)   Debit Other Financing Uses—Nonreciprocal Transfer; Credit Cash.
       d)   No entry is required.
Submitted: 4 years ago.
Category: Homework

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