Question

c.     Chapter 4 – Exercise 4-7, answer # 1 and 2      
4-7
The recognition of revenue from fines does not necessarily reflect the amount ‘‘earned'' by merely issuing tickets.

In August 2008, the last month of its fiscal year, GoldwaitheTownship issued $88,000 worth of tickets for parking and traffic violations. Of these, the township collected $45,000. It expects to collect an additional $20,000 within sixty days of the close of the fiscal year and to collect $3,000 subsequent to that. It will have to write off the balance. The tickets are due; the protest period expires on
September 15.

1. How much revenue should the township recognize from the tickets issued in August 2008? Explain.

2. How might your answer change with respect to the township's government-wide statements?


d.     Chapter 5 – Questions for Review and Discussion # 1 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.

Edited by XXXXXXXXX on August 11 2008 at 6:33 PM



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Subject: Government Accountin