Homework 3

 

1. The most restrictive classification of governmental fund balances listed below is titled:

Committed.    
Assigned.    
Unassigned.    
Reserved.

 

2.  Receipts from a special tax levy to retire and pay interest on general obligation bonds should be recorded in which fund?

Debt service.    
Special revenue.    
Capital projects

 

3.  A city had to make significant repairs to a building damaged the flooding of a nearby river. Damage due to flooding is not unusual. has in the last few years. How the City’s general fund report the Cost of the repairs in its financial statements? 

As an expenditure.    
As another financing use.    
As a special item.    
As an extraordinary item.

 

4.  A county general fund has appropriated funds for a new garbage truck at the Start Of the fiscal year. If a purchase order is subsequently issued for the garbage truck, which of the following represents an accurate statement encumbrance accounting is used by the general fund?

The initial credit to the budgetary control account reduces the availability of the fund balance.    
The general fund would reflect all transaction encumbrance activity in the general ledger accounts Without the use of subsidiary ledgers.    
The budgetary control account is considered a liability of the general fund.    
The initial debit to the encumbrances account which sets up the encumbrance is similar to a GAAP expenditure.

 

4. Property taxes in fiscal year Year 1 to finance the general Kind budget of fiscal year Year 2 should be reported as general  revenues in fiscal year Year 2:

For the collected before the god of fiscal year Year 2 or shortly thereafter.    
Regardless of the fiscal year which collected.    
For the amount collected Year 2 only.    
For the amount collected before the end of fiscal year Year 2 only.

 

5.  When a snowplow purchased by a governmental unit is received. it should be recorded in the general fund as a(an):

Expenditure.    
Capital asset.    
Appropriation.    
Encumbrance.

 

6.  Park City uses accounting and formally integrates its budget into the general accounting records, For the year ending July 31, Year 1 the following budget was adopted: 
Estimated revenues                                       $30,000,000
Appropriations                     27,000,000 
Estimated transfer to debt service fund             900,000

Park salaries and wages of $800,000 for the month of April Year I. What account should Park debit to record this $800,000? 

Expenditures control.    
Operating funds control          
Encumbrances control.    
Salaries and wages expense control.

 

7. It is inappropriate to record depreciation expense in a (an):

Capital projects fund.    
Enterprise fund.    
Internal service fund.    
Private purpose trust fund.

 

8. Assuming no outstanding encumbrances at year end, closing entries for which of the following situations would increase the unassigned fund balance in the general fund at year end?

Appropriations exceed actual expenditures.    
Actual revenues were less than estimated revenues.    
Estimated revenues exceed actual appropriations.    
Actual expenditures exceed appropriations.

 

9. The Baker County Headstart fund. which is property accounted for as a special revenue fund, its available resources. The deficit this fund would likely be displayed as:

Negative fund balance – unassigned.    
Due from the general fund.    
Due from other governments – headsart.    
Negative fund balance – restricted.

 

10. Transfers received by a governmental-type fund should be reported in the Statement of Revenues, Expenditures. And Changes in Fund Balance as a(an):

Other financing source.    Reimbursement.    
Addition to contributed capital.    
Addition to retained earnings.

 

11. On March 2, Year I. Finch City issued general Obligation bonds at face amount. with payable March 1 and September 1. The proceeds were to be used to finance the construction of a civic center over the period April 1, Year 1. to March 31 Year 2. During the fiscal year ended June 30. Year 1. no resources had been provided to the debt service fund for the payment of principal and interest.
 On June 30, Year 1, Finch’s debt service fund should include interest payable on the general obligation bonds for. 

O months.    
3 months.    
4 months.    
6 months.

 

12.  Which of the following statements describes a characteristic of the capital projects fund?

The life of the capital projects fund is short and is limned to a construction period of one to three years.    
Capital project funds cannot be used for leased projects.    
Capital project funds cannot be used for special assessment projects.    
Capital project fund expenditures are usually entirely classified as capital outlays and are subject to depreciation recognition

 

13. During the year. a city’s electric utility, which is operated as an enterprise fund, rendered billings for electricity supplied to the general fund. Which of the following accounts should be debited by the general fund?

Expenditures.    
Due to electric utility enterprise fund.    
Other financing uses-operating transfers out.    
Appropriations.

 

14. During its fiscal year ended June 30. Year 1 Cliff City issued purchase orders totaling $5S, 000, 000, which were property charged to at that time Cliff City’s appropriations do not lapse. Cliff received goods and related at the encumbered amounts totaling $4,500,000 before year end. The remaining goods of $500,000 were not received until after year-end. Cliff $4,200,000 of the invoices received during the year. What amount of Cliffs encumbrances were at June 30, Year 1?

$500,000     
$800,000     
$0     
$300,000

 

15. Riche Township recorded more estimated revenues than appropriations for the coming fiscal year. In integrating its adopted budget with its financial accounting records, the town would:

Credit budgetary control.    
Debit encumbrance control.    
Credit encumbrance control.    
Debit budgetary control.

 

16. On September 30, Year 1, a local township entered into an interest rate swap to hedge the risk associated with fair value changes to its recently issued bonds. The fair value of the interest rate swap was $0 and $8,000 at September 30, Year 1, and December 31, Year 1, respectively. Assuming that the fair value hedge is 100 percent effective and will be fully executed on March 31, Year 2, how would the change in fair value of the hedge be reported by the township at the December 31, Year 1 end?

$18,000 deferred inflow of resources.    
$18,000 investing cash inflow.    
$18,000 income in reported earrings.    
A footnote until transaction settlement.

17. In Soan County’s general fund statement of revenues, expenditures, and changes in fund balances, which of the has an  effect on the excess of revenues over expenditures?

Purchase of fixed assets.    
Payment to a debt-service fund.
Special items.    
Proceeds from the sale of capital assets.

 

18. “The city Of Curtain had the following interfund transactions during the month of May. 
•    Billing by the internal service fund to a department financed by the general fund. for services rendered in the amount of $5,000.
•    Transfer of $200,000 from the general fund to establish a new enterprise fund.
•    Routine transfer Of $50,000 from the general find to the debt service fund. 

Was the total reciprocal activity for Curtain during May? “

$5,000     
$55,000     
$200,000     
$255,000

 

19. In recording fts budgetary accounts its governmental funds at the beginning of the fiscal year, a municipal government would:

Credit appropriations control.    
Debit appropriations control.    
Debit encumbrance control.    
Credit encumbrance control.

 

20. “In Which situation(s) should property taxes due to a governmental be recorded as deferred inflows of resources? 

l. Property taxes receivable are recognized advance of the year for which they are levied 
ll. Property taxes are collected in advance of the year which they are levied “
Both I and II.    
Il only.    
Neither nor Il.    
I only.

 

21. Lake County received the following proceeds that are legally restricted to expenditure for specified purposes: 
Levies on affected property owners to install sidewalks             $500,000 
Gasoline taxes to finance road repairs                        900,000 

What amount should be accounted for in Lake’s special revenue funds? 

$900,000     
$1,400,000     
$500,000     
$0

 

22. A city received a $9,000,000 federal grant to finance the construction of a homeless shelter. In which fund should the proceeds be recorded?

Capital project.    
General.    
Permanent.    
Special revenue.

 

23. The only fund that should show a positive amount in its unassigned fund balance classification would be the:

General fund.    
Special revenue fund.    
Capital projects fund.    
Permanent fund.

 

24. When a lease of a governmental unit represents the acquisition of a general fixed asset through a contract that transfers ownership, the acquisition should be reflected in fund financial statements as:

Both an expenditure and an other financing source.    
Neither an expenditure nor an other financing source.    
An expenditure but not as an other financing source.    
An other financing source but not as an expenditure. 

 

25. A capital projects fund for a new city courthouse recorded a receivable of ZOO, 000 for a state grant and a $450,000 transfer from general fund. What amount reported as revenue by the projects fund?

$300,000     
$0     
$450,000     
$750,000

 

26. A city received a $9,000,000 federal grant to finance construction of a homeless shelter. In which fund should the proceeds be recorded?

Capital project.    
Permanent.    
General.    
Special revenue.

 

27. Land and Other real estate held as investments by endowments in a governments permanent fund should be reported at:
Fair value.    
Fair value less costs of disposal.    
Historical cost.    
The Of cost and net realizable value.

In Year 1, New City issued orders and contracts of $850,000 that were chargeable against Year 1 budgeted appropriations of $1,000,000. The journal entry to record the issuance of the purchase orders and contracts should include a:
Credit to budgetary control of $850,000.    
Debit to expenditures of $1,000,000.    
Debit to appropriations of $850,000.    
Credit to vouchers payable of $1,000,000.

28. Expenditures of a governmental unit for insurance extending over more than one accounting period

May be allocated between or among accounting periods or may be accounted for as expenditures of the period of acquisition.    
Must be accounted for as expenditures of the period of acquisition.    
Must be accounted for as expenditures of the periods subsequent to acquisition.    
Must be allocated between or among accounting periods.

 

29. What account should be debited for $150,000 in the general fund at inception of the lease if the equipment is a governmental capital asset and Rock does not use a capital projects fund?

Expenditures control.    
Memorandum entry only.    
Equipment.    
Other financing uses control.

 

30. The primary difference between the purchase method of accounting for inventory and the consumption method of accounting for inventory is that the purchase method:

Initially records additions to inventory as expenditures.    
Does not require an annual inventory.    
Does not recognize inventory balances.    
Results in classification of a portion of fund balance for inventory as non-spendable.

 

31. The City of Able entered into a lease for equipment to be used during the Annual Able Autumn Festival. The lease is for a period of three months and ownership of the asset does not transfer to the city at the end of the lease, The city would classify this lease as a (an):

Short-term lease    
Lease other than short-term and contract that transfers ownership    
Operating lease    
Finance lease

32. Which of the following accounts of a governmental unit is credited when taxpayers are billed for property taxes?

Revenues.    
Appropriations.    
Taxes receivable current    
Estimated revenues.

33. A public school district should recognize revenue from property taxes levied for its debt service fund when:

Funds from the levy are measurable and available to the district.    
Proceeds from collection of the are deposited in the district’s bank account.    
Assessed valuations of property subject to the levy are known.    
Bonds to be retired by the levy are due and payable.

 

34. When a purchase order released, a commitment is made by a governmental unit to bury a computer to be manufactured to specifications for use tax administration. This commitment should be recorded in the general fund as a (an)

Encumbrance.    
Appropriation.    
Expenditure.    
Fixed asset.

 

35. A State had general obligation bonds outstanding that required payment of interest on July 1 and January 1 of each year. State law allowed for the general fund to make debt payments without the use of a fiscal agent. The fiscal year ended June 30. Which of the following accounts would have decreased when the state paid the interest due on July 1?

Fund balance.    
Interest expenditures.    
Interest payable    
Interest expense.

 

36.  The estimated revenues control account of a governmental unit is debited when:

The budget is recorded.    
The budget is closed at the end of the year.    
Actual revenues are recorded.    
Actual revenues are collected.

 

37.  Cable Township entered into a lease for equipment to be used by fire department The lease is for a period of three years and the property reverts back to the lessor at the end of the lease. The city would classify this lease as a (an):

Agreement Other than a short-term lease and contract that transfers ownership    
Finance lease    
Short-term lease    
Contract that transfers ownership

 

38. Interfund transfers received by a governmental-type fund should be reported in the Statement of Revenues, Expenditures, and changes in Fund balance as a (an):

Other financing source.    

Addition to contributed capital.    
Addition to net assets.    
Reimbursement.

 

39.  Which of the following funds of a local government would report transfers to other funds as another financing use?

General.    
Internal service.    
pension trust    
Enterprise.

 

40.  A county that operates a capital projects fund for infrastructure needs had the information available on transactions 
for the current year: 
Proceeds from debt issuance     $1,000,000
Transfer from general Kind               500,000
Special assessments                           400,000 
Fees for extra services              100,000

How much would the capital projects fund report as other financing sources for the current year? 

$1,000,000     
$600,000     
$900,000     
$1,500,000

 

41. Which of the following fund types used by a government most likely would have a fund balance non-spendable inventory of supplies?

General.    
Internal service.    
Private purpose.    
Capital projects.