G&p Chapter 5 - Mc 1-20

Front 1

1. Which of the following funds would use the modified accr

ual basis of accounting in

preparing its fund financial statements?

a)

City Electric Utility Enterprise Fund.

b)

City Hall Capital Projects Fund.

c)

City Motor Pool Internal Service Fund.

d)

City Employee Pension Trust Fund.

Back 1

B

Front 2

Which of the following funds would use the accrual basis

of accounting in preparing its fund

financial statements?

a) City General Fund.

b) City Hall Capital Projects Fund.

c)

City Motor Pool Internal Service Fund.

d)

None of the above.

Back 2

C

Front 3

As used in government accounting, expenditures are decreas

es in

a)

Net assets.

b)

Net current financial resources.

c)

Net cash.

d)

Net economic resources.

Back 3

B

Front 4

Assume that the City of Juneau maintains its books and

records to facilitate the preparation

of its fund financial statements. The city pays its em

ployees bi-weekly on Friday. The

fiscal year ended on Wednesday, June 30. Employees had been pai

d on Friday, June 25.

The employees paid from the general fund had earned $90,000 on Monda

y, Tuesday, and

Wednesday (June 28, 29, and 30). What entry, if any, should be

made in the city’s general

fund on June 30?

a)

Debit Expenditures $90,000; credit Wages and salaries payable $90,000.

b)

Debit Expenses $90,000; credit Wages and salaries payable $90,000.

c)

Debit Expenditures $90,000; credit Encumbrances $90,000.

d)

No entry is required.

Back 4

A

Front 5

Assume that the City of Juneau maintains its books and

records to facilitate the preparation

of its government-wide financial statements. The city pay

s 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 e

arned $90,000 on Monday,

Tuesday, and Wednesday (June 28, 29, and 30). They will earn $60,

000 on Thursday and

Friday (July 1 and 2). What entry, if any, should be ma

de on June 30?

a) Debit Expenditures $90,000; credit Wages and salaries payable $90,000.

b) Debit Expenditures $150,000; credit Wages and salaries payable $150,000.

c) Debit Expenses $90,000; credit Wages and salaries payable $90,000.

d) No entry is required.

Back 5

C

Front 6

Employees of the City of Orleans earn ten days pai
d leave for each 12 months of
employment. The city has a policy that employees must take
their vacation days during the
year following the year in which they are earned. If they
do not take vacation in the allotted
period, they forfeit the vacation pay benefit. Traditionall
y, employees have taken 80 percent
of the vacation days earned. During the current year, city
employees earned $600,000 in vacation pay. Assuming the city maintains its books and records in a manner to facilitate the preparation of fund financial statements, which of the following entries should be made in the general fund to record the vacation pay earned during the current period?
a) Debit Expenditures $600,000; credit Vacation pay payable $600,000.
b) Debit Expenses $600,000; credit Vacation pay payable $600,000.
c) Debit Expenditures $480,000; credit Vacation pay payable $480,000.
d) No entry required.

Back 6

D

Front 7

Employees of the City of Orleans earn ten days pai

d leave for each 12 months of

employment. The city has a policy that employees must take

their vacation days during the

year following the year in which they are earned. If they

do not take vacation in the allotted

period, they forfeit the vacation pay benefit. Traditionall

y, employees have taken 80 percent

of the vacation days earned. During the current year, city

employees earned $600,000 in

vacation pay. Assuming the city maintains its books and r

ecords in a manner to facilitate the

preparation of government-wide financial statements, which of

the following entries should

be made to record the vacation pay earned during the current

period?

a) Debit Expenditures $600,000; credit Vacation payable $600,000.

b) Debit Expenses $600,000; credit Vacation payable $600,000.

c) Debit Expenses $480,000; credit Vacation pay payable $480,000.

d) No entry required.

Back 7

C

Front 8

Employees of the general fund of Scott City earn ten d

ays of vacation for each 12 months of

employment. The city permits employees to carry the vac

ation days forward as long as they

wish. During the current year employees earned $800,000 of vacat

ion benefits, of which the

city estimates $500,000 will be taken in the next year and the bal

ance will be carried

forward. Assuming that the city maintains its books and

records in a manner that facilitates

the preparation of fund financial statements, which of the

following entries should be made

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.

Back 8

D

Front 9

employees of the general fund of Scott City earn ten da
ys of vacation for each 12 months of
employment. The city permits employees to carry the vac
ation days forward as long as they
wish. During the current year employees earned $800,000 of vacat
ion benefits, of which the
city estimates $500,000 will be taken in the next year and the bal
ance will be carried forward.
Assuming that the city maintains its books and records i
n a manner that facilitates the
preparation of government-wide financial statements, which of
the following entries should
be made 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.

Back 9

C

Front 10

Lincoln City has a 6/30 fiscal year-end. The city has a

policy of recognizing fund revenues/

expenditures when collected/paid or if expected to be colle

cted/paid within 60 days of year-end.

The city has a sick leave benefit policy for its employee

s. The policy allows city employees one

day of paid sick leave per month and permits them to acc

umulate sick leave that they do not take.

Sick leave vests at the completion of the fifth year of em

ployment, and unused sick leave is paid

in cash upon termination or retirement. During the fiscal

year ended 6/30/15, city employees who

are paid from the general fund earned $2.8 million of sick leave,

of which $1.0 was taken. Of the

balance, the city estimates that $0.2 million will be ta

ken in the next 60 days, $0.6 million will be

taken in the next five years, $0.4 million will vest, and $0.6

million will never be taken.

The amount of sick leave expenditures that should appea

r on the general fund financial

statements for the fiscal year ended 6/30/15 is

a)

$1.4 million.

b)

$1.3 million.

c)

$0.6 million.

d)

$1.0million.

Back 10

D

Front 11

Lincoln City has a 6/30 fiscal year-end. The city has a

policy of recognizing fund revenues/

expenditures when collected/paid or if expected to be colle

cted/paid within 60 days of year-end.

The city has a sick leave benefit policy for its employee

s. The policy allows city employees one

day of paid sick leave per month and permits them to acc

umulate sick leave that they do not take.

Sick leave vests at the completion of the fifth year of em

ployment, and unused sick leave is paid

in cash upon termination or retirement. During the fiscal

year ended 6/30/15, city employees who

are paid from the general fund earned $2.8 million of sick leave,

of which $1.0 was taken. Of the

balance, the city estimates that $0.2 million will be ta

ken in the next 60 days, $0.6 million will be

taken in the next five years, $0.4 million will vest, and $0.6

million will never be taken.

The amount of sick leave liability that should appe

ar on the general fund balance sheet at

6/30/15 is

a)

$1.2 million.

b)

$0.4 million.

c)

$0.2 million.

d)

No liability should appear.

Back 11

D

Front 12

Lincoln City has a 6/30 fiscal year-end. The city has a

policy of recognizing fund revenues/

expenditures when collected/paid or if expected to be colle

cted/paid within 60 days of year-end.

The city has a sick leave benefit policy for its employee

s. The policy allows city employees one

day of paid sick leave per month and permits them to acc

umulate sick leave that they do not take.

Sick leave vests at the completion of the fifth year of em

ployment, and unused sick leave is paid

in cash upon termination or retirement. During the fiscal

year ended 6/30/15, city employees who

are paid from the general fund earned $2.8 million of sick leave,

of which $1.0 was taken. Of the

balance, the city estimates that $0.2 million will be ta

ken in the next 60 days, $0.6 million will be

taken in the next five years, $0.4 million will vest, and $0.6

million will never be taken.

The amount of sick leave expense that should appea

r on the government-wide financial

statements for the fiscal year ended 6/30/15 is

a)

$2.8 million.

b)

$2.6 million.

c)

$1.2 million.

d)

$1.4 million.

Back 12

D

Front 13

Lincoln City has a 6/30 fiscal year-end. The city has a

policy of recognizing fund revenues/

expenditures when collected/paid or if expected to be colle

cted/paid within 60 days of year-end.

The city has a sick leave benefit policy for its employee

s. The policy allows city employees one

day of paid sick leave per month and permits them to acc

umulate sick leave that they do not take.

Sick leave vests at the completion of the fifth year of em

ployment, and unused sick leave is paid

in cash upon termination or retirement. During the fiscal

year ended 6/30/15, city employees who

are paid from the general fund earned $2.8 million of sick leave,

of which $1.0 was taken. Of the

balance, the city estimates that $0.2 million will be ta

ken in the next 60 days, $0.6 million will be

taken in the next five years, $0.4 million will vest, and $0.6

million will never be taken.

The amount of sick leave liability that should appe

ar on the government-wide financial

statements at 6/30/15 is

a)

$1.2 million.

b)

$0.4 million.

c)

$0.2 million.

d)

No liability should appear.

Back 13

B

Front 14

State Community College, a public college, grants facul

ty members a one-year sabbatical

leave after each seven years of service. There are no r

equirements for research, study, or

service during the compensated sabbatical leave. A particula

r faculty member earns $40,000

per year. Assuming that the college maintains its books and

records in a manner that

facilitates the preparation of fund financial statements

and assuming that any appropriate

accruals have been made, what is the appropriate entry t

o record the employee’s salary paid

while on sabbatical?

a)

Debit Expenditures $40,000; Credit Cash $40,000.

b)

Debit Sabbatical leave payable $40,000; Credit Cash $40,000.

c) Debit Expenditures $40,000; Credit Sabbatical leave payable $40,000.

d) No entry required.

Back 14

A

Front 15

State Community College, a public college, grants facul

ty members a one-year sabbatical

leave after each seven years of service. There are no r

equirements for research, study, or

service during the compensated sabbatical leave. A particula

r faculty member earns $40,000

per year. Assuming that the college maintains its books and

records in a manner that

facilitates the preparation of government-wide financial sta

tements and assuming that any

appropriate accruals have been made, what is the appropria

te entry to record the employee’s

salary paid while on sabbatical?

a)

Debit Expenditures $40,000; Credit Cash $40,000.

b)

Debit Sabbatical leave payable $40,000; Credit Cash $40,000.

c)

Debit Expenditures $40,000; Credit Cash $40,000.

d)

No entry required.

Back 15

B

Front 16

State University, a public university, has a policy of

granting faculty members a one-year

paid sabbatical leave after a period of seven years continuo

us employment. The leave is for

further study, research, or public service. A particular f

aculty member earns $90,000 per

year. Assuming that the college maintains its books and rec

ords in a manner that facilitates

the preparation of fund financial statements and assuming t

hat any appropriate accruals have

been made, what is the appropriate entry to record the empl

oyee’s salary paid while on

sabbatical leave?

a) Debit Expenditures $90,000; Credit Cash $90,000.

b) Debit Expenses $90,000; Credit Cash $90,000.

c) Debit Sabbatical leave payable $90,000; Credit Cash $90,000.

d) No entry required.

Back 16

A

Front 17

State University, a public university, has a policy of

granting faculty members a one-year

paid sabbatical leave after a period of seven years continuo

us employment. The leave is for

further study, research, or public service. A particular f

aculty member earns $90,000 per

year. Assuming that the college maintains its books and rec

ords in a manner that facilitates

the preparation of government-wide financial statements and a

ssuming that any appropriate

accruals have been made, what is the appropriate entry t

o record the employee’s salary paid

while on sabbatical leave?

a) Debit Expenditures $90,000; Credit Cash $90,000.

b) Debit Expenses $90,000; Credit Cash $90,000.

c) Debit Sabbatical leave payable $90,000; Credit Cash $90,000.

d) No entry required.

Back 17

B

Front 18

State University, a very large public university, ha

s a policy of granting faculty members a

one-year sabbatical leave after a period of seven years of c

ontinuous employment. The

leave is to be used for further study, research, or servic

e. During the fiscal year ended

6/30/15, the university paid $3 million to faculty members on sa

bbatical leave and estimated

that faculty members currently not on sabbatical leave ear

ned $3.5 million toward sabbatical

leaves they are likely to take in the future. The amount

of sabbatical expenditures for the

year ended 6/30/15 should be

a)

$0 million.

b) $3 million.

c) $3.5 million.

d) $6.5 million.

Back 18

B

Front 19

Culver City recognizes as revenues/expenditures those amou

nts collected/paid during the

year or within 60 days of fiscal year-end. The city offe

rs a pension benefit to its employees

who meet certain age and years of employment criteria. T

he city participates in the State

Pension Plan. Per its contractual arrangement, the city

’s required contribution to the State

Pension Plan for the fiscal year ended 6/30/15 is $5 million.

Due to cash inflow shortages

the city, which budgeted $5 million for pension contributions, pai

d only $4 million in the

fiscal year ended 6/30/15. The city paid the remaining amount on

September 30, 2015.

Assuming the city maintains its books and records in a m

anner that facilitates the

preparation of its fund financial statements, how should t

he city record the pension

contribution and any associated liability for the year ended

6/30/15?

a)

Debit Expenditures $5 million; Credit Cash $4 million and Pensi

on payable $1 million.

b) Debit Expenses $5 million; Credit Cash $4 million and Pe

nsion payable $1 million.

c) Debit Expenditures $4 million; Credit Cash $4 million.

d) Debit Expenses $4 million; Credit Cash $4 million

Back 19

C

Front 20

Culver City recognizes as revenues/expenditures those amou

nts collected/paid during the

year or within 60 days of fiscal year-end. The city offe

rs a pension benefit to its employees

who meet certain age and years of employment criteria. T

he city participates in the State

Pension Plan. Per its contractual arrangement, the city

’s required contribution to the State

Pension Plan for the fiscal year ended 6/30/15 is $5 million.

Due to cash inflow shortages

the city, which budgeted $5 million for pension contributions, pai

d only $4 million in the

fiscal year ended 6/30/15. The city paid the remaining amount on

September 30, 2015.

Assuming the city maintains its books and records in a m

anner that facilitates the

preparation of government-wide financial statements, how shou

ld the city record the pension

contribution and any associated liability for the year ended

6/10/15?

a) Debit Expenditures $5 million; Credit Cash $4 million and Pe

nsion contribution payable

$1 million.

b) Debit Expenses $5 million; Credit Cash $4 million and Pe

nsion contribution payable $1

million.

c) Debit Expenditures $4 million; Credit Cash $4 million.

d) Debit Expenses $4 million; Credit Cash $4 million.

Back 20

B