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25 Cards in this Set
- Front
- Back
The objectives of financial reporting for capital asset s should be to provide information a) About a governmental entity’s physical resources. b) That can be used to assess the service potential of a g overnmental entity’s physical resources. c) To help users assess a government’s long- and short-term capi tal needs. d) All of the above. |
D |
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A government may record long-term assets in which of the f ollowing funds? a) General fund b) Internal service funds. c) Capital projects funds d) Debt service funds. |
B |
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General capital assets are not reported in governmental funds because a) The measurement focus of governmental funds is on current fina ncial resources. b) They are not used to used generate revenues. c) The basis of accounting is accrual. d) None of the above. |
A |
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Joshua County bought a new backhoe using general fund cash. When the asset was acquired, what was the appropriate entry in the general fund, assuming that the entity maintains its books and records in a manner to facilitate the preparation of fund financial statements? a) Debit Equipment; Credit Cash. b) Debit Equipment; Credit Investment in capital assets. c) Debit Expenditures; Credit Cash. d) Debit Expenditures; Credit Investment in capital assets. |
C |
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Surfer City sold a used police car. The police car had a historical cost of $25,000, a fair value of $18,000, and was sold for $10,000. Assuming that the city mai ntains its books and records in a manner to facilitate the preparation of the fund finan cial statements, what is the appropriate entry in the general fund to record this sale? a) Debit Cash $10,000; Credit Revenue $10,000. b) Debit Cash $10,000 and Loss on sale $8,000; Credit Automotive equi pment $18,000. c) Debit Cash $10,000; Credit Other financing sources—sale of ass et $10,000. d) Debit Cash $10,000; Credit Automotive equipment $10,000. |
C |
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Hilltop School District receives a donation of ten computers from Computer Hut, a local computer firm. The cost to Computer Hut of each computer is $2,500. The retail value of each computer is $3,000. Assuming that the district maintain s its books and records in a manner that facilitates the preparation of the fund financia l statements, what is the appropriate entry in the general fund to record this donation? a) Debit Computer equipment $25,000; Credit Donation revenue $25,000. b) Debit Computer equipment $30,000; Credit Other financing sources— donation $30,000. c) Debit Computer equipment $30,000; Credit Donation revenue $30,000. d) No entry. The computers are not financial resources. |
D |
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Which of the following costs will NOT be included in the cos t of capital assets on the government-wide financial statements? a) Purchase price (invoice amount). b) Cost of demolishing existing structures that cannot be used. c) Interest on self-constructed items. d) Engineering costs. |
C |
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Donated assets are reported in the government-wide financial statements at a) Historical cost to the donor. b) Book value in the hands of the donor. c) Fair value on date of donation. d) Zero value because they were not purchased. |
C |
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Mariano County traded in a used pickup for a new pickup truck with a sticker price of $44,000. The old pickup had a fair value of $26,000, historical cos t of $45,000, and accumulated depreciation of $18,000. The dealer took the old tr uck and $15,000 for the new truck. The new truck should be reported on the government-wide financial statements at a) $15,000. b) $42,000. c) $44,000. d) $41,000. |
D |
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Mariano County traded in a used pickup for a new pickup truck with a sticker price of $44,000. The old pickup had a fair value of $26,000, historical cos t of $45,000, and accumulated depreciation of $18,000. The dealer took the old tr uck and $15,000 for the new truck. The new truck should be reported on the government-wide financial statements at The amount of gain or loss that should be recognized on t his transaction in the general fund financial statements is: a) $0. b) $1,000 loss. c) $4,000 gain. d) $15,000 loss. |
A |
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Mariano County traded in a used pickup for a new pickup truck with a sticker price of $44,000. The old pickup had a fair value of $26,000, historical cos t of $45,000, and accumulated depreciation of $18,000. The dealer took the old tr uck and $15,000 for the new truck. The new truck should be reported on the government-wide financial statements at The amount of gain or loss that should be recognized on t his transaction in the government- wide financial statements is a) $0. b) $1,000 loss. c) $3,000 gain. d) $12,000 loss. |
B |
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Rory City traded in a used pickup for a new pickup with a sticker price of $44,000. The old truck had a historical cost of $40,000, accumulated depreciation of $16,000, and a fair value of $27,000. The dealer took the old truck and $10,000 cash for the new truck. At what value should the new truck be reported in the government-wide financial statements? a) $44,000. b) $43,000. c) $40,000. d) $37,000. |
D |
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Rory City traded in a used pickup for a new pickup with a sticker price of $44,000. The old truck had a historical cost of $40,000, accumulated depreciation of $16,000, and a fair value of $27,000. The dealer took the old truck and $10,000 cash for the new truck. What amount of gain/loss should be reported in the general fund financial statements? a) $0. b) $3,000 gain. c) $3,000 loss. d) $7,000 gain. |
A |
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Rory City traded in a used pickup for a new pickup with a sticker price of $44,000. The old truck had a historical cost of $40,000, accumulated depreciation of $16,000, and a fair value of $27,000. The dealer took the old truck and $10,000 cash for the new truck. What amount of gain/loss should be reported in the government-wide financial statements? a) $0. b) $3,000 gain. c) $3,000 loss. d) $7,000 gain. |
A |
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The city of Maine Creek acquired a used front-end loader from a road contractor for use at the city landfill (which is accounted for in an enter prise fund). The loader had a fair value of $54,000 and a historical cost of $90,000. The city paid the cont ractor $50,000 for the loader. At what amount should be front-end loader be reported in the government-wide financial statements? a) $50,000. b) $54,000. c) $90,000. d) It should not be reported in the government-wide financial s tatements. |
A |
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To elect not to capitalize works of art and simila r assets, a government must see that the assets meet all of the following criteria EXCEPT a) The assets must be held for public exhibition, education, or research in furtherance of public service, rather than for financial gain. b) The assets must be protected, kept unencumbered, cared for, and preserved. c) The assets must be subject to an organizational policy tha t requires the proceeds from sales of the collection items be used to acquire very sim ilar items for the collection. d) The assets must be subject to an organizational policy tha t requires the proceeds from sales of the collection items be used to acquire other it ems for the collection. |
C |
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If a government elects to capitalize certain works of art and similar assets, which of the following statements is true relative to depreciation on thos e assets? a) Donated assets cannot be depreciated. b) All of the capitalized assets must be depreciated. c) All exhaustible works of art and similar assets must b e depreciated. d) The government may elect to omit all depreciation. |
C |
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Which of the following are NOT infrastructure assets? a) Roads. b) Sidewalks. c) Buildings. d) Bridges. |
C |
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If a government receives donations of works of art, the governme nt must recognize revenue in its government-wide financial statements a) Only if it elects to capitalize its collection. b) Only if it elects NOT to capitalize its collection. c) On all donations of works of art. d) It is not permitted to recognize revenue from donations. |
C |
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For a government that elects NOT to capitalize its works of art and similar assets, the appropriate entry for reporting in the government-wide finan cial statements when receiving a contribution of a work of art is a) No entry is required for contributed assets. b) Debit Asset; Credit Revenues. c) Debit Asset; Credit Equity. d) Debit Expense, Credit Revenue. |
D |
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For a government that elects to capitalize its works of a rt and similar assets, the appropriate entry for reporting in the government-wide financial statem ents when receiving a contribution of a work of art is a) No entry is required for contributed assets. b) Debit Asset; Credit Revenues. c) Debit Asset; Credit Equity. d) Debit Expenditures; Credit Revenues. |
B |
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Which of the following is true with regard to deferred mai ntenance? a) Deferred maintenance costs are delayed repair, or upkeep, measured by the outlay required to restore a plant or individual asset to full o perating characteristics. b) Deferred maintenance costs should be measured as the amount necessary to bring the assets up to their expected operating condition. c) Deferred maintenance costs may be interpreted as a po tential call upon government resources—an obligation that is being passed on to taxpayers of the future. d) Deferred maintenance costs are not useful information to readers of financial statements because they are not objective and verifiable and thus violat e one of the basic qualitative characteristics of accounting information. |
A |
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GASB standards require that depreciation be reported on all capital assets except a) Infrastructure accounted for using the standard approach. b) Infrastructure assets accounted for using the modified appro ach. c) Donated assets. d) Capitalized works of art. |
B |
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With regard to accounting for infrastructure, which of t he following is true? a) Unlike other capitalized assets, infrastructure assets s hould never be depreciated. b) The costs of general government infrastructure assets should be recognized as expenditures in governmental fund statements as the costs are incurred. c) Governments that choose to apply the modified approach to accoun ting for infrastructure need not capitalize infrastructure assets. d) Under the modified approach, governments should capitalize both t he initial costs of infrastructure assets and subsequent outlays intended to pr eserve and extend the assets’ useful lives. |
B |
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If a government elects the modified approach with regard to capitalization of infrastructure a) Costs to preserve infrastructure assets are expensed as incurred with no additional disclosure required. b) Costs to preserve infrastructure assets are expensed as incurred and disclosure of assessed condition is required. c) Costs to preserve infrastructure assets are capitalized as incurred and depreciated over the estimated useful with no additional disclosure required. d) Costs to preserve infrastructure assets are capitalized as incurred and are not depreciated, but disclosure of assessed condition is required. |
B |