Governmental Accounting Exam 2 Mc

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2-2-1 What would be included as part of a governmental reporting entity?

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b) A primary government and any legally separate organization for which the primary government is financially accountable.

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2-2-2 What is true about the basic financial statements of state and local government?

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c) Governmental fund financial statements should provide separate columns for each major fund.

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2-2-3 In the reporting of governmental activities, fiscal accountability is demonstrated by:

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b) Fund financial statements.

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2-2-4 The measurement focus and basis of accounting that should be used for the governmental FUND financial statements are:

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a) Current financial resources measurement and modified accrual basis

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2-2-5 What is true regarding the definition of a fund?

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d) All: a fund is a fiscal and accounting entity; A fund has a self-balancing set of accts. recording cash and other financial resources, with all related liabilities and residual equities or balances and changes therein; Resources, related liabilities, and residual equities or balances and changes therein are segregated for the purpose of carrying out specific activities or attaining certain objectives.

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2-2-6 Capital assets used for governmental activities, such as those of the police department, should be reported in:

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b) Government-wide financial statements (programs)

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2-2-7 Assets and liabilities of activities for which the government is acting in either an agency or trustee capacity for individuals, organizations, or other governments should be reported in:

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b) The fiduciary fund financial statements.

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2-2-8 Under the modified accrual basis of accounting revenues are recognized:

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c) when current financial resources become measurable and available to pay current period obligations.

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2-2-9 What is a difference between financial reporting for internal service and enterprise funds

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d) Internal service funds are generally reported in the Governmental Activities column of the government-wide financial statements.

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2-2-10 What must be reported as a major fund?

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a) the General Fund; and b) A fund having total assets, liabilities, revenues or expenditures/ expenses equaling at least 10% of the total governmental OR enterprise fund amount for the same element as applicable, AND at least 5% of the combined govt. and enterprise fund total amount for the same element.

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4-2-1 when equipment is purchased with General Fund resources, which account would have been debited?

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a) Expenditures

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4-2-3 Goods for which a purchase order had been placed at an estimated cost of $1,000 were received at an actual cost of $985. What is the JE in the General Fund for receipt of the goods:

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a) Debit Reserve for Encumbrances for $1,000 (we use Fund Balance: Unassinged; b) Credit A/P for $985; c) Debit Expenditures for $985. Also Cr Encumbrances $1,000.

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4-2-4 the city of Fenton levied $3,000,000 of General Fund property taxes for the FY ending Dec. 31, 2011, w/ an est. uncollectible amount of $200,000. During FY'11 and Jan. and Feb. 2012, $2,500,000 of the levy is expected to be collected; however, $300,000 of the levy is not expected to be collected until after Feb. 2012. The amt. of property tax revenues to be recognized in FY'11 is:

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b) $2,800,000 at the Gov. Activities-GW and $2,500,000 in the General Fund.

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4-2-5 Fines and forfeits would be recorded as what type of revenue

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d) Program Revenues

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4-2-6 Internal exchange transactions in which a governmetnal fund receives goods or services from an enterprise fund are reported as:

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a) Expenditures by the governmental fund and as revenues by the enterprise fund.

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4-2-7 What type of revenue would be classified as an imposed nonexchange revenue?

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c) Property taxes.

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4-2-8 The City Airport fund, an enterprise fund, transfers a portion of boarding fees to the General Fund, which financial statement would this be reported on?

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c) Government-wide Financial Statements

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4-2-9 A special revenue fund that administers a program funded by a reimbursement-type federal grant should recognize revenues when:

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b) Qualifying expenditures have been made.

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4-2-10 A city received $1M cash contribution under a trust agreement in which investment earnings can be used to maintain city cemetery. This contribution should be recorded in a ________ Fund.

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b) Permanent

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3-2-2 Expenses that are specifically identified with a program or function are reported in the government-wide statement of activities as __________ expenses:

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b) Direct

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3-2-3 An extraordinary item differs from a special item in that an extraordinary item is both:

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c) unusual in nature and infrequent in occurence.

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3-2-4 What type of account neither increases nor decreases fund balance of the General Fund during the current period?

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a) Deferred revenues

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3-2-5 One characteristic that distinguishes other financing sources from revenues is that other financing sources arise from:

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a) debt issuances or interfund transfers in.

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3-2-6 Under the modified accrual basis of acctg., expenditures generally are not recognized until:

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b) An obligation is incurred that will be paid from currently available financial resources.

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3-2-8 Under GASB requirements for external financial reporting, one would find the budgetory comparison schedule (or statement) in the:

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c) Either a or b: a) RSI; b) Basic Financial Statements

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3-2-10 Spruce City's finance dept. recorded the recently adopted General Fund Budget at the beginning of the current FY. The budget approved est. revenues of $1M and appropriations of $1.1M, what is the correct JE?

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c) Dr est. revenues $1M
Dr Budgetary Fund Balance $100k
Cr Appropriations for $1.1M