Characteristics of a responsibility accounting system include all of the following except that

1.  Which of the following is identified by the FASB as the foundation for federal financial reporting?

2. Which of the following is not an objective of financial reporting by state and local governments?

C. To assist users in assessing the adequacy of systems and controls.

3. On what should the government-wide financial statements report?

D. Net position and results of financial operations of the government as a whole.

4. Recognizing revenues when measurable and available and paying current obligations and expenditures when incurred describes which basis of accounting?

5. Which of the following standard-setting bodies requires MD&A as part of the financial report?

6. General purpose governments generally provide a wider range of services to their residents than do special purpose governments.

7. The Governmental Accounting Standards Board is assigned responsibility for setting accounting and financial reporting standards for:

B. State and local government entities and governmentally-related units and agencies, such as utilities, authorities, hospitals, and colleges.

8. The Financial Accounting Standards Board has the responsibility for setting accounting and financial reporting standards for:

A. All nonprofit organizations that are nongovernmental and business entities.

Which of the following governments would be considered a general purpose government

The organization that establishes accounting and financial reporting standards for the federal government is the

Federal Accounting Standards Advisory Board (FASAB).

The Governmental Accounting Standards Board (GASB) has the authority to set accounting and financial reporting standards for all of the following except:

The federal government and its agencies and departments.

Which of the following concepts is the cornerstone of governmental financial reporting?

Federal accounting and reporting standards issued by the FASAB:

Are considered authoritative guidance for the federal government and its agencies and departments under Rule 203 of the AICPA Code of Professional Conduct, as well as under the GAAP hierarchy promulgated by the FASAB.

The concept of interperiod equity relates to whether:

Current period revenues are sufficient to pay for current period services.

Which authoritative standards-setting body focuses its standards on both internal and external financial reporting?

only FASAB, not GASB or FASB.

As compared with business organizations, which of the following are distinguishing characteristics of governments and not-for-profit organizations

Financial reporting by state and local governments should be useful in making economic, social, and political decisions, and in assessing accountability by:

Assisting in determining compliance with finance-related laws, rules, and regulations.

Which of the following is included in the minimum requirements for general purpose external financial reporting specified by GASB standards?

--Management discussion and analysis (MD&A) --Government-wide financial statements. --Fund financial statements . D)All of the above

Fiscal accountability can best be assessed by which required basic financial statements?

Which of the following required supplementary information (RSI) is designed to communicate in narrative, easily readable form the purpose of a state or local government's basic financial statements and current financial position?

Management's Discussion and Analysis (MD&A).

Government-wide financial statements are intended to assist financial statement users in assessing:

Fiscal Accountability: NO Operational Accountability: YES

Which of the following is not one of the three categories of funds identified in Chapter 1?

The basis of accounting that reports revenues when measurable and available for spending, rather than when earned, is called the:

Which of the following best describes the relationship between a government's comprehensive annual financial report (CAFR) and the minimum general purpose external financial reporting requirements under GASB standards?

B)The minimum requirements for general purpose external financial reporting are included as a part of a CAFR. C)A CAFR is recommended but not required; the MD&A, basic financial statements (government-wide and fund, including notes), and required supplementary information other than MD&A are the minimum requirements for general purpose external financial reporting . D)Both B and C are correct.

Which of the following would appropriately be reported in the financial section of a CAFR?

Federal agencies and departments provide which of the following information in their performance and accountability report?

Financial Information: YES Performance Information: YES

Which of the following is included as part of the Financial Report of the United States Government but not the performance and accountability report (PAR) prepared by federal agencies and departments?

Which of the following reflects the appropriate classification categories for the net assets of not-for-profit organizations?

Permanently restricted, temporarily restricted, unrestricted.

Special purpose governments differ from general purpose governments in that special purpose governments:

Provide a single function or limited range of functions.

A distinguishing difference between governments and not-for-profit organizations is:

Taxation as a significant source of funding.

Which of the following statements regarding primary sources of accounting and financial reporting standards is false?

The FASB sets standards for all business and not-for-profit entities.

According to GASB Concepts statement #1, the concept of accountablility:

All of the Above (Is based on the belief that citizens have a right to know Includes the right to receive openly declared facts that may lead to public debate by citizens and their elected representatives. Is the cornerstone of all governmental financial reporting.)

The concept of interperiod equity refers to whether:

Current year revenues were sufficient to pay for current year services.

Which of the following is included in the minimum requirements for general purpose external financial reporting of a government?

Management discussion and Analysis (MD&A) and basic financial statements.

The basic financial statements of a state or local government include all of the following except?

Under GASB standards, financial information is useful for assessing fiscal accountability is primarily reported in which financial statements?

Fund Financial Statements ONLY.

Which of the following is not a required section of a federal agency or department's performance and accountability report (PAR)?

A statement of non-participation in political matters.

The primary reason NFP organizations should report expenses incurred for program purposes separately from those for supporting services such as management and general and fund-raising is that:

Donors, potential donors, oversight bodies, and others need to know what percentage of total expenses are being incurred for carrying out the NFP's programs, rather than for overhead and fund-raising.

1.  In which of the following funds would it not be appropriate to record depreciation expense?

2. Which of the following is not a characteristic of a fund as described by GASB standards?

C. A segregated quantity of cash and other financial resources on deposit with a designated trustee.

3. Under the modified accrual basis of accounting, revenues should be recognized when:

Measurable and available.

4. Which of the following funds are governmental funds?

C. General fund, special revenue funds, capital projects funds, debt service funds, and permanent funds.

5. Which of the following funds would be most appropriate for accounting for an activity that provides goods or services to the public for a fee that is intended to make the activity self-supporting?

6. In accounting for state and local governments, the modified accrual basis is required for:

B. Governmental funds only.

7. Reporting fund financial information in separate columns for each major fund and aggregate information for non-major funds:

D. Is required by GAAP for state and local governments.

8. Which of the following must be reported as a major fund?

- The General Fund . - 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 (assets, liabilities, and so forth), as applicable, and at least 5% of the combined governmental and enterprise fund total amount for the same element.

Which of the following is not an activity category in which general purpose governments typically engage?

All of the following are part of the basic financial statements except:

Management's discussion and analysis.

Which of the following is a basic fund financial statement?

Statement of revenues, expenditures, and changes in fund balances. B)Statement of fiduciary net position . C)Statement of cash flows. D)All of the above are correct statements.

Which of the following financial statements is required at the government-wide level?

GASB's first accounting and reporting principle requires that the accounting system used by a state or local governments must make it possible:

B)To present fairly and with full disclosure the funds and activities of the governmental unit in conformity with GAAP. C)To demonstrate compliance with finance-related legal and contractual provisions.

A fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives, is known as a:`

Which of the following basic financial statements is most useful in assessing fiscal accountability?

Balance sheet—governmental funds.

The basis of accounting under which revenues are recognized when measurable and available is the:

Modified accrual basis of accounting

Depreciation expense for depreciable general capital assets should be reported on the:

Which of the following fund types focuses on the measurement of current financial resources and flows thereof?

General fund . B)Capital projects fund. C)Permanent fund . D)All of the above

The accrual basis of accounting is used in accounting for financial transactions that affect:

Governmental activities at the government-wide level. B)Proprietary funds . C)Fiduciary funds D)All of the above.

General capital assets, such as buildings and equipment, would be recorded in the accounts of:

Governmental activities at the government-wide level.

If a capital projects fund borrows $500,000 by issuing a 5-year note payable, how does this transaction affect the accounts of the capital projects fund?

A)Cash is increased by $500,000 . B)Fund balance is increased by $500,000

Which of the following is not a fiduciary fund type?

Financial reporting for internal service funds differs from that for enterprise funds in which of the following ways?

Internal service fund financial information is generally reported in the governmental activities column of the government-wide financial statements

The establishment of a fiduciary fund is warranted when

A trust or agency relationship exists in which the beneficiary is a private party (individuals, organizations, or other governments).

Capital assets, including depreciation on those assets, would appropriately be reported in which of the following funds?

B)Enterprise. C)Pension Trust.

Financial information for fiduciary funds is reported in which of the following basic financial statements?

Government-wide financial statements: NO Fund financial statements: YES

Which of the following is always reported in a separate column of a governmental fund financial statement?

A city had severalspecial revenue funds. Fund X had total revenues that exceeded 10% of totalrevenues for all governmental funds and exceeded 5% of total revenues forgovernmental and enterprise funds combined. Fund Y had total assets thatexceeded 10% of total assets for all governmental funds and total revenues thatexceeded 5% of total revenues for governmental and enterprise funds combined. Which of these funds would be classified as a major fund?

Governmental type funds include which of the following?

General, special revenue, capital projects, debt service and Permanent

Proprietary fund types include which of the following?

Enterprise Internal Service

Fiduciary fund types include?

Agency Investment Trust Pension & other employee benefit trust type Private-purpose trust.

Which of the following is a correct statement about how financial information for the activities of governments should be reported?

Information about business type activities should be reported in both the government-wide and proprietary fund financial statements using the same basis of accounting for both.

Which of the following is true regarding the basic financial statements of a state or local government?

Separate columns should be provided in the government wide financial statements for governmental activities and business-type activities. Governmental fund and proprietary fund financial statements should provide a separate column for each major fund. Aggregate info about all nonmajor governmental or enterprise funds should be reported in a single column of the governmental or proprietary fund financial statements.

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

Governmental fund financial statements.

The measurement focus and basis of accounting that should be used for the governmental fund financial statements are:

Current Financial resources and modified accrual

Which of the following is true regarding the definition of a fund?

A fund is a fiscal and accounting entity. A fund has a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances and wages 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.

Capital assets used for governmental activites, such as those of the police department should be reported in:

government-wide financial statements only.

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:

The fiduciary fund financial statements.

Under the modified accrual basis of accounting:

Revenues are recognized when current financial resources become measurable and available to pay current-period obligations.

Financial information about an internal service fund should be reported in the proprietary fund financial statements and the:

Governmental Activities column or the Business-type Activities column of the government-wide financial statements depending on whether the internal service fund predominantly serves governmental activities or business-type activities.

A certain city reports the following year-end total assets: General fund     18,400,000 library fund       2,900,000 debt service fund 2,600,000 total governmental funds       26,300,000 total governmental& enterprise funds combined: 51,250,000 Which should be reported as major funds?

General fund and Library Fund.

1.  The account "Interfund Transfers In" would be classified in a General Fund statement of revenues, expenditures, and changes in fund balances as a(an):

B. Other financing source.

2. Which of the following would be classified as a general revenue?

D. Fuel taxes earmarked for maintenance of roads and bridges.

3. The County Commission of Dudsville adopted its General Fund budget for the year ending June 30, comprising estimated revenues of $1,500,000 and appropriations of $850,000. Dudsville utilizes the budgetary accounts required by GASB standards.  The journal entry to record budgeted appropriations will include:

A credit to Appropriations, $850,000.

4. Extraordinary items and special items are reported:

C. As separate line items below General Revenues in the statement of activities.

5. Governmental fund balances may be classified as all of the following except

6. Which of the following best describes the recommended format for the government-wide statement of activities?

D. Expenses minus program revenues plus general revenues equals change in net position.

8.  Interfund transfers and debt issue proceeds received by a governmental fund should be recorded as other financing sources.

Which of the following describes the recommended format for the government-wide statement of activities?

Program expenses minus program revenues equals net (expense) revenue; net (expense) revenue plus general revenues, transfers, and net special and extraordinary items equals change in net position.

Camden City receives occupancy taxes collected by all local hotels, motels, and inns. These revenues are restricted by state law for promotion of tourism. These tax revenues should be reported in the government-wide statement of activities as:

Depreciation expense on general capital assets may be reported on the government-wide statement of activities as:

A)A direct expense of a function or program. B)An indirect expense that can either be allocated to functions or programs on some appropriate basis, such as square footage of building use, or be reported on a separate line on the statement of activities.

A revenue or expense that is significant in amount, beyond control of management, and is both unusual in nature and infrequent in occurrence should be reported as a (an):

Under which basis of accounting is it appropriate to recognize expenditures rather than expenses?

Which of the following kinds of assets would be reported on the balance sheet for the General Fund or other governmental fund types?

A)Taxes receivable . B)Inventory of materials and supplies. C)Prepaid items. D)All of the above.

The Village of Wyclyffe levies its property taxes on November 1 each fiscal year. Taxes are due in two installments with due dates of December 1 of the current year and April 1 of the following year. Wyclyffe's fiscal year ends on December 31. To record a tax levy of $1,000,000, assuming all taxes will be collected when due, which account(s) will be credited as revenues of the current year in the General Fund and for what amounts?

Revenues, $500,000; Deferred Revenues, $500,000.

The expenditure classification "fuel and other vehicular supplies" is an example of which of the following types of classifications?

Which of the following is an activity classification for expenditures?

Which of the following accounts is classified as an operating statement account rather than a budgetary account?

An expenditure differs from an expense in which of the following ways?

An expenditure is the cost to acquire a good or service; an expense is the cost of a good or service consumed during the period.

According to GASB standards, a budgetary comparison can be in the form of a:

A)Basic financial statement. B)Required supplementary information schedule.

Fund balances of the General Fund at year-end represents the:

Arithmetic difference between total assets and total liabilities of the fund, assuming there are no deferred outflows or inflows or resources

Which of the following inflows to a governmental fund would not be classified as revenue?

An interfund transfer in.

Carthage City's budget for the next fiscal year requires that $1,200,000 of revenues be raised from property taxes. Its records indicate that an average 3 percent of taxes levied is never collected. To provide reasonable assurance that $1,200,000 of property tax revenues will be available for spending, the city's property tax levy (decimal amounts rounded to the next higher dollar) should be at least:

The balance of the Expenditures control account in a government's general ledger must equal:

The sum of the balances of the individual expenditure accounts in the Appropriations, Expenditures, and Encumbrances Subsidiary Ledger.

In a city's Appropriations, Expenditures, and Encumbrances Ledger, Available Appropriations (or, alternatively, Available Balance) of a particular account is calculated as:

Appropriations minus the sum of encumbrances and expenditures.

At any given date during the year, the balance of a revenue detail account in the revenue subsidiary ledger represents the:

The difference between the amount of estimated revenues recorded in the budget entry and revenues recognized to date.

The Encumbrances account should be credited when:

Which of the following is part of the minimum external financial reporting requirements for a tax-supported independent public school district?

A)Management's discussion and analysis. B)District-wide financial statements. C)Fund financial statements. D) All of the above.

Which of the following best describes the recommended format for the government wide statement of activities?

Expenses minus program revenues equals net (expense) revenue. Net (expense) revenue plus general revenues equals change in net position.

Which of the following is an acceptable method of reporting depreciation expense for depreciable assets used by governmental activities?

Report as a direct expense of the function or program with witch the related deprciable assets are identified. Report as an indirect expense on a separate line, or as an expense of the general government *or similar) function for depreciable assets that benefit all functions or programs.

GASB standards require that fund balances of a governmental funds be classified according to whether the fund balance is spendable or non spendable  Spendable fund balances are further classified as:

Restricted
Committed Assigned Unassigned

A special item differs from an extraordinary item in that a special item is:

within the control of management.

One characteristic that distinguishes other financing sources from revenues is that other financing sources:

Arise from debt issuances or interfund transfers in.

The process by which legal valuation is placed on a taxable property is?

According to GASB standards, expenditures are classified by:

Fund Function or Program Organization unit, Activity Character Object

Under GASB requirements for external financial reporting, one would find the budgetary comparison schedule (or statement) in the:

As selected by the government: -RSI (required supplementary information) -Basic Financial Statements

Before Placing a purchase order, a department should heck that available appropriations are sufficient to cover the cost of the item being ordered.; This type of budgetary control is achieved by reviewing?

Appropriations minus the sum of expenditures and encumbrances.

1. When a computer is ordered by a department of the government, the purchase order should be recorded in the General Fund as a debit to:

2. Which of the following would properly be reported in the operating statement of a governmental fund?

A. Interest on a tax anticipation note issued and repaid during the period.

3. The Encumbrances Outstanding account is properly termed a:

4. The Town of Bedrock levied property taxes in the amount of $800,000.  The town estimates that one percent will be uncollectible. The journal entry to record the tax levy will include:

B. Credit to revenues for $792,000

5.  If state law requires that local governments prepare General Fund and special revenue fund budgets on a basis that differs from the basis of accounting required by GAAP, then the budgetary comparison schedule or statement should:

B. Be included with the actual figures presented on the budget basis and then reconciled to the GAAP basis.

6.  An interfund transfer in should be reported in a governmental fund operating statement as a(an):

C. Other financing source.

7.  Which of the following best describes the proper treatment for uncollectible amounts of tax revenue?

B. Report revenues net of uncollectible amounts.

8.  Which of the following should not be reported on the balance sheet of the General fund?

A General Fund balance sheet differs from a government-wide statement of net position in that:

A General Fund balance sheet reports only current assets and liabilities; a government-wide statement of net position reports current and noncurrent assets as well as current and noncurrent liabilities.

The net position section of the government-wide statement of net position reports the three categories:

Net investment in capital assets, restricted, and unrestricted.

The dual-track approach to governmental accounting used in this text is most useful because:

It helps the student learn the different ways in which accounting transactions and events affect the government-wide and fund financial statements, as well as providing a manual accounting system that aids in preparing both kinds of statements.

Which of the following is properly reported as a liability of the General Fund?

When the annual budget is recorded, the legislative authorization to expend resources is:

Credited to Appropriations

The Parks and Recreation Department ordered equipment estimated to cost $5,200 and an encumbrance was recorded in that amount. When the equipment was received at an actual cost of $5,100, the required General Fund journal entry should include:

A credit to Encumbrances in the amount of $5,200.

Which of the following would be recorded as a program revenue in the governmental activities journal?

A)Property taxes. B)Motor fuel taxes . C)Sales taxes . D)None of the above

Which of the following represents the typical sequence of expenditure-related transactions?

Appropriation, Encumbrance, Expenditure, Disbursement.

Stone Township's nonexempt taxable property has assessed valuation of $500,000,000. For the current fiscal year, Stone Township's Council has set a property tax rate of $4 per $100 of assessed valuation. For the past 10 years, property tax collections have averaged 96 percent of taxes levied. Based on this information, the journal entry in Stone Township's General Fund to record its tax levy will include a:

B)Debit to Taxes Receivable—Current in the amount of $20,000,000. C)Credit to Revenues in the amount of $19,200,000.

On June 30, the end of the City of Dalton's current fiscal year, uncollected property taxes of $900,000 became delinquent. The related estimated uncollectible account balance on these taxes was $90,000. On the same date, penalties on the delinquent taxes were assessed in the amount of $45,000. The city estimated that 10 percent of the penalties would not be collected. The journal entry in the General Fund to record the reclassification of current taxes to delinquent status will include a:

Debit to Estimated Uncollectible Current Taxes for $90,000.

On June 30, the end of the City of Dalton's current fiscal year, uncollected property taxes of $900,000 became delinquent. The related estimated uncollectible account balance on these taxes was $90,000. On the same date, penalties on the delinquent taxes were assessed in the amount of $45,000. The city estimated that 10 percent of the penalties would not be collected. The journal entry in the General Fund to record the penalties on delinquent taxes will include a:

Credit to Revenues for $40,500.

Late in its fiscal year, a federal agency approved Hilton Village's application for a $400,000 operating grant to provide recreational activities for at-risk youth. The program will begin in the following fiscal year. The grant provides for reimbursement of expenditures for services to eligible recipients rendered during the following fiscal year. On the notification date, the village's journal entry in the General Fund should include a:

None of the above. No entry should be made until all eligibility requirements have been met.

The governing body of the City of Taunton approved additional appropriations of $3,000 to cover unexpected overtime costs of the fire department. Approval of the additional appropriations will require a:

Debit to Budgetary Fund Balance.

The General Fund received $100,000 in lieu of taxes from the city owned water utility, an enterprise fund. This amount approximates the value of services provided to the utility by departments accounted for by the General Fund. This is an example of a (an):

Internal exchange transaction for interfund services provided and used.

The General Fund recorded a liability to the city owned electric utility (an enterprise fund of the city) for electric power used during the prior month. The journal entry for the General Fund will include:

An interfund transfer out should be reported in a governmental fund operating statement as a (an):

On July 1, the first day of its fiscal year, Claret City levied a $2,000,000 property tax which is payable in full on December 1 of the same year. On September 15, the city decided to borrow $100,000 in 90-day, 5 percent tax anticipation notes to cover operating expenditures until the tax revenues are collected. The journal entry in the General Fund on September 15 to record the issuance of tax anticipation notes will include:

A credit to Tax Anticipation Notes Payable

The Revenues account of a state or local government is debited when:

The account is closed at the end of the year.

During January 2014 General Fund supplies ordered in the previous fiscal year and encumbered at an estimated amount of $1,000 were received at an actual cost of $1,100. The entry to record this transaction will require a debit to:

Expenditures—2014 in the amount of $100.

Which of the following is a correct statement regarding the schedule of revenues, expenditures, and changes in fund balance—budget and actual prepared for the General Fund?

A)Both the original and final budgeted amounts must be reported. B)Actual amounts should be reported using the budgetary basis. C)Only expenditures charged to the current period appropriations should be reported in this schedule. D)All of the above.

Permanent funds differ from endowed private-purpose trust funds in that:

Permanent funds use the modified accrual basis of accounting.

The Town of Waynesville received a gift of $500,000 that is to be invested by the town and the earnings thereon are to be used for maintenance of the Waynesville Community Cemetery. The town has determined that a permanent fund will be established to account for this gift. The journal entry in the permanent fund to record receipt of the cash gift will include a:

Credit to Revenues—Contributions for Endowment.

In which class of nonexchange transactions are revenues recognized when the underlying exchange has occurred?

Which of the following is a correct statement regarding interim financial reporting for state and local governments?

B)Currently, interim financial reporting is not required to parties outside the government. C)At a minimum, interim financial information, such as actual and budgeted revenues and expenditures for the year to date, should be prepared for use by internal managers on a quarterly, monthly, weekly, or other periodic basis, as needed.

When equipment was purchased with General Fund resources, which of the following accounts would have been debited to the General Fund?

The city of Marshall uses the purchases method for recording its inventory of supplies in the General fund. Rather than using a perpetual inventory system. inventories are updated at year-end based on a physical count. Physical inventories were $85,000 and $75,000 at Dec 31, 2013 and 2014 respectively. The adjusting journal entry on Dec 31, 2014 will include a:

Credit to Inventory of Supplies for $10,000.

Goods for which a purchase order had been placed at an estimated cost of $1,000 were received at an actual cost of $985. The journal entry in the General fund to record the receipt of the goods will include a:

Debit to encumbrances outstanding fr $1,000 Credit to vouchers payable for $985 Debit to expenditures for $985.

Which of the following is not related to responsibility accounting?

Which of the following is not a basic control function of a responsibility accounting system?

Which of the following is a feature of responsibility accounting?

Which of the following is not an example of a responsibility center?