ACCOUNTING-.In order to conform to GASB standards, goods and services

QUESTION

1.In order to conform to GASB standards, goods and services provided by internal service funds to other departments of the government must be priced to:(Points : 4) Cover variable costs only.Cover full costs (both fixed and variable).Cover full costs, plus an additional charge to cover inflation and anticipated needs for expansion.GASB standards do not address appropriate fees. Each government determines its own operating and pricing policies, which may include subsidizing the cost of operating an internal service fund.Question 2. 2.In an interim balance sheet of a governmental fund, the fund equity section would not include(Points : 4) Reserve for encumbrances. Contributed capital. Reserve for inventory. Available appropriations.Question 3. 3.Which of these fiduciary fund types has no fund equity?(Points : 4) Investment trust funds. Pension trust funds. Agency funds. Private-purpose trust funds.Question 4. 4.When a cash and investment pool of a certain city was established, the debt service fund transferred investments to the pool having a cost of $3,000,000 but a current fair market value of $3,100,000. To record this transaction, the journal entry made by the debt service fund will include:(Points : 4) A debit to Equity in Pooled Cash and Investments in the amount of $3,100,000 A credit to Revenues–Change in Fair Value of Investments in the amount of $100,000 A credit to Investments in the amount of $3,000,000 All of the aboveQuestion 5. 5.Debt service funds are used to record:(Points : 4) Both principal and interest payments of debt issues. Only interest payments on debt issues. Only principal payments of debt issues. Neither principal nor interest payments of debt issues.Question 6. 6.In which of the following funds or activities general journals would it not be appropriate to record depreciation of capital assets?(Points : 4) Capital projects fund Internal service fund Business-type activities Governmental activitiesQuestion 7. 7.The modified accrual basis of accounting applicable to governmental fund types requires that revenues be recognized when(Points : 4) Earned Authorized by the budget ordinance Measurable and available Collected in cashQuestion 8. 8.The Expenditures control account of a government is debited when(Points : 4) The budget is recorded Supplies previously encumbered are received Supplies are ordered The invoice is paidQuestion 9. 9.What amount of the following items should be accounted for in an enterprise fund? Warehouse equipment used to store supplies for delivery to all city departments and agencies on a cost-reimbursement basis.————— $350,000Equipment used for supplying electric power to residents.————— $2,100,000Receivables for completedsidewalks to be paid for in installments by affected property owners. Construction was financed by special assessment bonds for which the town has no liability.————— $1,760,000Cash received from federal government, dedicated to highway maintenance, that must be accounted for in a spearate fund.————— $1,640,000(Points : 4) $2,100,000 $1,760,000 $1,640,000 $350,000Question 10. 10.What is the key difference between budgets prepared by governmental units and by commercial organizations?(Points : 4) Budgets prepared by commercial organizations must be approved by a governing body whereas those prepared by governmental units needs no approvals. Budgets prepared by governmental units are legal documents, whereas those prepared by commercial organizations are not. Operating and capital budgets and cash forecasts are prepared by governmental units but only operating budgets are prepared by commercial organizations. Budgets prepared by commercial organizations are formally recorded in the organizations” operating accounts, whereas those prepared by governmental units are not.Question 11. 11.Which of the following funds of a government uses the same basis of accounting as an enterprise fund?(Points : 4) Permanent trust Investment trust fund Special revenue Capital projectsQuestion 12. 12.Which of the following is a budgetary account?(Points : 4) Encumbrances Reserve for Encumbrances Expenditures RevenuesQuestion 13. 13.The accrual basis of accounting applicable to proprietary fund types requires that exchange revenues be recognized when:(Points : 4) Earned. Collected in cash. Authorized by the budget ordinance. Measurable and available.Question 14. 14.Equipment acquired under capital leases and used by activities accounted for in governmental funds should be recorded in the governmental activities accounts at the inception of the lease at(Points : 4) Fair value. Present value of minimum lease payments. Lower of fair value or present value of minimum lease payments. None of the above; leased assets should not be recorded in the accounts.Question 15. 15.Which of the following is properly reported as a liability of the General Fund?(Points : 4) General obligation bonds payable Accounts payable Tax anticipation notes payable Both b and c are correctQuestion 16. 16.Under the modified accrual basis of accounting, revenues should be recognized when:(Points : 4) Earned. Collected in cash. Authorized by the budget ordinance. Measurable and available.Question 17. 17.Which of the following distinguishes governments from nongovernmental not-for-profit organizations?(Points : 4) Absence of profit motive The power to enact and enforce a tax levy Resource providers do not expect benefits proportional to the resources provided Absence of a defined ownership interest that can be sold, transferred, or redeemedQuestion 18. 18.In order for the accounting system of a local government to be in conformity with generally accepted accounting principles(Points : 4) Only governmental funds, and proprietary funds should be provided. Only those funds required by law, GASB standards, and sound financial administration should be provided. Only those funds required by law should be provided. All categories of funds must be provided.Question 19. 19.Which of the following assets could appear in the governmental fund balance sheet?(Points : 4) Taxes receivable Capital assets Deferred charge for issuance of bonds costs Infrastructure assetsQuestion 20. 20.A wealthy local merchant donated a building to the city of Rosewood during the year. The original cost of the building was $300,000. Accumulated depreciation at the date of the gift amounted to $250,000. Fair market value at the date of the gift was appraised at $600,000, of which $40,000 was appraised as value of the land on which the building was situated. At what amount should Rosewood record this donated property in the governmental activities accounts at the government-wide level?(Points : 4) $50,000 $250,000 $600,000 $ 0Question 21. 21.The Financial Accounting Standards Board has the responsibility for setting accounting and financial reporting standards for(Points : 4) All federal and state organizations All not-for-profit organizations that are nongovernmental and business entities All not-for-profit organizations Both b and c are correctQuestion 22. 22.Based on the information below, what amount should be accounted for in a debt service fund?Warehouse equipment used to store supplies for delivery to all city departments and agencies on a cost-reimbursement basis$ 200,000Equipment used for supplying electric power to residents1,800,000Receivables for completed sidewalks to be paid for in installments by affected property owners. Construction was financed by special assessment Bonds for which the town has no liability.1,900,000Cash received from federal government, dedicated to highway maintenance, that must be accounted for in a separate fund1,990,000(Points : 4) $200,000 $1,800,000 $1,900,000 None of the aboveQuestion 23. 23.Why is encumbrance accounting usually used in Capital Projects Funds?(Points : 4) Long term debt is not recorded in these funds. The budget must be recorded in these funds. It helps the government control the expenditures. The modified accrual basis of accounting is used.Question 24. 24.Under which basis of accounting for a government should revenues be recognized in the accounting period in which they are measurable and available?(Points : 4) Accrual basis: No; Modified accrual basis: No Accrual basis: Yes; Modified accrual basis: No Accrual basis: Yes; Modified accrual basis: Yes Accrual basis: No; Modified accrual basis: YesQuestion 25.25.Accountability for capital assets used by departments accounted for by the governmental funds of a government should be established in(Points : 4) The appropriate governmental funds The property, plant, and equipment fund Departmental memorandum records The governmental activities accounts at the government-wide level

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