ACCOUNTING-You are studying a set of financial statements prepared for the city of Baltimore

QUESTION

1. You are studying a set of financial statements prepared for the city of Baltimore. You find an asset listed as a building which is reported as $2.4 million. The statement also shows accumulated depreciation of $700,000 for a book value of $1.7 million. In which of the following are you not looking as you study the statements for the city of Baltimore?A.) Fund-based financial statements for governmental fundsB.) Government-wide financial statements for business-type activitiesC.) Government-wide financial statements for governmental activitiesD.) Fund-based financial statements for proprietary funds2. On January 1, Year One, the city of Columbia leases a small plane for 6 years (its entire life) to be used by officials whenever necessary. Payments are $20,000 per year with the first payment made immediately. The present value of these payments at a reasonable interest rate of 10 percent is $96,000. Which of the following is reported on government-wide financial statements for Year One?A.) Interest expense of $9,600B.) Depreciation expense of $16,000C.) Expenditures of $20,000D.) Expenditures of $40,0003. Montgomery County officials are currently preparing general purpose financial statements for Year One. Currently, they are working on the fund-based financial statements for the general fund and special revenue funds (the only two governmental funds recorded by the county government). Which of the following accounts will not be reported as an asset on the balance sheet for these funds as of December 31, Year One?A.) A computer that was received on December 27 that will not be paid for until late in January.B.) Supplies were received on December 28 and reported using the purchases method.C.) A receivable for property taxes was outstanding with collection expected early in February.D.) An investment was made in the shares of a publicly-held company that would be liquidated in the future as needed.4. The police department of New York City has just ordered a new police car at an approximate cost of $96,000. How is this reported in the government-wide financial statements produced by the city?A.) Financial commitments are not formally reported on the government-wide financial statements.B.) As an encumbrance in the governmental activitiesC.) As an encumbrance in the business-type activitiesD.) As temporarily restricted net assets in the governmental activities5. During the current year, city officials for the City of Atlanta transferred $70,000 as short-term financing for the city’s bus line. Because the bus line provides its service to the public for a fee, the money went from the general fund into an enterprise fund. On its government-wide financial statements, how is this transfer reported on the statement of activities?A.) It is not shownB.) As another financing source and another financing useC.) As a transfer-in and a transfer-outD.) As revenue and an expense

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