accounting_mcqs x
1. The measurement focus and basis of accounting that are most unlike those used by business entities are those used by (Points : 2)
Governmental funds. |
2. Under the dual-track accounting approach used in the text, which of the following transactions or events would be recorded in the general journal for governmental activities at the government-wide level? (Points : 2) Recording the annual budget, property tax levy, and payroll. |
3. Which of the following would result in the amortization of a bond discount or premium? (Points : 2) Bonds are issued: No; Bonds are held as investments: No |
4. Which of the following funds are governmental funds? (Points : 2) General Fund, special revenue funds, capital projects funds, debt service funds, and private-purpose trust funds. |
5. When the budget of a government is adopted and Estimated Revenues exceed Appropriations, the excess is (Points : 2) Credited to Budgetary Fund Balance. |
6. The Financial Accounting Standards Board has the responsibility for setting accounting and financial reporting standards for (Points : 2) All not-for-profit organizations that are nongovernmental and business entities. |
7. On the due date for bond interest, the debt service fund journal entry (or entries) will include a debit to (Points : 2) Expenditures-Bond Interest. |
8. Which of the following is a proprietary fund? (Points : 2) Special revenue fund. |
9. Which of the following distinguishes governments from nongovernmental not-for-profit organizations? (Points : 2) Absence of profit motive. |
10. Generally accepted accounting principles applicable to state and local governments require that (Points : 2) Only governmental funds and proprietary funds should be provided. |
11. In late June, the Everready Construction Co. submitted a $600,000 progress billing on a construction contract. On July 2, the bill was approved for payment, subject to a five percent retention, as provided by the contract. Construction expenditures should be debited when (Points : 2) The bill is approved for payment. |
12. Which of the following information should be included in the financial section of a comprehensive annual financial report? (Points : 2) Transmittal letter. |
13. The city of Milan was notified that it had been approved for a state government grant in the amount of $1,000,000 to help finance its new city jail. The money from the grant will be received later in the current fiscal year. The journal entry to record this transaction will include (Points : 2) A credit to Other Financing Sources upon notification. |
14. Extraordinary items and special items are reported (Points : 2) With normal recurring general revenues. |
15. The General Fund received $200,000 in lieu of taxes from the city owned water utility, an enterprise fund. This is an example of a(an) (Points : 2) Interfund transfer. |
16. When the budget of a government is recorded and Appropriations exceeds Estimated Revenues, the Budgetary Fund Balance account is (Points : 2) Credited at the beginning of the year and debited at the end of the year. |
17. The expenditure classification “Public Safety” is an example of which of the following types of classifications? (Points : 2) Activity. |
18. Which of the following statements is always true concerning the reporting of debt service funds? (Points : 2) Debt service funds are reported in a separate column in the governmental fund financial statements. |
19. Which of the following would be considered an internal exchange transaction? (Points : 2) The General Fund transfers $200,000 to establish a Central Supplies Fund; this amount will not be repaid. |
20. Which of the following is identified by the GASB as the “cornerstone” of all financial reporting in government? (Points : 2) Understandability. |
21. Five trucks were leased by Pleasantville under terms qualifying as a capital lease. These trucks are to be used by the fire department. Where would the capital lease transaction be recorded? (Points : 2) Internal service fund. |
22. On June 1, 2012, Brooktown levied special assessments in the amount of $500,000, payable in 10 equal annual installments beginning on June 30, 2012. The assessment installments are intended to pay principal and interest on special assessment bonds for which the town has pledged its full faith and credit should assessments be insufficient. Assuming no allowance for uncollectible receivables, the journal entry in the debt service fund on June 1, 2012 would include: (Points : 2) A debit to Assessments Receivable-Current for $500,000. |
23. In 2011, Weaver City signed a contract in the amount of $6,000,000 for the construction of a new city hall. Expenditures were $4,000,000 in 2011 and $2,050,000 in 2012, which included a change to the original construction design in the amount of $50,000. What amount should be added to net capital assets in the governmental activities accounts in 2012? (Points : 2) $6,000,000 |
24. The accrual basis of accounting applicable to proprietary fund types requires that exchange revenues be recognized when (Points : 2) Earned. |
25. The expenditure classification “City Attorney” is an example of which of the following types of classification? (Points : 2) Function. |
26. On what should the government-wide financial statements report? (Points : 2) Net assets and results of financial operations of the government as a whole. |
27. Which of the following is true for debt service funds? (Points : 2) A legally required budget should be recorded in the accounts. |
28. Which of the following budgetary accounts is typically used by a debt service fund? (Points : 2) Encumbrances. |
29. Which of the following is not a budgetary account? (Points : 2) Encumbrances. |
30. When bonds are sold at a premium for a capital project, the premium amount generally (Points : 2) Increases the cash available to the capital projects fund. |
31. With regard to depreciation of general capital assets, which of the following statements is correct? (Points : 2) Depreciation expense should be recorded in the appropriate governmental funds, and recorded in the governmental activities accounts. |
32. The account “Interfund Transfers In” would be classified in a General Fund statement of revenues, expenditures, and changes in fund balance as a(an) (Points : 2) Revenue. |
33. Which of the following steps in the acquisition of goods and services by an activity accounted for by the General Fund generally occurs first? (Points : 2) Disbursement. |
34. Which of the following is true regarding capital projects funds? (Points : 2) Encumbrances accounting is employed. |
35. The body that has been established to recommend accounting and financial reporting standards for the federal government is the (Points : 2) Financial Accounting Standards Board (FASB). |
36. The Town of Ashland levied property taxes in the amount of $800,000. The town estimates that 1 percent will be uncollectible. The journal entry to record the tax levy will include (Points : 2) A debit to cash for $792,000. |
37. Which of the following is a fiduciary fund? (Points : 2) Investment trust fund. |
38. Which of the following should not be reported as a liability of the General Fund? (Points : 2) General obligation bonds payable (due in 10 years). |
39. A capital projects fund might be used to account for which of the following activities? (Points : 2) Maintaining roads and bridges. |
40. The fund financial statements for governmental funds should include a (Points : 2) Statement of cash flows. |