4C - Deriving Government-wide Financial Statements and Reconciliation Requirements Flashcards
Tree City reported a $1,500 net increase in fund balance for governmental funds. During the year, Tree purchased general capital assets of $9,000 and recorded depreciation expense of $3,000. What amount should Tree report as the change in net position for governmental activities?
$7,500
$(4,500)
$1,500
$10,500
$7,500
The reconciliation of the $1,500 increase in governmental fund balances (modified accrual basis) to the government-wide change in net position (full accrual basis) involves adding back the expenditure recorded in the governmental funds when the capital assets were purchased (+$9,000) and subtracting the depreciation expense required with full accrual (−$3,000).
Which of the following items is recognized for governmental activities in the government-wide statement of activities and not the statement of revenues, expenditures, and changes in fund balance for governmental funds?
Transfers between governmental funds
Salaries payable at the end of the current year that will be paid at the beginning of the subsequent year
A state grant awarded and received for road repairs that were completed this fiscal year
Property tax revenue for an amount deferred because it was not available
Property tax revenue for an amount deferred because it was not available
$58,800
In preparing Chase City’s reconciliation of the statement of revenues, expenditures, and changes in fund balances to the government-wide statement of activities, which of the following items should be subtracted from changes in fund balances?
Book value of capital assets sold during the year
Capital assets purchases
Payment of long-term debt principal
Internal service fund increase in net position
Book value of capital assets sold during the year
A summary reconciliation between fund financial statements and government-wide financial statements is required at the bottom of the fund statements or in an accompanying schedule. Assume that internal service funds provide goods and services for governmental functions. For the business-type activities portion of the government-wide statement of net position, the reconciliation should tie with the fund balance(s) of:
all enterprise and fiduciary funds that provide support services to the business-type activities.
all proprietary funds both enterprise and internal service.
all enterprise funds.
all enterprise funds and discretely presented component units.
all enterprise funds.
The business-like activities portion of the government-wide financial statements report the functions also reported in the enterprise funds and internal service funds providing goods and services to the enterprise funds.
In this problem, the internal service funds provide goods and services only for governmental functions. Fiduciary fund information is not shown within the government-wide financial statements. Discretely presented component unit information is shown separate from the governmental and business-like activities portions on the government-wide financial statements.
The three internal service funds of a town were presented in a single column in the basic financial statements. The town’s internal service funds supplied goods and services to the various governmental functions of the town. Combining the internal service funds in this way simplified:
the conversion of the fund-based information to the government-wide financial statement format.
the preparation and presentation of the combining fund statements.
the preparation of the notes to the financial statements.
the presentation of the budgetary schedules.
the conversion of the fund-based information to the government-wide financial statement format.
Which of the following activities should be excluded when governmental fund financial statements are converted to government-wide financial statements?
Proprietary activities
Government activities
Enterprise activities
Fiduciary activities
Fiduciary activities
On January 1, year 1, the general fund of a state government made a capital acquisition of $50,000. The asset’s useful life is 10 years, and the government uses the straight-line basis of depreciation. What is the complete worksheet entry that should be recorded on December 31, year 1, when reconciling the fund financial statements to the government-wide financial statements?
Debit capital asset $50,000; credit expenditures $50,000; debit depreciation expense $5,000; credit accumulated depreciation $5,000
Debit capital asset $45,000; credit capital acquisition $45,000
Debit capital asset $50,000; credit expenditures $45,000; credit accumulated depreciation $5,000
Debit capital asset $50,000; credit capital acquisition $45,000; credit accumulated depreciation $5,000
Debit capital asset $50,000; credit expenditures $50,000; debit depreciation expense $5,000; credit accumulated depreciation $5,000
Mornington County reported a $4,200 net increase in fund balance for governmental funds. During the year, Mornington purchased general capital assets of $43,000 and recorded depreciation expense of $17,000. What amount should Mornington report as the change in net position for governmental activities?
$47,200
$30,200
$16,000
$26,000
The reconciliation of the $4,200 increase in governmental fund balances (modified accrual basis) to the government-wide change in net position (full accrual basis) involves adding back the expenditure recorded in the governmental funds when the capital assets were purchased (+$43,000) and subtracting the depreciation expense required with full accrual (−$17,000), for a total change in net position of $30,200 ($4,200 + $43,000 − $17,000).
A summary reconciliation between fund financial statements and government-wide financial statements is required at the bottom of the fund statements or in an accompanying schedule. For the governmental activities portion of the government-wide statement of net position, the reconciliation should tie with the fund balance(s) of:
the general fund.
all governmental funds.
all governmental and fiduciary funds that provide services to the governmental functions.
all governmental and internal service funds that provide services to the governmental functions.
all governmental and internal service funds that provide services to the governmental functions.
The governmental activities portion of the government-wide statements reports the functions also reported in the general and other governmental funds. Internal service funds providing services for governmental functions are also included. Fiduciary fund information is not shown within the government-wide financial statement
