ACCT 3050: Chapter 3

Question 1

Budgetary practices of a government may differ from GAAP accounting practices due to ______. (choose 2)

*timing differences

*functional differences

*classification differences

*entity differences

Answer 1

timing differences

entity differences

perspective differences

Question 2

Transfers into a fund and proceeds of debt issues and sales of government assets are examples of _____ of the fund.

*expenditures

*other financing uses

*other financing sources

*revenues

Answer 2

other financing sources

Question 3

What is the purpose of creating a special revenue fund? (choose 3)

*to demonstrate that revenue was used for specified purposes.

*to account for a tax authorized by a legislative body for a specified purpose.

*to account for revenue restricted by an outside donor or grantor.

*to account for unrestricted revenue provided by an outside donor or grantor.

*to demonstrate profitability of resources available to the General Fund.

Answer 3

to demonstrate that revenue was used for specified purposes.

to account for a tax authorized by a legislative body for a specified purpose.

to account for revenue restricted by an outside donor or grantor.

Question 4

For property taxes, GASB requires collection within _____ days after the end of the current period to be considered available.

*60

*120

*30

*90

Answer 4

60

Question 5

Ad valorem property taxes ___. (choose 3)

*are based on the value of the property

*are not used as a source of revenue for many state governments

*may not be levied against personal property

*are a good source of financing for local governments

Answer 5

are based on the value of the property

are not used as a source of revenue for many state governments

are a good source of financing for local governments

Question 6

True or false: Penalties on delinquent taxes should be recognized as revenue when they are received.

Answer 6

False

Penalties should be recognized as revenue when they are assessed.

Question 7

The purpose of a(n) ______ is to defray part or all of the cost of a specific improvement or service that is presumed to be a particular benefit to the properties against which the special assessments are levied.

*ad valorem tax

*special assessment

*sales tax

*income tax

Answer 7

special assessment

Question 7

Interest may apply to delinquent taxes for the length of time between the day the tax becomes delinquent until ______. (choose 2)

*the day it is paid

*April 15th

*the last day of the year

*the day it is discharged

Answer 7

the day it is paid

the day it is discharged

Question 8

Major revenue source classes for revenue include ______. (choose 3)

*estimated revenues

*charges for services

*taxes

*appropriations

*fines and forfeits

Answer 8

charges for services

taxes

fines and forfeits

special assessments

licenses and permits

intergovernmental revenues

miscellaneous revenues

Question 9

An internal allocation of funds on a periodic basis usually agreed upon by the department heads and chief executive is called a(n) ______.

*disbursement

*expenditure

*allotment

*encumbrance

Answer 9

allotment

Question 10

Budgeted interfund transfers and debt proceeds may be recorded in ______. (choose 2)

*Intergovernmental Revenues

*Estimated Other Financing Uses

*Other Financing Sources and Uses

*Estimated Other Financing Sources

Answer 10

Estimated Other Financing Uses

Estimated Other Financing Sources

Question 11

An activity that is directed to the attainment of a specific purpose is called a(n) ______.

*object

*activity

*function

*program

Answer 11

program

Question 12

A key distinction between classification of expenditures by organizational unit and classification by program or function is that ______.

*responsibility for a function is fixed

*responsibility for both a unit and a function is fixed

*responsibility for a unit is fixed

Answer 12

responsibility for a unit is fixed

Question 13

The journal entry to record the issuance of a purchase order would include a credit to which account?

*Encumbrances Outstanding

*Encumbrances

*Expenditures

*Appropriations Outstanding

Answer 13

Encumbrances Outstanding

Question 13

Interest on a general long-term liability is an example of a(n) ____________ expense.

*indirect

*direct

Answer 13

indirect

Question 14

When a government treats property tax as a residual source of revenue, the amount to be raised for property taxes is determined ____ revenues from all other sources are budgeted.

*before

*after

Answer 14

after

Question 15

Taxes are levied on the assessed valuation of which type of property?

*Nontaxable property

*All property

*Taxes are not levied on property.

*Taxable property

Answer 15

Taxable property

Question 16

GASB standards provide that revenue from sales taxes, income taxes, and gross receipts tax be recognized ______.

*in the accounting period in which the collection occurs

*systematically over the life of the tax period

*in the accounting period in which the underlying transactions occur

Answer 16

in the accounting period in which the underlying transactions occur

Question 17

Match the type of revenue on the left with the description on the right.

Reported in the functions/programs section of the statement of activities.

Answer 17

Program revenues

Question 18

Match the type of revenue on the left with the description on the right.

Reported in a separate section in the lower portion of the statement of activities

Answer 18

General revenues

Question 19

Match the special reporting item with its definition.

Transaction or other events that are both unusual in nature and infrequent in occurrence

Answer 19

Extraordinary items

Question 20

Match the special reporting item with its definition.

Transactions or events that are within management’s control that may be either unusual in nature or infrequent in occurrence

Answer 20

Special items