Day 26 - Governmental Funds

Question 1

When a lessee signs a lease with a written purchase option, the lessee’s cash Flow army will be:

Answer 1

Negatively impacted by variable lease payments not included in the lease liability

MCQ-08771

Question 2

The primary authorities for determining the measurement focus and basis of governmental accounting is?

Answer 2

Governmental Accounting Standards Board (GASB)

MCQ-01157

Question 3

The three primary users of external financial reports of a state government:

Answer 3

1. Citizens / Advocate groups
2. Legislative / Oversight groups
3. Investors / Creditors

MCQ-05803

Question 4

What characteristics of service efforts is most difficult for governmental reporting?

Answer 4

Relevance

MCQ-00892

Question 5

What event is supportive of interperiod equity as financial reporting objective?

Answer 5

A balanced budget

MCQ-00927

Question 6

What is a paramount objective of financial reporting for state and local governments?

Answer 6

Accountability

MCQ-08269

Question 7

In complying with GASB 34, a government will report separate funds financials for it’s governmental and proprietary funds for the purpose of:

Answer 7

Reporting additional and detailed information about the primary government

MCQ-00889

Question 8

A city accountant of a new municipality is setting up a new fund, how many should he create?

Answer 8

The minimum number of funds consistent with legal requirements and sounds financial administration

No minimum number of funds required by GAAP

MCQ-08492

Question 9

Modified Accrual Accounting - Governmental

GRaSPP

Answer 9

General Fund
Special Revenue Funds
and
Debt Service Funds
Capital Projects Funds
Permanent Fund

MCQ-00890

Question 10

Economic Resources Measurement Focus and Full Accrual Accounting - Proprietary & Fiduciary Funds

SE CIPPOE

Answer 10

Proprietary
Service
Enterprise - account for FA similar to a “for profit” organization

Fiduciary
Custodial
Investment Trust
Private Purpose Trust
Pension and Other Employee Benefit Trust

MCQ-00890

Question 11

The economic resources measurement focus and accrual basis accounting would be most appropriate for which fund?

Answer 11

Internal Service Fund

MCQ-00891

Question 12

The measurement focus of governmental-type funds is on the determination of:

Answer 12

1. Current Financial Resources
2. Financial Position

MCQ-00893

Question 13

The measurement focus of governmental fund accounting is on what?

Answer 13

Current Financial Resources

MCQ-08491

Question 14

ABC City received a gift, the principal of which is to be invested in perpetuity with the income to be used to support the local library. What fund should this gift be recorded in?

Answer 14

Permanent Fund

Permanent Funds are used to report resources that are legally restricted to the extent income, and not principal, may be used to support government programs that benefit the public

MCQ-06942

Question 15

GRaSPP & SE & CIPPOE

Answer 15

Governmental Funds
- General
- Special Revenue
- Debt Service
- Capital Projects
- Permanent

Proprietary Funds - Business Type Activities
- Internal Service
- Enterprise

Fiduciary Funds - Excluded from Government-Wide FS (the word “trust” = fiduciary)
- Custodial
- Investment trust
- Private Purpose trust
- Pension and Other Employee Benefit

MCQ-07244
MCQ-05056

Question 16

A local governmental unit could have funds using what accounting bases?

Answer 16

1. Accrual Basis
   OR
2. Modified Accrual Basis

MCQ-01206

Question 17

Under the modified accrual basis of accounting for a governmental unit, when should revenues be recognized?

Answer 17

When they become Available and Measurable

MCQ-01204

Question 18

What item is recognized for governmental activities in the government-wide Stmt of Activities and not the Stmt of Revenues, Expenditures and changes in fund balances for governmental funds?

Answer 18

Property tax revenue for an amount deferred because it was NOT available

MCQ-04303