Deck 7

Question 1

The purpose for a government to present separate fund financial statements for its governmental and proprietary funds is to:

Answer 1

Report additional and detailed information about the primary government.

Question 2

This characteristic of service efforts and accomplishments is the most difficult to report for a governmental entity:

Answer 2

Relevance. Relevance means the information must bear logical relationship with the needs for it purpose.

Question 3

Fund accounting is used by governmental units with the resources that must be:

Answer 3

Segregated for the purpose of carrying out specific activities (e.g water and sewer operations) or attaining certain objectives (e.g providing drinking water and wastewater management services to customers).

Question 4

Compensated absence liability should be calculated based upon the pay or salary rate in effect:

Answer 4

At the balance sheet date. The valuation of the noncurrent liability on the government-wide statement of net position will be equal to the number of hours employees are entitled to receive upon termination times the rate of pay earned at the balance sheet date.

Question 5

Unassigned fund balance is a:

Answer 5

Residual classification for the general fund.

Question 6

The only fund that should have a positive unassigned balance is:

Answer 6

The general fund. Over-expenditures of resources in the other GRaSPP funds would result in a negative unassigned balance.

Question 7

Resources allocated with inventory would be classified within the fund balance as:

Answer 7

Non-spendable. Inventory is considered non-spendable.

Question 8

Fund balances that are constrained by the government’s intent to be used for a specific purpose but are not committed or restricted are:

Answer 8

Assigned funds.

Question 9

Negative fund balances should not be displayed for:

Answer 9

restricted, committed, or assigned classifications. Only unassigned classification would be negative.

Question 10

GRaSPP SE PAPI:

Answer 10

G = General Fund, R = Special Revenue, and S = Debt Service, P = Capital Projects, P = Private Purpose

S = Internal Service, E = Enterprise

P = Pension, A = Agency, P = Permanent, I = Investment Trust

Question 11

Permanent funds are used to report resources that are :

Answer 11

Restricted to the extent that income (not principal) will be used for the purposes of supporting the reporting government’s programs for the benefit of the public.

Question 12

This objective of financial reporting by state and local governments is paramount:

Answer 12

Accountability. Reliability is secondary to accountability.

Question 13

Derived (non-exchange) tax revenues represent taxes imposed on or derived from:

Answer 13

Non-exchange transactions such as commercial sales (sales taxes), e.g a 2% imposed tax on hotel charges.

Question 14

Imposed non-exchange revenues represent taxes imposed on:

Answer 14

Non-exchange transactions such as fines or wealth (e.g property taxes).

Question 15

A balanced budget demonstrates:

Answer 15

interperiod equity.

Question 16

Budget comparisons must be presented in the:

Answer 16

Same basis of accounting as the adopted budget.

Question 17

Wages and Salary is an example of:

Answer 17

An object classification. Expenditures of governmental resources should be classified by object classes, according to the type of items purchased service obtained.

Question 18

Expenditures extending over more than one period may be:

Answer 18

Allocated between or among accounting periods. Non-spendable inventory or prepaid may be recorded using either the consumption or the purchase method.

Question 19

To record appropriations:

Answer 19

Credit Appropriations Control.

Question 20

Receiving state appropriations represents:

Answer 20

A non-exchange transaction and will be treated as nonoperating revenue. Operating grants and subsidies represent non-exchange transactions that are not derived from operations. They are treated as nonoperating revenues.

Question 21

The entry to initially recording the budget is:

Answer 21

Dr: Estimated Revenue
Cr. Appropriations Control
Cr. Budgetary Control

Question 22

The debt service fund (GRaSPP) accounts for:

Answer 22

The accumulation of resources for, and the payment of, general long term debt principal and interest.

Question 23

The special revenue fund (GRaSPP) accounts for:

Answer 23

The proceeds of a specific revenue source that are legally restricted to expenditure for specific purposes.

Question 24

When special assessment debt is to be repaid from general resources of the government:

Answer 24

The debt should be recorded as a general long term liability in the government activities column of the government wide statement of net position as is any debt that is to be repaid from general resources.

Question 25

Permanent funds are used to account for:

Answer 25

Principal that is restricted and may not be expended. Earning may be used for purposes that benefits the public/supports the government.