E-FAR-Governmental

Question 1

The GASB Concepts Statements indicate that service efforts and accomplishments reporting

Answer 1

is necessary but not required.

Question 2

GASB Concepts Statements indicate that the objective of SEA (service efforts and accomplishments reporting )reporting is to

Answer 2

provide more complete information about a governmental entity’s performance than can be provided in traditional financial statements and schedules.

Question 3

Governmental fund revenues and expenditures should be recognized on:

Answer 3

the modified accrual basis.

Question 4

Governmental funds include:

Answer 4

1 the general fund, 
2 special revenue funds, 
3 capital projects funds, 
4 debt service funds, and 
5permanent funds.

Question 5

Funds recognized on the accrual basis:

Answer 5

1 Proprietary funds
2 Fiduciary fund
3 Pension trust funds

Question 6

Proprietary fund revenues and expenses should be recognized on the accrual basis. Proprietary funds include

Answer 6

1 enterprise funds and

2 internal service funds

Question 7

Fiduciary fund additions and deductions should be recognized on

Answer 7

the accrual basis.

Question 8

Pension trust funds should be accounted for on

Answer 8

the accrual basis.

Question 9

The governmental fund primary measurement focus is on

Answer 9

determination of current financial position (sources, uses, and balances of financial resources), rather than upon income determination.

Question 10

Assuming that encumbrance accounting is utilized by the city, the journal entry to record the issuance of purchase orders and contracts is

Answer 10

Dr Encumbrances Control
Cr Budgetary Fund Balance—Reserved for Encumbrances (for the amount of the purchase order or estimated cost of the contracts.)

Question 11

In the government-wide financial statement, the statement of net position, deferred outflows of resources are presented

Answer 11

In a separate section following assets.

Question 12

A sale of future revenue should be recorded as

Answer 12

deferred inflow of resources and recognized over the life of the agreement.

Question 13

statistical section of the Comprehensive Annual Financial Report (CAFR) of a governmental unit is

Answer 13

not part of the basic financial statements. GASB 34 (as amended) indicates that the basic financial statements include only the government-wide statements, the fund statements, and the notes to the financial statements.

Question 14

GASB 68. What is the amount of liability that should be presented on the state government’s statement of net position related to the plan?

Answer 14

The portion of the actuarial present value of projected benefit payments attributable to past periods of employee service minus the pension plan’s fiduciary net position.

Question 15

Required Supplementary Information for the financial statements of a defined-benefit pension plan under GASB 67:

Answer 15

A ten-year schedule of changes in pension liability.
B. A ten-year schedule of the amounts of total pension liability, fiduciary net position, net pension liability, the covered-employee payroll, and selected ratios.
C. A ten-year schedule of the actuarial computed required contribution, the required contribution, the actual contribution to the plan, and selected ratios.

Question 16

GASB 33 defines nonexchange transactions as transactions

Answer 16

“in which a government gives (or receives) value without directly receiving (or giving) equal value in exchange.”

Question 17

Exchange transactions are transactions

Answer 17

“in which each party receives and gives up essentially equal values.”

Question 18

In accordance with GASB 33, Accounting and Reporting for Nonexchange Transactions, imposed nonexchange transactions are

Answer 18

revenues that result from taxes and other assessments imposed by governments that are NOT derived from underlying transactions. Examples include property taxes, special assessments, and fines and forfeits.

Question 19

Derived tax revenues result from taxes assessed by government on exchange transactions such as

Answer 19

Income taxes, sales taxes, and motor fuel taxes are examples of derived tax revenues

Question 20

According to GASB 52, land and other real estate held by an endowment as an investment should be reported at

Answer 20

fair value at each reporting date.

Question 21

A deferred inflow is one of the five elements of the statement of financial position and can only be recognized when

Answer 21

identified by the GASB in authoritative pronouncements

Question 22

GASB Concepts Statements are not GAAP T/F

Answer 22

True

Question 23

GASB Concepts Statement No. 1 lists the following four financial reporting implications associated with the legally adopted annual budget:

Answer 23

(1) expression of public policy, (2) expression of financial intent, (3) form of control, and (4) it may provide a basis for evaluating performance (if the government established service efforts and accomplishment goals as part of its budget process).

Question 24

GASB Concept Statement No. 1 defines two paramount objectives for financial reporting in government

Answer 24

: (1) Accountability and (2) interperiod equity.

Question 25

Concept Statement No. 1 describes six characteristics of effective financial reporting:

Answer 25

(1) understandability,
(2) reliability,
(3) relevance,
(4) timeliness,
(5) consistency, and
(6) comparability (TRUCCR).

Question 26

GASB Concepts Statement No. 4 identifies the following five elements of the Statement of Financial Position:

Answer 26

(1) assets,
(2) liabilities,
(3) deferred inflows of resources,
(4) deferred outflows of resources, and
(5) net position.

Question 27

Taxes specifically designated to pay off general obligation long-term debt are accounted for in

Answer 27

the Debt Service Fund

Question 28

Funds are used to

Answer 28

provide management accountability and control

Question 29

An enterprise fund is used ……

Enterprise funds are also referred to as “business type” funds and use full accrual accounting.

Answer 29

when services are provided primarily to the public for a charge.Since enterprise funds use accrual accounting, it will provide the determination of net income and other control and accountability that management desires.

Question 30

A fund is both a fiscal and an accounting entity.

Answer 30

A fund is “fiscal” because it has assets, liabilities, revenue, expenditure or expense, and fund balance or other equity accounts. A fund is “accounting” because it has its own ledgers and contains a self-balancing set of accounts. A fund is not a separate legal entity.

Question 31

Fiduciary funds include the following 4 types of funds:

Answer 31

Recall the acronym “PIPPA” for fiduciary funds.
Pension trust funds,
Investment trust funds,
Private- P urpose trust funds, and A gency funds.

Question 32

The focus of modified accrual basis accounting is on

Answer 32

the flow of financial resources

Question 33

Governmental entities record property tax revenue when

Answer 33

the bills are sent out

Question 34

At the beginning of the fiscal year, outstanding encumbrances from the prior year are recognized by

Answer 34

debiting Encumbrances of Prior Year.

Question 35

When previously encumbered goods are received, normally the Budgetary Fund Balance account is

Answer 35

debited

Question 36

The unexpended portion of bonds for capital improvements is excluded from

Answer 36

the net investment in capital assets.

Question 37

A positive unassigned fund balance can appear only in

Answer 37

the General Fund

Question 38

The Schedule of Direct and Overlapping Debt is presented in

Answer 38

the Statistical Section

Question 39

Government-wide statements distinguish “governmental activities” from “business-type activities,” but do not identify funds T/F

Answer 39

True

Question 40

An “other entity” is a component unit if it is

Answer 40

fiscally dependent on the primary government, its board is appointed by the primary government, and either the primary government can impose its will on the entity, or significant financial burdens or benefits can be shifted from one entity to the other, or the primary government’s financial statements would be misleading without the inclusion of the other entity

Question 41

If the component unit is, in substance, a part of the primary government, then the balances for its funds

Answer 41

should be included with similar funds in the primary government

Question 42

Permanent Funds account for

Answer 42

the principal and earnings of endowments that must be used for the benefit of governmental programs

Question 43

Restricted assets are separately reported on

Answer 43

an Enterprise Fund statement of net position

Question 44

Both employee and employer contributions to the pension plan are reported as

Answer 44

Additions in the Pension Trust Fund

Question 45

An Investment Trust Fund must be used whenever

Answer 45

external entities contribute to a governmental entity’s Investment Pool

Question 46

Okanoge County is responsible for collecting property taxes for the taxing jurisdictions within its boundaries and uses an Agency Fund to record transactions related to this process. When the taxes are levied,

Answer 46

the County records a receivable and an offsetting liability in the Tax Agency Fund

Question 47

Residual Equity Transfers are

Answer 47

non-recurring, relatively infrequent, transfers of monies between funds

Question 48

Quasi-External (Interfund Sales and Purchase) Transactions give rise to a

Answer 48

revenue entry in the fund supplying the services and an expenditure or expense in the fund using the services

Question 49

Regular, routine, or recurring transfers of resources between funds to subsidize current activities are classified as

Answer 49

Operating Transfers

Question 50

Governmental funds incur liabilities that don’t require the use of current resources and therefore

Answer 50

are not reported in the Fund-based statements until the period in which they are expected to be paid

Question 51

All eligibility requirements or government mandated and voluntary nonexchange transactions must have been met before

Answer 51

both assets and revenue can be recognized

Question 52

If revenue cannot be recognized under modified accrual basis as well as under GASB #33, then

Answer 52

the transaction is recognized as deferred inflow or unearned revenues depending on the circumstances

Question 53

Government-mandated nonexchange transactions are

Answer 53

intergovernmental transfers of resources including entitlements, shared revenues, and payments in lieu of taxes

Question 54

Derived tax revenues

Answer 54

are taxes resulting from the taxable exchange transactions of individuals and businesses

Question 55

Quoted prices for similar assets or liabilities in an active market is an example of a level

Answer 55

2 input in determining fair value