F8 Practice

Question 1

following characteristics of service efforts and accomplishments is the most difficult to report for a governmental entity?

Answer 1

a. Consistency.
b. Timeliness.
c. Relevance.
d. Comparability.
Relevance means the information must bear a logical relationship with the needs for its purpose. It must also be reliable.

Question 2

governmental fund and Proprietary and fiduciary fund focus and measurement

Answer 2

G- current flow of financial resources

P AND F- income measurement / economic resources

Question 3

how to recognized revenue under modified accrual accounting and accrual accounting ?

Answer 3

The general fund uses the modified accrual basis of accounting which recognizes revenues in the accounting period in which they become available and measurable. The enterprise fund uses the full accrual basis of accounting, which recognizes revenues in the accounting period in which they are earned.

Question 4

restricted fund balance

Answer 4

. Restricted fund balances represent resources whose use has been limited by external sources such as creditors (e.g., debt covenants), contributors, other governments, laws, constitutional provisions or enabling legislation.

Question 5

non-spendable fund balance

Answer 5

Non-spendable fund balances represent resources in a form that cannot be spent (e.g., inventories or prepaid expenditures) or are legally or contractually required to remain whole (e.g., permanent fund principal

Question 6

committed fund balance

Answer 6

Committed fund balances represent resources that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision-making authority.

Question 7

assigned fund balance

Answer 7

Assigned fund balances are constrained by the government’s intent to be used for specific purposes, but are neither restricted nor committed.

Question 8

special revenue fund –xxx and xxx

permanent fund – xxx only

Answer 8

principal and interest

Question 9

government-wide accounting use what measurement ?

Answer 9

accrual accounting and economic resources, like commercial enterprise

Question 10

Activity ‘s revenue type

Answer 10

1. derived revenue (EXCHANGE )
2. imposed non-exchange revenue
3. government mandated non-exchange transaction
4. voluntary non-exchange transaction

Question 11

“salaries and wages” is an example of which type of classification?

Answer 11

object

Question 12

Expenditures of a governmental unit for insurance extending over more than one accounting period:

Answer 12

1. Expenditures extending over more than one period may be allocated between or among accounting periods. Non spendable current resources such as inventory or prepaid may be recorded using either the consumption or the purchases method.
2. Current assets of this character serve as the basis for classification of fund balance as Non Spendable.

Question 13

payment in general fund, how to treat payment ?

Answer 13

Governmental funds use the current financial resources measurement focus. As a result, the governmental fund statement of revenues, expenditures and changes in fund balance will emphasize the financial flow of resources and recognize all of the disbursements

Question 14

transfer fund / transfer in other fund

Answer 14

(estimated)other financing sources

Question 15

In order to qualify for hedge accounting treatment, a derivative must be

Answer 15

Effective

Question 16

The portion of special assessment debt maturing in 5 years, to be repaid from general resources of the government, should be reported in

Answer 16

government-wide financial statement of net position

Question 17

what amount should City capitalize relative to the government ?

Answer 17

The property retained by the government becomes a general capital asset in the governmental activities column of the government-wide statement of net position and is capitalized at the lower of cost ($20,000) or market value ($60,000).