FAR 10

Question 1

A budgeted excess of revenues of appropriations should be?

Answer 1

Credited to budgetary control.
Dr. Estimated Revenues
Cr. Appropriations
Cr. Budgetary Control (Excess)

Question 2

The estimated revenues control account of a governmental unit is debited?

Answer 2

The budget is recorded.
Dr. Estimated Revenue Control
Cr. Budgetary Control
Estimated revenue control account is part of the budget.

Question 3

The encumbrance account of a governmental unit is debited when?

Answer 3

A purchase order is approved.
Dr. Expenditures
Cr. Vouchers Payable
Dr. Budgetary Control
Cr. Encumbrance

Question 4

If a city legally adopts its annual general fund budget on the modified accrual basis of accounting, its estimated revenues should be?

Answer 4

Reported on the modified accrual basis of accounting in the general fund budgetary comparison schedule.

Question 5

What should be recorded in contribution revenue in the statement of activities?

Answer 5

Restricted by the donor to be used for meals for the children and the payment above the FMV of the subscriptions.

Question 6

What is required for presentation within a government’s required supplementary information?

Answer 6

Actual financial performance presented in a manner consistent with the budget.
Final Amended budget.
Originally adopted budget.

Question 7

What is the basic criterion used to determine the reporting entity for a governmental unit?

Answer 7

Financial accountability.

Question 8

Property taxes and fines represent which of the following classes of non exchange transactions for governmental units?

Answer 8

Imposed non-exchange revenues.

Question 9

GASB C60.107 indicates that a government’s compensated absences liability should normally

Answer 9

be calculated based on the pay or salary rates in effect AT THE BALANCE SHEET DATE.

Question 10

Reporting of general infrastructure assets by all public institutions that report as special-purpose governments either engaged only in governmental activities or engaged in both governmental and business type activities is:

Answer 10

Required using the full governmental model.

Question 11

What are some types of unrestricted revenues?

Answer 11

Cash contribution used at the board of directors discretion.

Contributed legal services which someone would have otherwise purchased.

Question 12

What isa type of temporaily resricted revenue?

Answer 12

A promise to contribute a specified amount to an organization should be recorded as income immediately upon receipt of the promise. If it is not going to be collected until the following year, it should be considered TEMPORARILY RESTRICTED at NRV.

Question 13

A statement of cash flows should be presented for what type of fund only?

Answer 13

Proprietary Fund using the direct method of presenting cash flows from operating activities.

Question 14

Monies held in trust for the benefit of parties who are not a part of government are accounted for in which type of fund?

Answer 14

Private-Purpose trust funds.

Question 15

Resources held for the benefit of others are reported in the?

Answer 15

Fiduciary funds.

Question 16

Unless required to be reported elsewhere, how should escheat property, held for a short period of time for another governmental entity, be reported?

Answer 16

As an assets in an AGENCY FUND, offset by a liability.

Question 17

When should a private purpose trust fund be used?

Answer 17

When principal and income are reported.

Question 18

In a statement of activities of the People’s Environmental Protection Association, a voluntary community organization, depreciation expense should:

Answer 18

Be included as an element of expense.

Question 19

When should you classify income as unrestricted revenue?

Answer 19

When resources are under control of the governing board and not specifically restricted by an outside donor.

Question 20

What not for profit entity is required to prepare a statement of functional expense showing natural expense classifications?

Answer 20

A shelter for the homeless.

Question 21

In the government-wide financial statements, what is the correct revenue classification of fines and forfeitures?

Answer 21

Charges for services.

Question 22

How do you calculate “net investment in capital assets”?

Answer 22

The total of capital assets less depreciation and outstanding mortgages or bonds reduced by any significant unspent proceeds.

Question 23

What should the gov’t disclose concerning reverse repurchase and fixed coupon reverse repurchase agreements?

Answer 23

Underlying securities owned should be reported as “investments.” RELATED ASSETS AND LIABILITIES SHOULD NOT BE NETTED.

Question 24

A city received a donation of a valuable painting. The city planned to add the painting to its collection and display it. They have a policy that if such donated art work were sold, the proceeds would be used to acquire other items for its collections. How do you record this?

Answer 24

May be capitalized, but it is not required, and depreciation is not required.

Question 25

How do you determine if the fund is Major?

Answer 25

Total assets, liabilities, revenues, or expenditures(expenses) account for at least 10% of that item for all funds in the same category, governmental or enterprise, added together, and
Total assets, liabilities, revenues, or expenditures(expenses) account for 5% of that item for all governmental and enterprise funds added together.

Question 26

Encumbrances would appear in?

Answer 26

Governmental funds.

Question 27

What activities should be excluded when governmental fund financial statements are converted to gov’t wide financial statements?

Answer 27

Fiduciary activities. The fiduciary activities are not considered part of the operations of the gov’t itself and would not be included in the government-wide financial reports.

Question 28

Unconditional contributions, whether promised or received as cash, are recognized as revenue in the period received.

Answer 28

In the period received at fair value.

Question 29

How do you record proceeds of debt issuance?

Answer 29

Either as a liability, if short term debt, or as proceeds of bonds (an other financing source) if long term debt, not as revenues.

Question 30

What type of transaction is an expenditure of a governmental unit’s general fund?

Answer 30

Routine employer contributions from the general fund to a pension trust fund.