FAR 13

Question 1

What type of balance do Government funds use in their equity section in the individual fund F/S?

Answer 1

-Fund Balance in Equity Section

Question 2

What type of fund balance is show for Proprietary funds in the Equity section of the F/S?

Answer 2

Uses Net position

Question 3

What is the J/E for purchase orders for supplies in a governmental fund?

Answer 3

Dr Encumbrances
Cr Budgetary Control

Question 4

What type of Gov’t fund will most likely have non-spendable inventory of supplies?

Answer 4

General fund, since at the end of the period will have supplies not used

Question 5

Committed fund balances

Answer 5

The most restrictive classification of Gov’t funds

Internally limited by Gov’t’s highest lvl of decision-making authority

Question 6

What is the J/E for Property taxes receivable paid in advance for which they are levied?

Answer 6

Dr Property Taxes Receivable XXX
Cr Deferred inflows of resources XXX

Revenues are recognized when measurable and available

Question 7

What is the J/E for Property taxes collected in Advance of the period that they are actually due?

Answer 7

Dr Cash
Cr Deferred inflows of resources

Question 8

What is a reciprocal interfund activity?

Answer 8

Interfund loans & interfund services provided and used

Internal Service Billings

Question 9

Non-Reciprocal Transfers

Answer 9

Interfund transfers - Routine transfers

Classified as Other Financing Sources in the statement of Revenues, Expenditures and Changes in Fund balance

Question 10

What is the Equation to solve for Ending or available appropriations?

Answer 10

B - Budget: Appropriations XXX

A- Activity: Expenditures (XXX)

E - Encumbrances (XXX)

Available Appropriations: XXX

Question 11

Appropriations

Answer 11

Approved spending for the budgetary account, estimated expenditures

Question 12

Encumbrances

Answer 12

Committed or assigned amounts in the budgetary control account for purchase orders

Question 13

Expenditures - Vouchers payable

Answer 13

Actual incurring of bills, recorded as a Cr to cash or Cr to vouchers payable

Vouchers payable - represent expenditures not paid off and included in total expenditures amount

Question 14

What is the J/E for a Government budget when purchase orders are issued/Approved?

Answer 14

Dr Encumbrances (Estimated) 5000
Cr Budgetary Control 5000

Question 15

What is the J/E when supplies and Invoice are actually received?

Answer 15

Dr Budgetary Control 5,000
Cr Encumbrances (Estimated) 5000

Dr Expenditures (Actual) 4,950
Cr Vouchers Payable. 4,950

Question 16

What is the budgetary equation to solve for Total Fund balance?

What is the budgetary equation to solve for unassigned fund balance?

Answer 16

Total Assets - Total Liabilities = Total Fund Balance

Total Fund Balance - Any fund balance constrained (open purchase orders) = Unassigned Fund Balance

Question 17

What is an example of a Quasi-external transaction between funds? Does it give rise to recording of an expenditure? What is the J/E?

Answer 17

ex: Routine Service charges for utilities - could have been purchased from a 3rd party and not from the city’s electrical utility enterprise fund

Dr Expenditures
Cr Due to Electric Utility Enterprise Fund

Question 18

For Lease questions, pay attention to PMT date and solving for the ending balance of the lease liability

Answer 18

For example multiply PMT’s by implicit rate PV and than subtract out any payments made to solve for the Ending Lease Liability amount

Question 19

What is not true regarding B/S accounts using the re-measurement (temporal) or translation (current rate) method?

Answer 19

Incorrect: All B/S accounts items are translated using the current year end rate un der translation method.

Accounts that do not use current year-end rates: C/S and APIC are translated using the historical exchange rate.

R/E is a roll forward calculation

Question 20

SLOW DOWN WHEN READING QUESTIONS

Question 21

YOU NEVER CALCULATE THE PROPROTION OF A LOSS ONLY FOR GAIN IN TRANSACTIONS THAT LACK COMMERCIAL SUBSTANCE

Question 22

If Inventory is sold at cost which ratio decreases?

Answer 22

Net Profit Margin

Since Sales increases with no effect on Net Income since inventory was sold for the amount it was bought at

Question 23

When a stock option plans grant date and exercise date are different, when should the stock options outstanding account be reduced?

When are stock options increased?

Answer 23

Reduced: At the exercise Date

Increased: Grant Date

Question 24

Which fund Governmental, fiduciary or Proprietary fund reports transfers of other funds as an “Other Financing Use?”

Answer 24

Government funds: General Fund

Question 25

How do proprietary funds record transfers to other funds?

Answer 25

As Non-Operating Expenses

Question 26

Do Fiduciary funds reports transfers to other funds?

Answer 26

No, transactions with the Gov’t and fiduciary fund is accounted by a trustee or a 3rd party outside the Gov’t.

Question 27

What is the purpose of a Debt Service Fund? (General Gov’t fund)

Answer 27

Accumulates resources and payments for General L/T liability principal and interest

Special tax restricted for paying back L/T debt of a county’s capital project

Question 28

What is the purpose of an Enterprise Fund?

Answer 28

Proprietary fund:

Provide goods or services to the general public

similar to a for profit enterprise

Question 29

What is the function of a Internal Service fund?

Answer 29

Provides goods and services to other Gov’t departments on a cost reimbursement basis

Question 30

What is the function of a Capital Projects fund?

Answer 30

Account for resources to be used for buying or constructing major Capital Facilities