FAR 5

Question 1

FAR 5

What is the main use of fund accounting by a governmental organization?

Answer 1

Financial Control and Legal Restrictions.

Question 2

FAR 5

In complying with GASB #34, a government will present separate fund financial statements for its governmental and proprietary funds. The purpose of this presentation is to?

Answer 2

Report additional and detailed information about the primary government.

Question 3

FAR 5

What fund most appropriately uses the current financial resources measurement focus and modified accrual basis of accounting in their fund financial statements?

Answer 3

Governmental funds.

Question 4

FAR 5

The economic resources measurement focus and accrual basis of accounting would be used for?

Answer 4

Proprietary and Fiduciary funds.

Question 5

FAR 5

What characteristic is most difficult to report for a governmental entity?

Answer 5

Relevance.

Question 6

FAR 5

The measurement focus of governmental-type funds is on the determination of?

Answer 6

Current financial resources and financial position.

Question 7

FAR 5

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

Answer 7

Segregated for the purpose of carrying on specific activities or attaining certain objectives.

Question 8

FAR 5

The governmental fund measurement focus is on the determination of?

Answer 8

Financial position and current financial resources.

Question 9

FAR 5

The orientation of accounting and reporting for all proprietary funds of governmental units is?

Answer 9

Income determination.

Question 10

FAR 5

The orientation of accounting and reporting for all governmental funds of governmental units is?

Answer 10

Flow of funds.

Question 11

FAR 5

What is an example of a governmental unit that uses the modified accrual basis of accounting?

Answer 11

Special revenue funds.

Question 12

FAR 5

What are the three types of fund?

Answer 12

Governmental, Proprietary and Fiduciary

Question 13

FAR 5

What makes up the Governmental Funds? (Modified Accrual)

Answer 13

General, Special Revenue, Debt Service, Capital Projects, Permanent

Question 14

FAR 5

What makes up the Proprietary Funds? (Accrual)

Answer 14

Internal Service, Enterprise

Question 15

FAR 5

What makes up the Fiduciary Funds? (Accrual)

Answer 15

Pension, Agency, Private Purpose, Investment Trust

Question 16

FAR 5

Government-wide financial statements are presented on the what basis of accounting?

Answer 16

Accrual basis.

Question 17

FAR 5

General fund resources that are limited as to use by constraints imposed by law through constitutional or enabling legislation would be classified within fund balance as?

Answer 17

Restricted.

Question 18

FAR 5

What does it mean if a fund balance is committed?

Answer 18

They 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 19

FAR 5

What does it mean if a fund balance is assigned?

Answer 19

Assigned means that the balances are constrained by government’s intent to be used for specific purpose, but neither restricted or committed.

Question 20

FAR 5

The only fund that should show a positive amount in its unassigned fund balance classification would be the?

Answer 20

General fund. This classification represents fund balance that has not been assigned to other funds and has not been restricted, committed, or assigned to specific purpose within the general fund.

Question 21

FAR 5

What does it mean to be non-spendable?

Answer 21

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

Question 22

FAR 5

If the gov’t over spends in the special revenue fund, the deficit would be displayed as?

Answer 22

Negative fund balance-unassigned

Question 23

FAR 5

Debt service fund resources that are subject to the terms and conditions of a bond indenture would be classified within fund balance as?

Answer 23

Restricted.

Question 24

FAR 5

If a city received a gift, the principal of which is to be invested in perpetuity with the income to be used to support the local library, which fund should this gift be recorded?

Answer 24

The permanent fund.

Question 25

FAR 5

What are permanent funds used for?

Answer 25

To report resources that are legally restricted to the extent income, and not principal, may be used for purposes supporting the reporting government’s programs for the benefit of the public.

Question 26

FAR 5

What are private purposes trust funds used for?

Answer 26

They don not meet definition of pension, agency or investment trust fund and are intended for the benefit of specific individuals, private organizations or other governments.

Question 27

FAR 5

What are special revenue funds used for?

Answer 27

Account for revenues from specific taxes or other earmarked sources that (by law) are restricted or committed to finance particular activities of a government.

Question 28

FAR 5

What is the paramount objective of financial reporting by state and local govt’s?

Answer 28

Accountability.

Question 29

FAR 5

What is the measurement focus and basis of accounting for government wide financial statements?

Answer 29

Economic Resources and Accrual Accounting.

Question 30

FAR 5

The measurement focus of governmental fund accounting is on ?

Answer 30

Current Financial Resources.