First Exam Simulator Wrong Answers Flashcards
When art of $2 million is donated to the city and will be 1) held for public exhibition, 2) protected, cared for and kept unencumbered, and 3) not be sold except for purposes of acquiring different items for the collection. Because the art will be displayed in general government buildings, the governmental activities would show…
Revenue from donations of $2 million and an expense of $2 million
The payment of principal on long term debt out of the general fund is considered…
An expenditure
When prices are rising, a LIFO inventory method will produce a…
2) why?
Lower ending inventory than other inventory methods
Because cost of ending inventory consists of older lower cost
Items
Debt accounted for in a pension trust or a proprietary fund is…
Serviced within those funds and not connected to general long
Term debt
Goods that have been billed FOB shipping point, but are not shipped until the next year, should be…
Included in the company’s ending inventory
What amount of the lessor’s capital lease payments should be included in cash outflows from financing activities?
Principal portion of the monthly payments only (not interest portion)
Other financing sources and uses is not an appropriate category for…
Proprietary funds
In a troubled restructuring agreement, the debtor has its $150,000 in notes cancelled in exchange for given up land with a carrying amount of $75,000 and a fair value on $100,000. What amount should the debtor report as a gain?
$50,000 = carrying amount of note - fair value of land
Agency fund does not have a…
Fund net position
Agency fund acts as a…
Custodian of resources belonging to other entities
It is important to disclose changes in the government’s custodial responsibilities by showing…
Increases or decreases in the asset and liabilities
In the agency fund’s accounting equation…
Assets and liabilities equal each other
In combining financial statements in comprehensive financial reporting, agency funds financial statements would include…
A combining statement of changes in assets and liabilities- agency
Funds
When accruing interest expense on bonds payable, what rate should be used?
Coupon rate on the face of the bonds
GASB statement 1:
Interperiod equity
Financial reporting should provide info to determine whether
Current year revenues were sufficient to pay for current year services
GASB statement 1:
Budgeting and fiscal compliance, financial reporting should demonstrate whether…
Resources were obtained and used in accordance with the entity’s
Legally adopted budget
It should demonstrate compliance with other finance related
Legal or contractual requirements
GASB statement 1:
Service efforts costs and accomplishments, financial reporting should provide information to…
Assist users in assessing the service efforts, costs and accomplishments of the governmental entity
Disclosure is required by public ally held companies to disclose if 10%
or more of total revenues come from…2
1 sales to single customers
2 from export sales
Not for profits are allowed to use the fair value at the date of promise to give…
Securities is initially recognized even if contribution will not take
place for several years
When not for profits recognize promises to give they create…
2) what does the non profit do instead?
An allowance for uncollectible pledges, but do not recognize
Bad debt expense as business does
2) instead the nonprofit reduces the revenue by the uncollectible
Amount
Non profits should not record an expense for estimated uncollectible promises when…
Promises to give are initially recognized
For current refundings of debt reported on government wide statements, GASB sates that the difference between…
Reacquisition price of old debt and net carrying value of new debt
Be amortized over shorter of remaining life of old debt or life of
New debt
For current refundings of debt reported on government wide statements, GASB sates that debt issue costs should…
Be deferred
Information which becomes known after the balance sheet date but before the financial statements are issued should be…
Disclosed, but not accrued until the following year
Governments with significant budgetary perspective differences that preclude providing budgetary comparisons for the general fund and each major specific revenue fund are required to present…
Budgetary comparison schedules as required supplementary
Info
Budgetary comparison statements may be included in…
Basic financial statements or in the required supplementary info
Budgetary comparison statements are not listed among items to be included in…
Management’s discussion and analysis (MD&A)
To calculate the carrying amount of bonds when they are issued at a discount, the discount amortization is…
Added to the previous period’s carrying amount
To calculate cash for December 31st, should a check written in January be added back to the bank statement balance or the checkbook balance to record the company’s cash?
Check book balance
Average exposure percentage in the 1st year, over a 2 year contract where revenue is incurred evenly is…
50%
An equipment service contract company’s revenues are…
Repairs on service contracts
4 accounting bases that may be used to prepare financial statements in conformity with a comprehensive basis of accounting other than GAAP
1 governmental type provisions
2 income tax returns
3 cash receipts and disbursements basis
4 other criteria having support such as price level basis
