Fund Accounting Concepts & Application (Government)

Question 1

Revenues control account is increased when?

Answer 1

Property Taxes are recorded

DR Cash/Receivables
CR Revenues

Question 2

What fund could be used to account for the Income from a permanent fund?

Answer 2

Special Revenue Fund

Question 3

What are the classification units used in Government accounting?

Answer 3

(1) fund, (2) function or program, (3) organizational unit (e.g., department), (4) activity, (5) character, and (6) object.

Question 4

What classification does Salaries and Wages fall under?

Answer 4

Object

Question 5

What is the Journal entry if a county levied taxes of 850 and 75 was estimated to be uncollectible?

Answer 5

DR Property Taxes Receivable 850
CR Allowance for Uncollectible 75
CR Property Tax Revenue 775

Revenue is recognized Net of Estimated Uncollectible

Measurement Focus does not consider Bad debt expense due to expenditures

Question 6

The intent of balanced budget laws is to achieve?

Answer 6

Interperiod Equity

Question 7

What lead to the use of Fund Accounting by governmental entity?

Answer 7

Financial Control & Legal Restriction

Question 8

What does not effect internal service fund’s net income?

Answer 8

Temporary Transfer

Question 9

How many funds is does governmental accounting require?

Answer 9

One - General Fund

Other can be added to meet Budgetary and Legal Requirements

Question 10

What is a Fund?

Answer 10

Self Balancing set of accounts?

Question 11

The acquisition of a capital asset by the General Fund is recorded as

Answer 11

an Expenditure

Capital Assets or Depreciation is never recorded in a Governmental Fund

Question 12

debt issuance costs and costs relate to services provided in the current period should be expensed in the current period. What is the exception?

Answer 12

Prepaid Insurance

Question 13

In which fund can Escheat Property be held? Under what condition?

Answer 13

Private Purpose Trust fund - When principal and income are reported.

Agency Fund - Temporary held for the benefit of another agency, Not required to be reported elsewhere. (Government is NOT obligated in any manner)

Question 14

When a capital lease represents the acquisition or construction of a general fixed asset, the acquisition or construction of the general fixed asset should be reflected as

Answer 14

Expenditure AND an Other Financing Source

Question 15

For renovation of a park the fund were received from
Transfers from general fund 200
Grants from State Government 800
Proceeds from Bond Issue 1000

How much revenue and other financing source should be recorded?

Answer 15

Revenue 800

Other Financing Source 1200

Question 16

What are the Fund Balance Classification?

Answer 16

Non Spendable
Restricted
Committed
Assigned
Unassigned