Government (State and Local Accounting)

Question 1

Government (State and Local Accounting)

Describe reciprocal interfund activities

Answer 1

Reciprocal interfund activities are activities that affect two funds resulting from loans or services provided and received.

Question 2

Government (State and Local Accounting)

Describe non-reciprocal interfund activities

Answer 2

Nonreciprocal interfund activities consist of flows of assets without equivalent flows in return.

Question 3

Government (State and Local Accounting)

What do support services consist of in a nongovernmental not-for-profit entity consist of?

Answer 3

Supporting services expenses are separated into two categories:

1. Management and general
2. Fundraising

Question 4

Government (State and Local Accounting)

What do program expenses in a nongovernmental not-for-profit entity consist of?

Answer 4

The costs incurred by the not-for-profit entity in carrying out its primary mission are considered program expenses.

Question 5

Government (State and Local Accounting)

Define Encumbrances

Answer 5

Encumbrances are commitments related to unperformed (executory) contracts for goods and services. They are recorded in the General and other governmental funds for budgetary control purposes to prevent overspending and demonstrate compliance with legal requirements. An encumbrance does not represent either expenditures or liabilities—it represents the estimated amount of expenditure which will result if unperformed contracts (purchase orders) in process are completed. (GASB 1700.127)

A debit to Encumbrance is offset by a credit to Fund Balance: Reserve for Encumbrance. When the contract is completed (the goods or services have been received), the encumbrance entry is reversed and the expenditure is recorded. The encumbrance entry is also removed at year-end and a portion of the Fund Balance is labeled “committed” or “assigned” unless there is already a portion of the Fund Balance labeled “restricted” regarding the specific commitment represented by the original Encumbrance.

For budgetary control: Unencumbered appropriations = Appropriations - Expenditures - Encumbrances

Question 6

Government (State and Local Accounting)

Define governmental funds

Answer 6

Governmental funds: To finance and account for general government activities, such as police and fire protection, courts, inspection, and general administration. Most of their financial resources are budgeted and appropriated annually for specific general government uses (expenditures) by the legislative body. Governmental funds include the following:

(1) General fund
(2) Special revenue funds
(3) Capital projects funds
(4) Debt service funds
(5) Permanent funds

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Question 7

Government (State and Local Accounting)

True or False

The economic resources measurement focus and the ACCRUAL basis of accounting are used for proprietary funds and fiduciary funds.

Answer 7

True

The economic resources measurement focus and the ACCRUAL basis of accounting are used for proprietary funds and fiduciary funds.

Proprietary funds

• Enterprise Funds
• Internal Service Funds

Fiduciary Fund
-Pension Trust Fund

Question 8

Government (State and Local Accounting)

True or False
The Modified Accrual Basis of Accounting are used for Governmental Funds

Answer 8

True

The current financial resources measurement focus and the modified accrual basis of accounting are used for governmental funds. The general fund, capital projects fund, special revenue fund, and debt service fund are all governmental funds.

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Question 9

Government (State and Local Accounting)

True or False
A contribution to a not-for-profit restricted to long-term purposes like construction shall be reported as a cash flow from financing activities.

Answer 9

True

A contribution to a not-for-profit restricted to long-term purposes like construction shall be reported as a cash flow from financing activities. Cash flows received from investment income restricted by donor stipulation to the same purposes also are reported as financing activities, not as operating activities.

Question 10

Government (State and Local Accounting)

True or False

Property tax revenues are recognized when they become available.

Answer 10

True

Property tax revenues are recognized when they become available.

Question 11

Government (State and Local Accounting)

Define Appropriations

Answer 11

Appropriations is an account created as a restriction of revenues.

Question 12

Government (State and Local Accounting)

Define Encumbrances

Answer 12

Encumbrances, similar to a purchase order, specifically designates funds for a specific future purchase of goods or services.

Question 13

Government (State and Local Accounting)

Define Expenditures

Answer 13

Expenditures can be for capital or revenue items and means an outflow of resources, usually money.

Question 14

Government (State and Local Accounting)

What are the following types of information would be included in total net assets in the statement of financial position for a nongovernmental not-for-profit organization?

Answer 14

Unrestricted net assets, temporarily restricted net assets, and permanently restricted net assets

Question 15

Government (State and Local Accounting)

How is an interfund transfer without requirement for repayment recorded in the financial statements?

Answer 15

An interfund transfer without requirement for repayment must be recorded as other financing uses (or sources to the recipient).

Question 16

Government (State and Local Accounting)

Define program revenues

Answer 16

Programs are financed with program revenues and general revenues. Program revenues are derived directly from the program itself or from parties outside the reporting government’s taxpayers or citizenry, as a whole; they reduce the net cost of the function to be financed from the government’s general revenues. Financing from outside parties that is restricted to a specific program or programs is considered program revenue.

Question 17

Government (State and Local Accounting)

True or False
Capital assets are reported in governmental funds.

Answer 17

False

Capital assets are not reported in governmental funds, but they are reported in proprietary and fiduciary funds as well as in the government-wide or entity-wide financial statements. The term “capital assets” is used in governmental accounting for long-lived assets (generally longer than one year) rather than the terms “property, plant and equipment,” or “fixed assets.”

Question 18

Government (State and Local Accounting)

Describe encumbrance accounting

Answer 18

Encumbrance accounting is a method of budgetary control for governmental funds, including the general fund. Encumbrances do not represent expenditures as they are a memorandum of commitments that will eventually lead to expenditures. They do not represent liabilities as the goods and services are yet to be delivered. Governmental intent to commit resources for specific uses in the future is indicated by an assignment of fund balance.

Question 19

Government (State and Local Accounting)

Which of the following financial categories are used in a nongovernmental not-for-profit entity’s statement of financial position?

Answer 19

Assets, liabilities, and net assets

The statement of financial position is the term for the balance sheet reported by private not-for-profit (NFP) entities. Balance sheets report the balances of permanent accounts on a specific date. Therefore, income, expenses, or changes in net asset categories are not reported. The FASB recommends that the financial statements of an NFP focus on the entity as a whole. The NFP account equation uses the term “net assets” for equity. Its accounting equation is assets equal liabilities plus net assets.

Question 20

Government (State and Local Accounting)

True or False

Fiduciary fund information is included in a government’s entity-wide or government-wide financial statements.

Answer 20

False

Fiduciary fund information is not included in a government’s entity-wide or government-wide financial statements.

Question 21

Government (State and Local Accounting)

True or Fasle
On the modified accrual basis of accounting, revenues should be recognized when the underlying exchange has occurred and the resources are available.

Answer 21

On the modified accrual basis of accounting, revenues should be recognized when the underlying exchange has occurred and the resources are available

Question 22

Government (State and Local Accounting)

Nongovernmental not-for-profit entities (either voluntary health and welfare organizations or other not-for-profit organizations) are required to provide which of the following external financial statements?

Answer 22

Statement of financial position, statement of activities, statement of cash flows
PAC

Question 23

Government (State and Local Accounting)

What is the definition of “Other Financing Sources” in Governmental Accounting?

Answer 23

Other financing sources are used to record operating transfers-in for governmental funds.

Question 24

Government (State and Local Accounting)

What are the four different catagories of non-exchange revenues?

Answer 24

1. Derived tax revenues (Income and sales taxes)
2. imposed nonexchange revenues (Property taxes)
3. government-mandated nonexchange transactions
4. Voluntary nonexchange transactions.

Question 25

Government (State and Local Accounting) True or false Decisions, resolutions, appropriations, etc. by directors, trustees, or managers do result in restrictions on assets.

Answer 25

False Decisions, resolutions, appropriations, etc. by directors, trustees, or managers do not result in restrictions on assets.

Question 26

Government (State and Local Accounting) Discrete vs. Blended Presentation

Answer 26

Blending of financial results is allowed as long as the two agencies are not separate legal entities Discrete presentation is for affiliated entities whose resources are entirely for the benefit of the primary government.

Question 27

Government (State and Local Accounting) Define Special Revenue Funds

Answer 27

In governmental accounting, special revenue funds are governmental funds used to account for the proceeds of specific revenue sources (other than trusts for individuals, private organizations, or other governments or for major capital projects) that are legally restricted to expenditure for specific purposes. Special revenue funds are accounted for on the modified accrual basis. Some special revenue funds are: gasoline excise taxes to be used for street maintenance and hotel/motel bed taxes to be used for industrial development or to be allocated to the arts.

Question 28

Government (State and Local Accounting) Government-wide financial statements should be prepared using the modified accrual basis of accounting.

Answer 28

False The government-wide financial statements consist of a statement of net position and a statement of activities. Those statements should “report information about the overall government without displaying individual funds or fund types” (GASB 2200.110). The statements should be prepared using the accrual basis of accounting and distinguish between governmental and business-type activities. Information about fiduciary funds should not be included in the statements.

Question 29

Government (State and Local Accounting) How is the adoption of the operating budget recorded in governmental accounting?

Answer 29

Adoption of the operating budget is recorded by debiting appropriate budgetary accounts for estimated inflows (“estimated revenues”) and crediting the appropriate budgetary accounts for estimated and approved outflows (“appropriations”). “Budgetary fund balance” is debited or credited for the difference.

Question 30

Government (State and Local Accounting) True or False The acquisition of capital assets with general fund financial resources should be recorded as a capitalization of the assets that has to be depreciated

Answer 30

Government (State and Local Accounting) False The acquisition of capital assets with general fund financial resources should be recorded as a general fund expenditure.

Question 31

Government (State and Local Accounting) What are the basic financial statements for a not-for-profit entity?

Answer 31

The basic financial statements for a NOT-FOR-PROFIT entity are 1. Statement of financial position (like a balance sheet) 2. Statement of activities 3. Statement of cash flows PAC

Question 32

Government (State and Local Accounting) True or False A budgetary comparison statement is required only for the General Fund and for each major special revenue fund

Answer 32

True | A budgetary comparison statement is required only for the General Fund and for each major special revenue fund

Question 33

Government (State and Local Accounting) True or False A statement of functional expenses is required for voluntary health and welfare entities.

Answer 33

True A statement of functional expenses is required for voluntary health and welfare entities.

Question 34

Government (State and Local Accounting) True or False All taxes, even those levied for a specific purpose, are general revenues.

Answer 34

True All taxes, even those levied for a specific purpose, are general revenues.

Question 35

Government (State and Local Accounting) What are the three conditions that make capitalization optional for government-wide reporting?

Answer 35

The three conditions that make capitalization optional for government-wide reporting 1. It is to be held for public exhibition and not gain 2. It is to be protected and preserved 3. A policy is in place requiring proceeds from any potential sale to be used to acquire other collection items.

Question 36

Government (State and Local Accounting) True or False Amounts expected to be collectible during the first 60 days of the following year can be recorded as revenues of the current year if they are legally usable to pay current liabilities of the current year; that is, if they are available.

Answer 36

Amounts expected to be collectible during the first 60 days of the following year can be recorded as revenues of the current year if they are legally usable to pay current liabilities of the current year; that is, if they are available.

Question 37

Government (State and Local Accounting) What are some of the required supplementary information for governments?

Answer 37

Required supplementary information for governments may include the following: a. Budgetary comparison schedules for the general fund and major special revenue funds (if not presented as basic financial statements) b. Information on infrastructure capital assets reported using the modified approach, described in section 2427.02 c. Schedules of funding progress and of employer contributions for pension plans and other postemployment benefit plans (discussed with fiduciary fund financial statements in section 2424.02)

Question 38

Government (State and Local Accounting) True or False Inflows of assets from other funds without a requirement for repayment are considered interfund transfers.

Answer 38

True Inflows of assets from other funds without a requirement for repayment are considered interfund transfers. In proprietary funds (which include internal service funds), transfers should be reported separately after nonoperating revenues and expenses in the statement of revenues, expenses and changes in fund net position. An interfund transfer to/from a governmental fund should be reported as “other financing sources or uses” in the governmental fund.

Question 39

Government (State and Local Accounting) What are the three sections of the Comprehensive Annual Financial Report (CAFR)?

Answer 39

The CAFR (comprehensive annual financial report) of a government includes three sections: Introductory, Financial, and Statistical.

Question 40

Government (State and Local Accounting) What are the three Governmental Accounting Fund Types?

Answer 40

1. Governmental Funds 2. Proprietary Funds 3. Fiduciary Funds

Question 41

Government (State and Local Accounting) Describe Modified Accrual Accounting

Answer 41

- Current Financial Resources focus | - Revenues recognized when available and measureable.

Question 42

Government (State and Local Accounting) Describe the opening budgetary entry

Answer 42

Dr. Estimated Revenues Control Cr. Appropriations Control Dr./ Cr. Budgetary Fund Balance (plug)

Question 43

Government (State and Local Accounting) Describe the closing budgetary entry

Answer 43

Dr. Appropriations Control Dr/ Cr Budgetary Fund Balance (plug) Cr. Estimated Revenues Control

Question 44

Government (State and Local Accounting) What are the two Governmental Fund statements?

Answer 44

1. Balance Sheet | 2. Statement of Revenues, Expenditures, and Changes in Fund Balance.

Question 45

Government (State and Local Accounting) True or False Imposed tax revenues are recorded when budgeted.

Answer 45

True | Imposed tax revenues are recorded when budgeted.

Question 46

Government (State and Local Accounting) True or False Estimated uncollectible property tax revenues offset revenues

Answer 46

False Estimated uncollectible property tax revenues do not offset revenues, so DO NOT NET THEM.

Question 47

Government (State and Local Accounting) What are the three Proprietary Fund Financial Statements?

Answer 47

1. Statement of Net Assets 2. Statement of Revenues, Expenses, and Changes in Net Assets 3. Statement of Cash Flows RAC

Question 48

Government (State and Local Accounting) What are the two main points about Fiduciary Funds?

Answer 48

1. Use Accrual Basis of Accounting | 2. Have an Economic Resource Focus

Question 49

Government (State and Local Accounting) List the different types of Fiduciary Funds

Answer 49

APIP 1. Agency Fund 2. Pension Trust Fund 3. Investment Trust Fund 4. Private Purpose Trust

Question 50

Government (State and Local Accounting) Describe the two Fiduciary Fund Statements

Answer 50

1. Statement of Net Position | 2. Statement of Changes in Net Position

Question 51

Government (State and Local Accounting) For Governmental Wide Financial Statements, list the important points about the Statement of Net Position and Statement of Activities.

Answer 51

1. Prepared on an Accrual Basis 2. Focus is on Economic Measurement 3. Purpose is to provide Operational Accountability

Question 52

Government (State and Local Accounting) List the order of Statement of Net Position

Answer 52

Statement of Net Position (Important!) 1. Assets (Current and Non- Current ordered by liquidity) 2. Deferred OUTFLOWS of Resources 3. Liabilities (Current and Non- Current ordered by liquidity) 4. Deferred INFLOWS of Resources

Question 53

Government (State and Local Accounting) What are the three different assets on the Statement of Net Position?

Answer 53

1. Restricted Net Assets 2. Unrestricted Net Assets 3. Capital Assets net of debt

Question 54

Government (State and Local Accounting) What are the two main activities in the Statement of Net Position?

Answer 54

1. Government Activities | 2. Business Activities

Question 55

Government (State and Local Accounting) True or False Component Units are reported in the Fund Financial Statements.

Answer 55

False Component Units are reported in the Entity- Wide Financial Statements and not the Fund Financial Statements.

Question 56

Government (State and Local Accounting) What are the Financial Statements required for a Defined Benefit pension plan?

Answer 56

1. Statement of Fiduciary Net Position | 2. Statement of changes in Fiduciary Net Position

Question 57

Government (State and Local Accounting) A special purpose unit of government such as a school board is considered a primary government if it meets which of the following criteria?

Answer 57

In order for an entity to be considered a primary government it must meet all three of the following criteria: 1. It has a separately elected governing body. 2. It is legally separate. 3. It is fiscally independent of other state and local governments.

Question 58

Government (State and Local Accounting) What do estimated revenues usually consist of?

Answer 58

1. revenues 2. increases in the general fund resources not matched by decreases in another fund resources 3. expected interfund transfers

Question 59

Government (State and Local Accounting) True or False GASB requires a summary reconciliation between fund financial statements and government-wide financial statements.

Answer 59

True GASB requires a summary reconciliation between fund financial statements and government-wide financial statements.

Question 60

Government (State and Local Accounting) Define non-spendable in a fund balance

Answer 60

The portion of fund balance that reflects equity for amounts that cannot be spent because they are not in spendable form would be termed “nonspendable.”

Question 61

Government (State and Local Accounting) What is the difference between committed fund balance and restricted fund balance?

Answer 61

Committed fund balance would result from an action of the highest level of the government and assigned fund balance would reflect action by a government designee. Restrictions of fund balance would reflect specific purposes externally imposed by creditors, grantors, or enabling legislation.

Question 62

Government (State and Local Accounting) True or False Interfund Transfers occur in both governmental funds and proprietary funds.

Answer 62

False Interfund Transfers occur only in governmental funds.

Question 63

Government (State and Local Accounting) How are deferred revenues accounted for using the modified basis of accounting used for governmental funds?

Answer 63

At the fund level, derived tax revenues are reported using the modified accrual method. Using modified accrual, that portion of the ending receivable which is MEASURABLE BUT NOT AVAILABLE, or accounted for as an allowance, is accounted for as deferred revenue.

Question 64

Government (State and Local Accounting) When are derived tax revenues reported?

Answer 64

Derived tax revenues are reported when the underlying transaction has occurred, and for the modified accrual method of accounting, when the resource is considered to be AVAILABLE.

Question 65

Government (State and Local Accounting) True or False General long-term liabilities should be reported in the governmental activities column in the government-wide statement of net position, not the government-wide statement of activities.

Answer 65

True General long-term liabilities should be reported in the governmental activities column in the government-wide statement of net position, not the government-wide statement of activities.

Question 66

Government (State and Local Accounting) True or False The net assets of proprietary funds are called net position. The net assets of a governmental fund are represented by Fund Balance.

Answer 66

True The net assets of proprietary funds are called NET POSITION. The net assets of a governmental fund are represented by FUND BALANCE.

Question 67

Government (State and Local Accounting) What three sections does the comprehensive annual financial report (CAFR) of a government consist of?

Answer 67

The CAFR (comprehensive annual financial report) of a government includes three sections: Introductory, Financial, and Statistical.

Question 68

Government (State and Local Accounting) True or False Fiduciary fund information is not shown within the government-wide financial statements.

Answer 68

True Fiduciary fund information is not shown within the government-wide financial statements.

Question 69

Government (State and Local Accounting) In order for an entity to be considered a primary government what criteria must it meet?

Answer 69

In order for an entity to be considered a primary government it must meet all three of the following criteria: 1. It has a separately elected governing body. 2. It is legally separate. 3. It is fiscally independent of other state and local governments.

Question 70

Government (State and Local Accounting) True or False The agency fund reports a statement of changes in fiduciary net position.

Answer 70

False The agency fund does not report a statement of changes in fiduciary net position. It consists only of assets and liabilities that are reported on the financial statement date in the statement of fiduciary net position. Therefore the agency fund only includes a combining statement of fiduciary net position—fiduciary funds.

Question 71

Government (State and Local Accounting) True or False General long-term liabilities should be reported in the governmental activities column of the government-wide statement of net position.

Answer 71

True General long-term liabilities should be reported in the governmental activities column of the government-wide statement of net position.

Question 72

Government (State and Local Accounting) True or False The fund financial statements include statements of cash flows for proprietary funds but not for governmental funds.

Answer 72

True The fund financial statements include statements of cash flows for PROPRIETARY funds but not for GOVERNMENTAL funds.

Question 73

Government (State and Local Accounting) Define Non-spendable vs Restricted.

Answer 73

Non-spendable- The portion of fund balance that reflects equity for amounts that cannot be spent because they are not in spendable form Restricted- specific purposes externally imposed by creditors, grantors, or enabling legislation.

Question 74

Government (State and Local Accounting) True or False Only the general fund can have an unassigned fund balance

Answer 74

True Only the general fund can have an unassigned fund balance

Question 75

Government (State and Local Accounting) True or False Depreciation of general capital assets, including infrastructure capital assets, should be reported by function.

Answer 75

True Depreciation of general capital assets, including infrastructure capital assets, should be reported by function.

Question 76

Government (State and Local Accounting) True or False Depreciation is not taken on infrastructure assets accounted for using the modified approach.

Answer 76

True Depreciation is not taken on infrastructure assets accounted for using the modified approach.

Question 77

Government (State and Local Accounting) What are GENERAL capital assets?

Answer 77

General capital assets are capital assets not specifically related to activities reported in proprietary or fiduciary funds. They are reported in the governmental activities column of the government-wide statement of net position.

Question 78

Government (State and Local Accounting) How should leased capital assets should be reported for general government purposes?

Answer 78

Leased capital assets should be reported in government-wide financial statements. If used for general government purposes, the leased asset would be considered a general capital asset.

Question 79

Government (State and Local Accounting) True or False In proprietary funds (which include internal service funds), transfers should be reported separately after nonoperating revenues and expenses in the statement of revenues, expenses and changes in fund net position.

Answer 79

True In proprietary funds (which include internal service funds), transfers should be reported separately after nonoperating revenues and expenses in the statement of revenues, expenses and changes in fund net position.

Question 80

Government (State and Local Accounting) True or False “Other financing sources and uses” is an appropriate category for proprietary funds.

Answer 80

False “Other financing sources and uses” is not an appropriate category for proprietary funds.

Question 81

Government (State and Local Accounting) True or False Governments choosing to allocate indirect expenses should report them in a column separate from the direct expenses to enhance comparability with other governments that do not allocate.

Answer 81

True Governments choosing to allocate indirect expenses should report them in a column separate from the direct expenses to enhance comparability with other governments that do not allocate. Therefore, the direct and indirect expenses should not be combined for reporting purposes.

Question 82

Government (State and Local Accounting) True or False All taxes, even those levied for a specific purpose, are general revenues.

Answer 82

True All taxes, even those levied for a specific purpose, are general revenues.

Question 83

Government (State and Local Accounting) True or False All revenues are general revenues unless they are required to be reported as program revenues.

Answer 83

True All revenues are general revenues unless they are required to be reported as program revenues.

Question 84

Government (State and Local Accounting) List the items in order that are included in the comprehensive annual financial report (CAFR)

Answer 84

1. Management's discussion an analysis (MD&A) 2. Government-wide statement of net position 3. Government-wide statement of activities 4. Balance sheet - governmental funds 5. Reconciliation of the balance sheet of governmental funds to the statement of net assets, governmental activities. 6. Statement of revenues, expenditures, and changes in fund balances- governmental funds. 7. Reconciliation of the statement of revenues, expenditures, and changes in fund balance to the statement of activities, governmental activities. 8. Statement of net position - proprietary funds. 9. Statement of revenues, expenses, and changes in net position- proprietary fund 10. Statement of cash flows. 11. Notes to financial statements 12. Required supplementary information (other than MD&A)

Question 85

Government (State and Local Accounting) True or False Infrastructure Assets are never reported on the government -wide statement of net position.

Answer 85

False Infrastructure assets are required to be reported on the government-wide statement of net position. The use of the modified approach for assets means that these assets are NOT DEPRECIATED if certain conditions are satisfied.

Question 86

Government (State and Local Accounting) Give the definition of a fund

Answer 86

A fund is defined as a fiscal and accounting entity with w self-balancing set of accounts. Funds are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitations.

Question 87

Government (State and Local Accounting) Where does interest received as returns on investments in an enterprise fund show up on the statement of cash flows?

Answer 87

For GASB purposes, cash flows from INVESTING ACTIVITIES includes interest received as returns on investments. Notice that this is different from regular accounting (FASB) which classifies interest on investments as cash flows from OPERATING ACTIVITIES.

Question 88

Government (State and Local Accounting) What are the five fund balance classifications?

Answer 88

1. Nonspendable 2. Restricted 3. Committed 4. Assigned 5. Unassigned

Question 89

Government (State and Local Accounting) What are the three financial statements for proprietary funds?

Answer 89

1. Statement of net position 2. The statement of revenues, expenses, and changes in fund net position. 3. The statement of cash flows RPC

Question 90

Government (State and Local Accounting) True or False On the balance sheet for the governmental funds, fund balances are reported in two categories- restricted and unrestricted

Answer 90

False On the balance sheet for the governmental funds, fund balances are reported in two categories- reserved and unreserved.

Question 91

Government (State and Local Accounting) What are the two financial statements prepared for fidicuary funds?

Answer 91

1. The statement of fiduciary net position | 2. The statement of changes in fiduciary net position

Question 92

Government (State and Local Accounting) True or False Agency funds should be reported on the statement of fiduciary net position, but not on the statement of changes in fiduciary net position.

Answer 92

True Agency funds should be reported on the statement of fiduciary net position, but not on the statement of changes in fiduciary net position.

Question 93

Government (State and Local Accounting) True or False According to governmental accounting standards, the statement of cash flows is prepared only for the proprietary funds.

Answer 93

True According to governmental accounting standards, the statement of cash flows is prepared only for the proprietary funds.

Question 94

Government (State and Local Accounting) True or False The statement of cash flows is a government wide financial statement.

Answer 94

False The statement of cash flows is NOT a government wide financial statement. The statement of cash flows is prepared only for the proprietary funds.

Question 95

Government (State and Local Accounting) According to governmental accounting standards, the format for the statement of cash flows consists of which four sections?

Answer 95

The SCF sections include cash flows from 1. Operating Activities 2. Noncapital financing activities 3. Capital and related financing activities 4. Investing activities Note: For governmental purposes there is no exclusive "Financing" section.

Question 96

Government (State and Local Accounting) What is the difference between the economic resources measurement focus and the financial resources measurement focus?

Answer 96

Economic resources measurement focus- associated with the ACCRUAL basis of accounting. Financial resources measurement focus- associated with the statements prepared for governmental funds.

Question 97

Government (State and Local Accounting) On the statement of net position for proprietary funds, net position is disclosed in which three classifications?

Answer 97

On the statement of net position for proprietary funds, net position is disclosed in three classifications 1. Net investment in capital assets 2. Restricted 3. Unrestricted

Question 98

Government (State and Local Accounting) True or False Cash received from government- mandated grants should be reported as a deferred inflow when cash is received prior to meeting the timing eligibility requirement.

Answer 98

True Cash received from government- mandated grants should be reported as a deferred inflow when cash is received prior to meeting the timing eligibility requirement. Note that, if there was not time restriction placed on the government- mandated grant by the state, revenue would not be deferred.

Question 99

Government (State and Local Accounting) Describe the journal entry to record the budget for a governmental entity.

Answer 99

Estimated Revenues Control xxxx Appropriation Control xxxx Budgetary Fund Balance xxxx

Question 100

Government (State and Local Accounting) True or False Assets are not reported on the balance sheet for governmental funds, but are reported as expenditures (net of depreciation) on the statement of revenues, expenditures, and changes in fund balances (government-wide statement).

Answer 100

True Assets are not reported on the balance sheet for governmental funds, but are reported as expenditures (net of depreciation) on the statement of revenues, expenditures, and changes in fund balances (government-wide statement).

Question 101

Government (State and Local Accounting) True or False In a capital projects fund, the inflow of bond proceeds should be accounted for in the year expended.

Answer 101

False In a capital projects fund, the inflow of bond proceeds should be accounted for in the YEAR RECEIVED, regardless of when the bond proceeds are expended.

Question 102

Government (State and Local Accounting) How should proceeds of long-term issues not recorded as fund liabilities be reported in governmental funds?

Answer 102

1. Report as other financing sources (includes issue premiums) 2. Debt issue costs, including underwriter fees, should be reported as expenditures.

Question 103

Government (State and Local Accounting) True or False Bond premiums/ Discounts are capitalized and amortized in the Debt Service Fund.

Answer 103

False Premiums/ Discounts are deemed to be another financing source in a governmental fund and are recorded as such when the bonds are sold. The premium/ discount is not capitalized/ amortized.

Question 104

Government (State and Local Accounting) True or False For GASB purposes, cash equivalents usually mature within three months (ninety days) or less from the original issuance date.

Answer 104

False For GASB purposes, cash equivalents usually mature within three months (ninety days) or less from the date the entity PURCHASED the security.

Question 105

Government (State and Local Accounting) True or False According to governmental accounting standards, the amount reported for transfers on the government-wide statement of activities represents transfers between governmental activities and business-type activities.

Answer 105

True According to governmental accounting standards, the amount reported for transfers on the government-wide statement of activities represents transfers between governmental activities and business-type activities.

Question 106

Government (State and Local Accounting) Describe the formula for the Statement of Net Position.

Answer 106

Assets + Deferred outflows of resources - Liabilities - Deferred inflows of resources = Net Position.