Governmental Accounting Questions

Question 1

When an Enterprise fund submits a bill to the General fund what is the result?

Answer 1

Revenue by the Enterprise fund

Expenditure by the General Fund

Question 2

What constitutes Revenue in the Debt Service Fund?

Answer 2

Interest Revenue from Investments

Question 3

What does program revenue include?

Answer 3

Charges for Services
Operating Grants and Contributions
Capital Grants and Contributions

Question 4

On the Government Wide Statement of Net Position - Net position is reported in the following categories?

Answer 4

Restricted & Unrestricted

Question 5

The debt service transactions of a special assessment issue for which the government is not obligated in any manner should be reported in

Answer 5

Agency Fund

Question 6

Fixed assets are reported in?

Answer 6

Governmental activities section of the Government Wide Statement of Net Position Financial Statements

Question 7

What should be accrued as revenues by the General Fund of a local government, when using modified accrual accounting?

Answer 7

Sales Tax or other firm commitments held by the State for Grants.

Question 8

What are the 5 categories of RSI

Answer 8

Management’s Discussion and Analysis;

Schedule of Funding Progress and Schedule of Employer Contributions (these schedules relate to pension disclosures);

Budgetary Comparison Schedules (this disclosure is for governmental funds)

Information about Infrastructure Assets Reported Using the Modified Approach; and

Certain information about Risk Financing Activities.

Question 9

What are the types of Non Exchange Transactions?

Answer 9

Imposed
Derived
Voluntary
Government Mandated

Question 10

What does Voluntary Exchanges consist of?

Answer 10

include grants and entitlements from one government to another where the providing government does not mandate the program covered by the grant. Voluntary

Voluntary contributions from individuals and other nongovernmental entities.

Question 11

Proceeds of Long Term Debt should be recorded as?

Answer 11

Bond Issue Proceeds - Other Financing Source

Question 12

Premiums received on general obligation bonds are generally transferred to what fund?

Answer 12

Debt Service

Question 13

In addition to governmental activities, what other activities may be reported on the government-wide Statement of Net Position?

Answer 13

business-type activities and discretely presented component units

Question 14

received goods that had been approved for purchase but for which payment had not yet been made. Whats the journal entry?

Answer 14

DR Expenditures Control xx
CR Accounts Payable (cash) xx

DR Reserved for Encumbrances xx
CR Encumbrances Control xx

Question 15

Generally Government must Capitalize donations and depreciate them. In what Case do they not have to?

Answer 15

If the Donation will be part of the collection and if sold the proceeds will be used to purchase other collections

Question 16

The accounting for special revenue funds is most similar to?

Answer 16

General Fund

Question 17

If a state or local government files for bankruptcy under Chapter 9 of the US Bankruptcy Code, accounts payable should be

Answer 17

remeasured based on the Plan of Adjustment

Question 18

According to GASB Concepts Statements which of the following is an essential characteristic of a liability?

Answer 18

A liability is a present obligation to sacrifice resources that the government has little or no discretion to avoid

Question 19

In what situation will the fund balance—unreserved of a governmental unit increase at the end of the fiscal year, when closing entries are prepared?

If no Outstanding Encumbrances at year end?

Answer 19

When Revenues are more than Expenditures and Encumbrances

In the case of No outstanding encumbrances - Appropriations exceed Actual Expenditures

Question 20

grants and subsidies to decrease operating deficits should be classified on the statement of cash flows as?

Answer 20

Non Capital Financing Activities

Question 21

An Enterprise fund has Prepaid Insurance, Depreciation and Provision for doubtful accounts? Which financial Statements should each of these be included?

Answer 21

Prepaid = Statement of Net Position as deferred

Depreciation and Provision = Statement of Revenues, Expenses and changes in Net Position

Question 22

A state government enters into an agreement in which a private company agrees to build a toll road for the state in exchange for the tolls to be collected for the next 30 years. The toll road has a fair value of $500 million at the time it is put in service. Which of the following is correct about the accounting for this arrangement?

Answer 22

The state government should record the toll road at its fair value and deferred revenue for the same amount

Question 23

What are the GASB Concept Statements intended to establish?

Answer 23

Fundamentals on which governmental accounting and reporting standards will be based

Question 24

What is the major difference between an exchange transaction and a nonexchange transaction for governmental units?

Answer 24

The relationship between the amount of value given and received

In an exchange transaction goods or services of equal or near equal value exchanged. In a nonexchange transaction one party provides value for no direct benefit.

Question 25

Other than Appropriations and Encumbrances what other account gets closed out at the end of the year?

Answer 25

Expenditures because it’s a temporary account.

Balance sheet accounts include Cash Investments, Payables, Fund Balances and Fund Balances Reserved for Encumbrances which are not closed out.

Question 26

On the government-wide Statement of Net Position internal service fund activities are normally reported in?

Answer 26

governmental activities section on the government-wide Statement of Net Assets.

Question 27

What is included in the elements of service efforts and accomplishments (SEA) reporting?

Answer 27

Measures of service effort

Measures of service accomplishments

Measures that relate service efforts to service accomplishments

Question 28

The criteria for identifying a legally separate organization as a component unit of a primary government is?

Answer 28

primary government can impose its will on the unit

or the unit is financially dependent on the primary government and There is a potential for the unit to provide specific benefits to, or burdens on, the primary government

Question 29

What is an example of an expenditure of a governmental unit’s general fund?

Answer 29

Routine employer contributions from the general fund to a pension trust fund

Question 30

The capital projects fund received $2000 to build a hotel. 1500 was Proceeds from a General Obligation bond and 500 was transferred from General Fund. How should this be reported on the Financial Statements?

Answer 30

1500 and 500 = Other Financing Source

2000 = Expenditure

Question 31

The Highwood School District participates in a cost-sharing defined benefit plan. What is the amount of expense and liability that it should record?

Answer 31

The expense is equal to the employers proportionate share

Question 32

What would be included in the Budgetary Comparison Schedule in the comprehensive annual financial report (CAFR) of a governmental unit?

Answer 32

general and major special revenue fund types for which annual budgets have been legally adopted