Governmental Units

Question 1

The Comprehensive Annual Financial Report (CAFR) of a state or local governmental unit should include fund-level statements for which fund categories?

Answer 1

All three, governmental, proprietary and fiduciary

Question 2

Define jointly governed organizations

Answer 2

Jointly governed organizations are subject to the joint control or two or more participating governments, but there is neither an ongoing financial interest nor an ongoing financial responsibility.

Question 3

An entity is a component unit of another entity if

Answer 3

It is fiscally dependent on the other entity and a benefit or burden relationship exists with the other entity.

Question 4

According to GASB 52, real estate held as an investment by a government endowment should be reported at
A. Fair value
B. Historical cost
C. Historical cost less accumulated depreciation
D. A nominal value

Answer 4

Fair value

Question 5

In accordance with GASB 33,Accounting and Financial Reporting for Nonexchange Transactions, personal income taxes are an example of what type of nonexchange transaction?

Answer 5

Derived

Question 6

Which of the following has the highest level of authority for setting GAAP for nongovernmental not-for profit organizations

Answer 6

FASB, GASB is only for governmental agencies

Question 7

Which of the following is not one of the significant Financial reporting implications?

A. Expression of public policy
B. To demonstrate that the budget is prepared on the GAAP basis
C. Expression of Financial intent
D. Is a form of control

Answer 7

To demonstrate that the budget is prepared on the GAAP basis

Question 8

Which of the following funds is used to report the activities of a public landfill charging customers?

Enterprise
Permanent
Special revenue
Internal service

Answer 8

Enterprise

Question 9

The encumbrances control account of a county is decreased when A. Goods are ordered or B. When Goods are received?

Answer 9

When Goods are received

Question 10

A liability is recorded in governmental funds when:
A. Invoices are paid
B. The budget is amended
C. Goods or services are ordered
D. Goods and Services are received and the invoice is vouchered.

Answer 10

D. When goods and services are received, expenditures are recorded and a liability, vouchers payable, is recorded.

Question 11

Encumbrances outstanding at year’s end in a state’s general fund may be reported as what?

Answer 11

A Fund Balance assigned in the general fund.

Question 12

What are Are general fund transfers to the debt service fund for providing servicing a debt that is regular, routine or reoocurring?

Answer 12

Operating transfer

Question 13

Would buildings likely be considered infrastructure assets of a local government and why?

Answer 13

No, Infrastructure assets are capital assets that are normally stationary and can be preserved for a longer time than most capital assets such as bridges, sewer systems, lighting systems and drainage

Question 14

Where should the liability for the general obligation bonds be recorded?

Answer 14

government-wide financial statements

Question 15

When the budget for the General Fund is recorded, the required journal entry will include which of the following:

A. A Credit to appropriations
B. A Credit to estimated revenues
C. A debit to encumbrances
D. A credit to fund balance

Answer 15

a credit to appropriations

Question 16

If a state law requires that local governments prepare general fund and special revenue fund budgets on a basis that differs from the basis of accounting required by GAAP. which of the following should happen:

A. The actual amounts in the budgetary comparison schedule should be reported on the GAAP basis.

B. The actual amounts in the budgetary comparison schedule should be reported on the GAAP basis; a separate budget-basis comparison schedule should be prepared for the appropriate state oversight body.

C. The actual amounts in the budgetary comparison schedule should be reported using the government’s budgetary basis.
D. Only a separate budget-basis comparison schedule should be prepared for the appropriate state oversight body.

Answer 16

C. The actual amounts in the budgetary comparison schedule should be reported using the government’s budgetary basis.

Question 17

For what funds do budgetary comparisons need to be presented in connection with the basic financial statemetns?

Answer 17

General fund and major special revenue funds for which budget is legally adopted

Question 18

What is the characteristic arising from interfund transfers out?

Answer 18

distinguishes “Other Financing Uses” from expenditures.

Question 19

Assuming no outstanding encumbrances at year’s end, closing entries for which of the following situations would increase the unassigned fund balance at year’s end?

A. Estimated revenues exceed actual appropriations
B. Actual revenues were less than estimated revenues
c. Actual expenditures exceed appropriations
d appropriations exceed actual expenditures

Answer 19

Appropriations exceed actual expenditures

Question 20

Are Transfers in from other funds considered revenues

Answer 20

No, they are considered “Other financing sources”

Question 21

Which of the following revenues results from taxes and other assessments imposed by governments that are not derived from underlying transactions?

A.income taxes
B. Sales taxes
C. Fines and forfeits

Answer 21

Fines and forfeits

Question 22

Which is a government fund that uses the current Financial resources measurement focus?

Special revenue, internal service, or enterprise fund?

Answer 22

Special revenue

Question 23

Which of the following accounts should be closed at the end of the year?

Expenditures, vouchers payable, or fund balance assigned?

Answer 23

Expenditures