Asset and General Fund

Topics: Asset, Generally Accepted Accounting Principles, Inventory Pages: 9 (2029 words) Published: February 14, 2013
Alabama State University
College of Business Administration
ACT 532 Advanced Fund Accounting
Exam III
November 20, 2012

1) Governments must report nonspendable fund balance in a governmental fund's balance sheet for A) Inventory.
B) Prepaid assets.
C) Land.
D) All of the above.
E) Items A and B only.

2) The following benefits are examples of other postemployment benefits (OPEB) except for A) Health care insurance.
B) Pension benefits.
C) Vision insurance.
D) Life insurance.
E) All of the above are common examples of OPEB.

3) Assume that the Village of Hannah uses the purchases method of inventory accounting. At the end of the year the inventory levels have increased. What entry would be made to reflect the inventory increase? A) DEBIT Inventory of Supplies, CREDIT Fund Balance

B) DEBIT Expenditures, CREDIT Inventory of Supplies
C) DEBIT Inventory of Supplies, CREDIT Other Financing Sources D) DEBIT Expenditures, CREDIT Other Financing Sources
E) DEBIT Inventory of Supplies, CREDIT Expenditures

4) Which of the following is not a typical governmental fund liability (and thus not an expenditure that is recognized when the liability is incurred)? A) Accounts payable
B) Debt service
C) Salaries payable
D) Vouchers payable
E) All of the above are typical governmental fund liabilities. Answer:

5) Which of the following governmental fund expenditures would not be considered a current operating expenditure? A) Capital outlay
B) Rent
C) Office supplies
D) Salaries and wages
E) Employee benefits
F) All of the above expenditures would be classified as current operating expenditures in a governmental fund. Answer:

6) Expenditures in a governmental fund are recognized when due except for A) Interest on general long-term debt.
B) General long-term debt principal retirement.
C) Capital outlay.
D) Rent.
E) Items A and B only.
F) Items C and D only.

7) Assume that Onyx County's annual required contribution for their OPEB plan was determined to be $35,000. The county, however, chose to only fund $10,000 of that amount for the current year. The General Fund, which is the only fund with employees, would recognize expenditures in the current year of A) $35,000.

B) $25,000.
C) $10,000.
D) $45,000.
E) $0.
F) None of the above.

8) A city's annual required contribution for the OPEB plan offered to their General Fund employees is $14,000. The city does not choose to make the annual required contribution but instead will continue to pay postretirement benefits as they come due. The current year's benefit payments total $2,500. The General Fund would recognize an expenditure of A) $0.

B) $2,500.
C) $14,000.
D) $16,500.
E) None of the above.

9) The General Fund borrowed $10,000 on a six-month note, with 5.0% interest, on April 1. As of the June 30 fiscal year end, the General Fund would report accrued interest payable in the amount of A) $0.

B) $125.
C) $250.
D) $500.

10) A city government purchased a new fire truck in Year 1 for $270,000. The city incurred an additional $30,000 in transportation and calibration costs to ready it for use. It has an estimated useful life of 20 years, though it is being financed over a 15 year period. The amount of depreciation that will be reported each year in the General Fund will be A) $0.

B) $13,500.
C) $15,000.
D) $18,000.
E) $20,000.

11) The village of Bear Creek uses General Fund resources to pay debt service payments for its sole outstanding general obligation bonds, which were issued to finance the new Village Hall. Which of the following statements is false? A) GAAP requires the village to use a Debt Service Fund to account for the payment of principal and interest on the long-term debt. B) GAAP permits but does not require the village to use a Debt Service Fund to account for the payment of principal and interest on the long-term debt. C) The General Fund would...
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