The Use of Funds in Government Accounting

Topics: Generally Accepted Accounting Principles, Asset, Balance sheet Pages: 271 (60352 words) Published: December 11, 2012
Chapter 2: The Use of Funds in Governmental Accounting

Multiple Choice

1.To what does basis of accounting refer?
a.whether an entity is trying to measure the excess of inflows over outflows b.how much cash an entity received in a particular reporting period c.the timing of recognition of assets, liabilities, revenues, and expenditures/expenses in financial statements d.the ownership of the assets, liabilities, and equities reported in a balance sheet

Answer:c

2.Governmental accounting normally does not
a.use separate funds to account for various activities
b.incorporate budgetary accounts into the accounting system
c.measure the amount of profit earned during a fiscal year
d.focus on flows of current financial resources

Answer: c

3.In governmental accounting, a fund is best defined as:
a.a sum of cash set aside to attain certain objectives
b.a fiscal entity that has both financial and capital resources
c.a fiscal entity that has cash resources only
d.a fiscal and accounting entity with a self-balancing set of accounts

Answer:d

4.Which of the following funds all use the current financial resources measurement focus?
a.Debt Service Fund, Special Revenue Fund, and Capital Projects Fund
b.General Fund, Debt Service Fund, and Internal Service Fund
c.Debt Service Fund, Investment Trust Fund, and Capital Projects Fund
d.General Fund, Debt Service Fund, and Pension Trust Fund

Answer:a

5.The three broad categories of funds used by governmental entities are:
a.Governmental, Proprietary, and Fiduciary
b.Unrestricted, Partially Restricted, and Fully Restricted
c.General, Special, and Fiduciary
d.General, Enterprise, and Agency

Answer:a

6.Within a fund, which of the following results from using the current financial resources measurement focus?
a.capital assets will be depreciated
b.property taxes will be recognized on the cash basis of accounting c.a liability must be reported for unsettled claims, provided payment ultimately will be made d.long-term assets and liabilities will not be recorded in the fund

Answer:d

7.Which of the following funds all use the economic resources measurement focus?
a.Enterprise Fund, Special Revenue Fund, and General Fund
b.Internal Service Fund, Pension Trust Fund, and Enterprise Fund
c.Debt Service Fund, Internal Service Fund, and Pension Trust Fund
d.Enterprise Fund, Internal Service Fund, and Capital Projects Fund

Answer:b

8.Which basis of accounting is used by funds that have a current financial resources measurement focus?
a.full accrual basis
b.cash basis
c.modified accrual basis
d.modified cash basis

Answer:c

9.Which of the following are fiduciary-type funds?
a.Pension Trust Fund, Agency Fund, and Permanent Fund
b.Investment Trust Fund, Special Revenue Fund, and Internal Service Fund
c.Agency Fund, Internal Service Fund, and Pension Trust Fund
d.Pension Trust Fund, Investment Trust Fund, and Agency Fund

Answer:d

10.The General Fund levies property taxes in the amount of $1,000,000 for calendar year 2009. It expects to collect $950,000 during the year, $30,000 in the first 60 days of the next year, and $15,000 during the rest of the next year. It does not expect to collect the remaining $5,000. How much property tax revenue should it recognize for the year 2009?

a.$1,000,000
b.$980,000
c.$995,000
d.$990,000

Answer:b

11.Under modified accrual accounting, when are revenues considered to be "available?"
a.when cash has been collected
b.when cash is collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period c.when cash is on hand or reasonably expected to be collected at any time in the future so they can pay liabilities incurred in the...
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