Exam 1

1. Which of the following is not a category of program revenue reported on the statement of activities at the government-wide level?

2. The Financial Accounting Standards Board (FASB) is the body authorized to establish accounting principles for all colleges and universities and health care entities.

3. Three categories of program revenues are reported in the statement of activities: charges for services, operating grants and contributions, and capital grants and contributions.

4. The government-wide statement of net position is prepared using the same measurement focus and basis of accounting as the General Fund balance sheet.

5. Which of the following is true regarding financial reporting for internal service funds?

Internal service funds are aggregated and reported as a major fund in the proprietary fund financial statements.

Internal service funds are reported in the governmental fund financial statements.

Internal service funds are generally reported in the Business-type Activities column of the government-wide financial statements.

Internal service funds are generally reported in the Governmental Activities column of the government-wide financial statements.

6. Extraordinary items and special items are reported on the government-wide statement of activities

7. The Governmental Accounting Standards Board (GASB) is the body authorized to establish accounting principles for all state and local governments, both general purpose and special purpose.

8. Program revenues are distinguished from general revenues on the government-wide statement of activities under GASB standards.

9. Governmental funds are identical to governmental activities, proprietary funds are identical to business-type activities, and fiduciary funds are identical to fiduciary activities of a government.

10. Recording the annual budget is optional in the General Fund.

11. Government-wide financial statements include financial information for all governmental, proprietary, and fiduciary funds.

12. The account Budgetary Fund Balance can have either a debit or credit balance.

13. The receipt of equipment that had previously been ordered should be recorded in the General Fund as a debit to

Expenditures.

Encumbrances.

Equipment.

Appropriations.

14. Economic resources are cash or items expected to be converted into cash during the current period, or soon enough thereafter to pay current period liabilities.

15. Which of the following should not be reported on the balance sheet of the General Fund?

Due from federal government.

Vouchers payable.

Equipment.

Tax anticipation notes payable.

16. Which of the following is not a characteristic of a fund as defined by GASB standards?

A fiscal entity.

An accounting entity.

A self-balancing set of accounts.

A reporting entity.

17. The Financial Accounting Standards Board has the responsibility for setting accounting and financial reporting standards for

Special purpose governments with a business purpose.

All not-for-profit organizations.

All not-for-profit organizations and business entities.

All not-for-profit organizations that are nongovernmental and business entities.

18. The accrual basis of accounting applicable to proprietary fund types requires that exchange revenues be recognized when

Earned.

Measurable and available.

Collected in cash.

Authorized by the budget ordinance.

19. The Governmental Accounting Standards Board (GASB) is the body authorized to establish accounting principles for all government entities.

20. You are trying to decide if an entity you are reviewing is a government or a not-for-profit. Which of the following would indicate it is a government rather than a not-for-profit entity?

Absence of profit motive.

Absence of a defined ownership interest that can be sold, transferred, or redeemed.

Resource providers do not expect benefits proportional to the resources provided.

A primary source of revenues is taxes.

21. In accounting for state and local governments the modified accrual basis is required for

Governmental and fiduciary funds.

Proprietary and fiduciary funds.

Governmental and internal service funds.

Governmental funds.

22. Special purpose governments generally provide a wider range of services to their residents than do general purpose governments.

23. Only those governmental and proprietary funds that meet the GASB size criteria for major funds are reported in separate columns of the governmental and proprietary fund financial statements.

24. Under the modified accrual basis of accounting, revenues should be recognized when

Measurable and available.

Earned.

Collected in cash.

Authorized by the budget ordinance.

25. Governmental activities are to be classified as governmental or business-type.

26. The government-wide statement of net position displays the net expense or revenue for each function or program of the government.

27. The Governmental Activities column of the government-wide statement of net position reports both current and noncurrent assets and liabilities.

28. Which of the following best describes the recommended format for the government-wide statement of activities?

Program revenues minus expenses plus general revenues equals change in net position.

Expenses minus program revenues plus general revenues equals change in net position.

Program revenues plus general revenues minus expenses equals change in net position.

Program revenues minus expenses minus other revenues and expenses equals change in net position.

29. Fund-based financial statements are intended to provide detailed financial information about the governmental, proprietary, and fiduciary activities of the primary government.

30. Governmental funds account for assets but not the liabilities.

31. The Governmental Accounting Standards Board is assigned responsibility for setting accounting and financial reporting standards for

State and local government entities and governmentally-related units and agencies, such as utilities, authorities, hospitals, and colleges and universities.

State and local governments and all not-for-profit organizations.

Not-for-profit organizations.

Governments such as federal agencies, states, cities, counties, villages, and townships.

32. Which of the following statements is not a true statement about expenses that are directly related to a government function or program?

33. Which of the following financial statement(s) reports both current and noncurrent assets and liabilities?

Government-wide Statement
of Net Position

General Fund Balance
Sheet

A)

No

Yes

B)

No

No

C)

Yes

No

D)

Yes

Yes

Choice A

Choice B

Choice D

Choice C

34. which of the following items would not appear in a statement of revenues, expenditures, and changes in fund balances prepared for a governmental fund?

35. Which of the following organizations issue standards that focus on both internal and external financial reporting?

Federal Accounting Standards Advisory Board.

American Institute of CPAs.

Governmental Accounting Standards Board.

Financial Accounting Standards Board.

36. Examples of general purpose governments include cities, towns, and public schools that receive tax revenue to finance the services they provide.

37. The body that has been established to recommend accounting and financial reporting standards for the federal government is the

Federal Accounting Foundation (FAF).

Federal Accounting Standards Advisory Board (FASAB).

Financial Accounting Standards Board (FASB).

Governmental Accounting Standards Board (GASB).

38. When equipment is ordered by a department of the government, the purchase order should be recorded in the General Fund as a debit to:

Equipment.

Expenditures.

Appropriations.

Encumbrances.

39. An interfund transfer in should be reported in a governmental fund operating statement as a(an):

Due from other funds.

Revenue.

Other financing use.

Other financing source.

40. Vehicles used by the Culture and Recreation Department should be reported in the governmental fund financial statements.