Homework answers / question archive / Chapter 2 – Homework Which of the following statements is true regarding the definition of a fund? Which of the following statements is true regarding the basic financial statements of a state or local government? Which of the following sets of elements are common for both governmental financial statements and for profit financial statements? The measurement focus and basis of accounting that should be used for the governmental fund financial statements are? Which of following amounts that are identified at the end of the fiscal year would be classified as a restricted fund balance? Separate reporting for major funds is needed because: Assets and liabilities of activities for which the government is acting in either an agency or trustee capacity for individuals, organizations, or other governments should be reported in: Under the modified accrual basis of accounting: Financial information about an internal service fund should be reported in the proprietary fund financial statements and the: A certain city reports the following year-end total assets: For each of the following fund types, indicate the fund category by selecting either Governmental funds, Proprietary funds, or Fiduciary funds for each item

Chapter 2 – Homework Which of the following statements is true regarding the definition of a fund? Which of the following statements is true regarding the basic financial statements of a state or local government? Which of the following sets of elements are common for both governmental financial statements and for profit financial statements? The measurement focus and basis of accounting that should be used for the governmental fund financial statements are? Which of following amounts that are identified at the end of the fiscal year would be classified as a restricted fund balance? Separate reporting for major funds is needed because: Assets and liabilities of activities for which the government is acting in either an agency or trustee capacity for individuals, organizations, or other governments should be reported in: Under the modified accrual basis of accounting: Financial information about an internal service fund should be reported in the proprietary fund financial statements and the: A certain city reports the following year-end total assets: For each of the following fund types, indicate the fund category by selecting either Governmental funds, Proprietary funds, or Fiduciary funds for each item

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Chapter 2 – Homework

1. Which of the following statements is true regarding the definition of a fund?
2. Which of the following statements is true regarding the basic financial statements of a state or local government?
3. Which of the following sets of elements are common for both governmental financial statements and for profit financial statements?
4. The measurement focus and basis of accounting that should be used for the governmental fund financial statements are?
5. Which of following amounts that are identified at the end of the fiscal year would be classified as a restricted fund balance?
6. Separate reporting for major funds is needed because:
7. Assets and liabilities of activities for which the government is acting in either an agency or trustee capacity for individuals, organizations, or other governments should be reported in:
8. Under the modified accrual basis of accounting:
9. Financial information about an internal service fund should be reported in the proprietary fund financial statements and the:
10. A certain city reports the following year-end total assets:
11. For each of the following fund types, indicate the fund category by selecting either Governmental funds, Proprietary funds, or Fiduciary funds for each item.

• Agency Fund –                                                          
• Permanent Fund –                                                      
• Debt service fund –                                                   
• Internal service fund –                                               
• Pension (& other employee benefit) trust fund –      
• Special revenue fund –                                              
• Enterprise fund –                                                       
• General fund –                                                           
• Investment trust fund –                                             
• Capital projects fund –                                              
• Private-purpose trust fund –                                      

 

12. For each fund or government-wide category.  Select the letters of the applicable fund type or characteristics.  Multiple letters may apply to each category

Fund type or characteristic:

1. Operational Accountability
2. Modified accrual
3. Agency funds
4. Statement of cash flows
5. Fiscal accountability
6. Debt service funds
7. Current & noncurrent asset liabilities
8. Internal service funds
1. Integrated budgetary accounts
10. Revenue & expenses
11. Additions and deductions

 

13. Choose the type of fund that would most likely be reported in the examples given:

1. Construction of public buildings –                                                                                        
2. Costs of a central purchasing and warehouse function –                              
3. Gifts in which the principal must be invested and

Preserved but the investment earnings must be used to

Provide scholarships to children of police officers who

Died in the line of duty -                                                                               

4. Administrative expenses of the city manager’s office –                                
5. Assets held for external government participants in the        

Government’s investment pool for the purpose of

Earning investment income -                                                                                     

6. Gifts in which the principal must be invested and preserved                        

But the investment earnings can be used for public purposes -                     

7. Costs of operating a municipal swimming pool -                                           
8. Taxes collected on behalf of another governmental unit -                             
1. Assets held in trust to provide retirement benefits for municipal workers -  
10. Principal and interest payments on general long-term debt -             
11. Grant revenues restricted for particular operating purposes -                        

 

14. Section A provides a list of the results of Georgetown’s analysis of its fund balances at its fiscal year end. 

Section B provides a list of the possible classifications for reporting the items listed in Section A.

 

Required:

Using the choices provided in Section B, choose the classification of reporting that would most likely be used in the situations given in Section A.

 

Section A

1. At year end a special revenue fund has a $50K fund balance on which there are no constraints
2. Georgetown has a $1M emergency reserve fund set aside.  According to the town ordinance, funds can only be used from this fund with approval of 2/3 of the town council
3. Georgetown determined that the General Fund has $22K in inventory it should report on its fund financial statements
4. Georgetown issued bonds that sold at a premium.  Using the authority allowed her by the governing body, the city manager made the decision to set aside the $1M premium to pay the principal on the debt when it comes due in a future period.
5. The federal government has provided a grant for emergency housing assistance that can only be used for low income families.  Georgetown determined $250K of the grant funds remained at year-end.

 

 

15. Forest City has recently implemented GAAP reporting and is attempting to determine which of the following special revenue funds should be classified as “major funds” and therefore be reported in separate columns of the balance sheet and statement of revenues, expenditures, and changes in fund balances for the governmental funds.  As the city’s external auditor, you have been asked to provide a rationale for either including or excluding each of the following funds as a major fund.  Determine which of the following funds should be reported as a major fund.