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Question : Multiple Choice 1.Governmental units include all of the following except a.counties. b.school districts. c.industrial

Multiple Choice

1.Governmental units include all of the following except

a.counties.

b.school districts.

c.industrial development districts.

d.voluntary health and welfare organizations.

2.Which type of fund entities are used to account for the activities of nonbusiness organizations that are similar to those of business enterprises?

a.Expendable fund entities

b.Proprietary fund entities

c.Budgetary fund entities

d.Restricted fund entities

3.When budgeted expenditures are enacted into law, they are referred to as

a.estimated expenditures.

b.encumbrances.

c.appropriations.

d.expenditures.

4.The term used to describe the application of accounting to expendable fund entities is the

a.accrual method.

b.cash method.

c.modified cash method.

d.modified accrual method.

5.The entry to close appropriations, expenditures, and encumbrances accounts includes a debit to

a.Appropriations.

b.Expenditures.

c.Encumbrances.

d.both Appropriations and Encumbrances.

6.The entry to record the receipt of office equipment previously encumbered includes a debit to

a.Office Equipment.

b.Encumbrances.

c.Reserve for Encumbrances.

d.both Office Equipment and Reserve for Encumbrances.

7.In accounting for and reporting inventory in the financial statements, the "Reserve for Inventory" account is used under

a.the consumption method.

b.the purchase method.

c.both the consumption and purchase methods.

d.none of these.

8.The two basic statements prepared for expendable fund entities are a balance sheet and a(n)

a.income statement.

b.statement of revenue.

c.statement of expenditures and encumbrances.

d.none of these.

9.If a credit was made to the fund balance in the process of recording a budget for a governmental unit, it can be assumed that

a.estimated expenses exceed actual revenues.

b.actual expenses exceed estimated expenses.

c.estimated revenues exceed appropriations.

d.appropriations exceed estimated revenues.

10.The "reserve for encumbrances—prior year" account represents amounts recorded by a governmental unit for

a.anticipated expenditures in the next year.

b.expenditures for which purchase orders were made in the prior year but disbursement will be in the current year.

c.excess expenditures in the prior year that will be offset against the current-year budgeted amounts.

d.unanticipated expenditures of the prior year that become evident in the current year.

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