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Study Resources (Accounting)

Objective 4 1) For the segment manager to be properly evaluated, common costs should NOT be allocated to the various segments, even if an arbitrary allocation is required. 2) Contribution margin is the best measure of the controllable contribution of a profit center toward organizational profit. 3) If a product line was eliminated,.
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31.(Recording budgetary entries and operating general journal entries and posting detail to subsidiary ledgers) The Town of Roscoe Ridge is a small residential community.  The Town has two revenue sources, property taxes and charges for service; and two programs, administration and public safety.  The Town’s fiscal year 2013 is as follows: Town.
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31.              Which of the following pairs of accounts are likely to appear on the balance sheet of a government's general fund? a.cash and buildings b.cash and investments c.accounts payable and long-term bonds payable d.current portion of bonds payable and non-current portion of bonds payable 32.A governmental entity has a General Fund and an Enterprise Fund..
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11.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 12.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.
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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.
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11.Accrued interest on the following type of debt is reported in a governmental fund: a.short-term tax anticipation notes payable b.serial bonds c.general obligation bonds d.long-term bank notes 12.Which of the following groups of accounts best describes the types of assets and liabilities likely to be found in Capital Projects Funds? a.cash, investments, construction contract payable, matured.
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21.Which line item would not properly appear in the closing entry of a governmental fund? a.expenditures—public safety salaries b.expenditures—debt service c.fund balance d.expenditures—depreciation 22.If the Budgetary fund balance account was debited when the budget was recorded in the City of Mustangville's General Fund, then a.appropriations exceed estimated revenues b.actual expenditures exceed appropriations c.estimated revenues exceed appropriations d.appropriations exceed actual.
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11.Which of the following classifications will not appear in the annual budget for a General Fund? a.depreciation b.capital outlay c.debt service d.current operating 12.The document that lists the steps of the budget process is the a.budget request b.budget summary c.budget calendar d.budget worksheet 13.For a typical city government, the budget has an important influence on the determination of the annual a.income.
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Multiple Choice 1.What is the purpose of a Debt Service Fund? a.to account for resources that are restricted or otherwise limited to pay the debt service on all debt of the government, including Enterprise fund debt and short-term debt used to finance General Fund operations b.to account for resources that are restricted or.
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Problems 40.(Journal entries - basic events and transactions) Prepare entries to record the following events and transactions for Tropical Township for the year 2013. a.The Township adopted a budget calling for appropriations of $360,000.  The estimated revenues (all property taxes) were $340,000. b.The Township sent property tax bills amounting to $340,000 to property owners. c.Property.
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47.              (Journal entries - interfund transactions) Theodore County uses a General Fund, a Special Revenue Fund, and an Enterprise Fund. The Special Revenue Fund is financed by a grant from the state to provide care for the elderly. The Enterprise Fund provides bus service both to the public and to government.
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39.(Journal entries with emphasis on Debt Service Fund) The Shannon Township Debt Service Fund accumulates resources to pay its $2 million general obligation debt. The debt is payable in equal annual installments of principal over 10 years with 5% interest on the unpaid principal.  Prepare journal entries to record the following.
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49.(Journal entries - comprehensive problem) The Town of Elderville accounts for its revenues and day-to-day operating expenditures in its General Fund. The Town uses encumbrance accounting to keep budgetary control over the appropriation for "other expenditures." Prepare journal entries to record these transactions in the General Fund for the calendar year.
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17.              (Discussion problem on fund accounting) Discuss the nature and purpose of "fund accounting." 18.(Matching organizational characteristics with different types of organizations.) Listed below are some identifying characteristics of organizations.  Indicate with a check mark (?) in the appropriate column(s) those characteristics that apply to each type of organization.  Some characteristics may apply.
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Problems 49.(True or false - Capital Projects Fund items) State whether these statements are true or false.  Discuss why the false statements are false. a.Assets of the Capital Projects Fund include cash and investments, but not capital assets. b.It is not possible for expenditures of the Capital Projects Fund to exceed revenues in.
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Multiple Choice 1.The measurement focus used by governmental fund measures: a.capital resources b.spendable resources c.spendable resources and capital resources d.economic resources 2.A government would refer to its property tax calendar to determine whether property taxes receivable at any given time are a.collectible in part or in full b.delinquent or current c.sufficient to finance planned expenditures d.larger or smaller than those.
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41.(Journal entries for a major construction project) Prepare journal entries to record the following transactions of a state, identifying the funds affected by each transaction. Record journal entries for all funds affected.  The state prepares a budget for the Capital Projects Fund and uses encumbrance accounting in that fund.              a.The state.
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21.Which of the following is a distinguishing characteristic of proprietary funds? a.they recognize revenues when they are measurable and available b.they always earn sufficient revenues to cover their expenses c.they charge fees for the services they provide d.they are legally prohibited from selling services to other governmental agencies 22.What is the purpose of a debt.
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Objective 6 The Jordan Company manufacturers only one type of shoe and has two divisions, the Sole Division and the Assembly Division. The Sole Division manufactures soles and then "sells" them to the Assembly Division, which completes the shoes and sells them to retailers. The market price for the Assembly Division.
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31.The accounting and financial reporting for the General Fund is least similar to that of a a.capital projects fund b.debt service fund c.pension trust fund d.special revenue fund 32.A favorable expenditures variance signifies that, during the year, a.Unassigned fund balance increased b.actual spending was less than budgeted spending c.estimated revenues were less than actual revenues d.total expenditures did not.
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Multiple Choice 1.Which of the following is a distinguishing characteristic of a nonbusiness organization? a.Its revenues do not exceed its expenses b.There is an absence of ownership interests that can be sold, transferred, or redeemed c.It does not depreciate its capital assets d.It does not charge fees for any of its services 2.Which of the following.
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11.When a city borrows cash short-term in anticipation of the receipt of property tax revenues, which account would it credit? a.property taxes receivable b.property tax revenues c.estimated other financing sources d.tax anticipation notes payable 12.The Village of Titus borrows money using a tax anticipation note.  The proceeds from the borrowing are deposited in the General.
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Objective 7 1) Residual income equals reported accounting income less the economic cost of the investment used to generate that income. 2) Return on investment is the ratio of income to investment, with varying definitions of income and investment. 3) The financial measure, economic value added, evaluates income relative to the level of.
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54.(Comparative computations of expenditures and expenses based on the same underlying transactions) A department of a local government began operations at the beginning of the current fiscal year with $250,000 cash.  During the fiscal year, the department made cash disbursements for the following: #Salaries and other personnel costs, $100,000 #Office rent and utilities,.
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41.The information generated from the accounting system of a governmental-type fund a.is budget oriented b.measures profitability c.measures operational efficiency d.is intended for use only by legislators 42.Which measurement focus and basis of accounting should be used in an Internal Service Fund? measurement focusbasis of accounting a.current financial resourcesfull accrual b.current financial resourcesmodified accrual c.economic resourcesmodified accrual d.economic resourcesfull accrual 43.A local.
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Problems 28.(Determination of property tax rate) The City of Weston is preparing its budget for calendar year 2013.  After estimating revenues from all other sources, the City calculates that it must raise $7,000,000 from property taxes.  You are given the following information regarding the tax rate: Property taxes to be collected$7,000,000 Estimated uncollectible property.
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11.              Which of the following best describes the general principle for recognizing property tax revenues in the General Fund? a.They should be recognized in the current period to the extent that cash is collected b.They should be recognized for the entire amount levied for the current period, regardless of when they are.
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11) Asset turnover, the productivity component of return on investment (ROI), is: A) 20%. B) 80%. C) 25%. D) 125%. 12) The return on investment (ROI) is: A) 20%. B) 80%. C) 25%. D) 125%. 13) Economic value added: A) encourages segment managers to accept only new capital projects with a return on investment (ROI) that exceed the current ROI. B) of.
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18) Department income totals $200,000, investment in the department is $2,000,000, and the company's cost of capital is 8%.   Required: a. Calculate the return on investment (ROI). b. Calculate economic value added. c. Assume there is a capital project that requires a $200,000 investment for a $18,000 return. Would the department manager be more.
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Multiple Choice 1.Accounting for a Special Revenue Fund is most like the accounting for which of the following? a.the General Fund b.an Internal Service Fund c.a Pension Trust Fund d.an Enterprise Fund 2.When should property tax revenues be recognized in the accounting records? a.when the budget is prepared b.when the appropriations bill is signed into law c.when property taxes.
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Multiple Choice 1.When the chief executive of a governmental unit submits a "balanced budget" to the legislative body, it usually means that: a.the budget is balanced on the full accrual basis of accounting b.the budget is balanced in accordance with generally accepted accounting principles c.proposed expenditures do not exceed estimated monies available for the.
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Objective 5 1) A major goal of transfer pricing is to motivate the decision maker to act in the organization's best interests. 2) Transfer prices based on actual costs provide no incentive to the supplying division to control costs. 3) If external markets exist, then market-based transfer prices are the most appropriate. 4) Negotiated.
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Objective 3 1) For an organization to be successful, activities within sales, manufacturing, and customer service need to be coordinated. 2) Organizations use nonfinancial control to provide a summary measure of how well their systems of operations control are working. 3) Properly chosen nonfinancial measures anticipate and explain financial results. 4) A support department,.
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21.A city constructs a new building by issuing debt in the amount of $3 million. How should the city report the debt proceeds in its Capital Projects Fund statement of revenues, expenditures, and changes in fund balance? a.as a revenue b.as an other financing source c.as a liability captioned general long-term obligations d.as a.
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21.Which of the following liabilities normally would not be reported in governmental funds? a.accrued salaries payable b.bonds payable c.vouchers payable d.all of the above are commonly reported in governmental funds e.none of the above are commonly reported in governmental funds 22.Governmental fund liabilities are: a.claims against current financial resources b.obligations not currently payable c.both a and b d.none of the.
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51.(Treatment of inventory—purchases method) The General Fund of the City of Mineral Wells shows $40,000 in supplies inventory on January 1, 2013.  During the year 2013, General Fund cash is used to purchase $110,000 of supplies.  On December 31, 2013, the city conducts an inventory count and finds $50,000 of supplies.
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  Objective 1 1) Financial control involves the use of financial measures to assess organizational and management performance. 2) Financial measures identify what is wrong with an organization, not simply provide a signal that something needs attention. 3) Nonfinancial measures can highlight falling sales and profits in an organization, but only financial measures can.
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Problems 36.(Classification of resource inflows in Fund operating statements) A county's Debt Service and Capital Projects Funds had the following resource inflows during 2013. State whether each of the inflows should be reported as revenues or as other financing sources in the fund-level statements of revenues, expenditures and changes in fund balances..
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31.In the statement of revenues, expenditures, and changes in fund balances, a transfer received by the Debt Service Fund from the General Fund should be reported by the Debt Service Fund as a: a.transfer in, in the other financing sources/uses section b.negative expenditure, in the expenditure section c.direct addition to equity, in the.
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11) A cost center is a business segment: A) that usually evaluates employee performance by comparing the center's actual costs with target or standard costs for the amount and type of work done. B) in which interperiod cost comparisons can be misleading if the output level and production mix are constant. C) that.
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11.Which of the following is the most authoritative source of accounting standards for cities and counties? a.Current practices widely used by not-for-profit entities b.GASB Statements and Interpretations c.AICPA Industry Audit Guides d.Implementation guides published by GASB staff 12.Concepts statements issued by the GASB and the FASAB emphasize which of the following objectives of governmental financial.
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Objective 7 1) In the service sector, ________ rather than machines usually represent(s) the capacity constraint, which underscores the importance of budgeting even in nonmanufacturing organizations. A) people B) knowledge C) familiarity with processes D) potential for sales 2) ________ occur(s) when a superior simply tells subordinates what their budget will be. A) Traditional budgeting B) Stretch goals C).
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21.              The City of Kent’s police department needs a new police car.  A police car is ordered at an estimated cost of $34,000 and the appropriate budgetary control journal entry is made.  When the car is received, the actual cost is $35,000.  Which of the following is a part of.
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The management accountant for the Martino Organics has prepared the following segmented income statement for the most current year. Produce Fish & Meat Sundries Total Sales $80,000 $120,000 $60,000 $220,000 Variable expenses 36,000 65,000 20,000 121,000 Contribution margin 44,000 55,000 40,000 99,000 Other costs 18,000 21,000   8,000 47,000 Segment margin 26,000 34,000 32,000 52,000 Allocated avoidable costs   2,000 3,000   3,000 8,000 Segment income 24,000 31,000 29,000 44,000 Allocated corporate costs 7,000   7,000   7,000 21,000     Corporate profit $17,000 $ 24,000 $ 22,000 $ 23,000 11) If the Produce department had been eliminated prior.
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Objective 2 1) In a decentralized organization, front-line employees are trained to respond to changes in the business environment. 2) The amount of decentralization in an organization reflects the organization's trust in its employees and other factors. 3) When an organization moves to decentralized decision making, control moves from results control to task.
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Problems 45.(Journal entries - property tax accounting) Prepare entries to record the following transactions and events related to Dominguez County's property taxes for the year beginning January 1, 2013: a.To raise property tax revenues of $940,000, the County sends bills to property owners totaling $950,000. This will provide $10,000 for uncollectible taxes and.
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