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Study Resources (Accounting)

True / False Questions 1.Resources that are held in trust for the benefit of the government’s own programs or its citizenry should be accounted for using a governmental fund rather than a fiduciary fund.  2.Trust funds often exist over a longer period of time than agency funds, represent and develop vested.
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65.The following cash transactions were among those reported by Crawford County's Water and Sewer Enterprise Fund for the year: In the Water and Sewer Enterprise Fund's statement of cash flows for the year ended December 31, what amount should be reported as cash flows from capital and related financing activities? A..
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11.Effective management of cash and investments of individual funds may be enhanced by placing the cash and investments in a pool under the control of the treasurer of the government or other official. 12.When a cash and investment pool is created, the assets of each fund entering the pool should.
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Multiple Choice Questions 30.Which of the following is not properly recorded in the governmental activities accounts?  A. Tax-supported general obligation bonds. B. Obligations under capital leases used to finance general capital assets. C. The long-term portion of judgments and claims. D. Revenue bonds issued by an enterprise fund. 31.The liability for.
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11.In auditing compliance with laws and regulations as part of a single audit, the auditor must render an opinion on the specific requirements applicable to each program for which the entity receives federal financial assistance.  12.Though used historically by corporate boards of directors, audit committees have great potential in a.
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45.Which of the following is the appropriate basis of accounting for an agency fund?  A. Cash basis. B. Modified cash basis. C. Accrual basis. D. Modified accrual basis. 46.A donor contributed $100,000 to the city stipulating that the money be invested and that the earnings thereon be used for maintenance.
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21.Construction contracts for governmental projects often provide that a certain percentage of each billing by the contractor will be retained by the government until the project is inspected and accepted upon completion.  22.When a project has been completed, inspected, and accepted, retained percentages of contract billings may be paid.  23.Streets,.
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Multiple Choice Questions 35.Which of the following may properly be reported as a component of net position in the proprietary fund statement of net position?  A. Retained earnings. B. Designated equity. C. Restricted net position. D. Contributed capital. 36.Which of the following properly portrays the components of net position for proprietary.
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40.Which of the following budgetary accounts is typically used by a debt service fund?  A. Encumbrances. B. Appropriations. C. Estimated Uncollectible Accounts. D. Encumbrances Outstanding. 41.Interest expenditures on bonds payable should be recorded in a debt service fund  A. At the end of the fiscal period if the interest due.
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Short Answer Questions 68.The following key terms from Chapter 6 relate to accounting for general long-term liabilities and debt service: A. Legal defeasance B. Regular serial bonds C. In-substance defeasance D. Irregular serial bonds E. Debt limit F. Annuity serial bonds G. Debt margin For each of the following definitions, indicate the key term from the list above that.
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21.Budgets for enterprise funds should be recorded in the accounts in the same manner as budgets for a General Fund or a special revenue fund. 22.Unbilled customer accounts receivable should be reflected in the balance sheet of a governmentally owned utility even though the exact amount of service to be.
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11.Cash discounts available on the purchase of capital assets but not taken should be capitalized as part of the cost of the capital assets.  12.In addition to required disclosures about general capital assets, a government is required to allocate the depreciation expense on all of its general capital assets to.
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11.Total quality management (TQM) seeks to continuously improve an organization's ability to meet or exceed customers' demands, and, as such, is useful in a government setting as well as a business setting.  12.Service efforts and accomplishments measures suffer from the same problem as line-item or object-of-expenditures budgeting; that is, focusing.
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True / False Questions 1.General long-term liabilities are those that arise from the activities of a government.  2.Although some governments have issued taxable debt, the interest earned on most debt issued by state and local governments is exempt from federal taxation and, in some states, from state taxation.  3.Both general capital.
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60.Debt service funds are used to record A. Both principal and interest payments of debt issues. B. Only interest payments on debt issues. C. Only principal payments of debt issues. D. Neither principal nor interest payments of debt issues. 61.When the debt service fund makes a payment of principal and interest on an outstanding.
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28.A condition whereby the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis is called a(an)  A. Deficiency. B. System design weakness. C. Unacceptable reportable condition. D..
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61.Which of the following is not true for capital projects funds?  A. Capital projects funds use a Construction Work in Progress account to record costs until the project is completed. B. Encumbrance accounting is generally used. C. Capital projects funds use the modified accrual basis of accounting. D. Capital projects.
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Multiple Choice Questions 17.Which of the following is a primary objective of financial reporting by state and local governments?  A. To provide information that can be used for capital allocation decisions made by external investors. B. To report on the legal requirements imposed on the government by its elected officials. C..
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38.All of the following reports are included in the reporting package resulting from the single audit except  A. Financial statements and schedule of expenditures of federal awards. B. Summary schedule of prior audit findings. C. Report on efficiency and effectiveness. D. Corrective action plan. 39.Which of the following is not.
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Short Answer Questions 78.The following are key terms in Chapter 7 that relate accounting for the business-type activities of state and local governments: A. Customer advances for construction B. Revenue bonds C. Utility plant acquisition adjustment D. Regulatory accounting principles E. Original cost F. Historical cost G. General obligation bonds For each of the following definitions, indicate the key.
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Multiple Choice Questions 31.Which of the following would be considered a general capital asset?  A. A vehicle purchased from General Fund revenues. B. A vehicle purchased and maintained by an enterprise fund. C. A computer purchased from revenues of an internal service fund and used by the supplies department. D. Real.
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Multiple Choice Questions 25.Each of the following are reported as fiduciary funds except  A. A permanent fund. B. An investment trust fund. C. An agency fund. D. A private-purpose trust fund. 26.Which of the following is not a fiduciary fund?  A. Agency fund. B. Investment trust fund. C. Public-purpose trust fund. D. Pension.
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True / False Questions 1.For proprietary funds, governments generally present a statement of net position in a format that displays assets, plus deferred outflows of resources, less liabilities, less deferred inflows of resources, equals net position.  2.Internal service funds of one government may not provide goods or services, on a cost-reimbursement.
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11.Disclosures about long-term liabilities should be included in the notes to the financial statements to provide users with information about authorization of new debt issues, sale of previously authorized issues, and retirement and refunding of debt during the year.  12.Notes to the financial statements of a state or local government.
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True / False Questions 1.Audits of governments' financial statements are performed to determine if the financial statements are correct and in accordance with generally accepted accounting principles, but not to determine if there is compliance with laws and regulations.  2.The introductory paragraph of an audit report introduces the auditor and his/her.
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Multiple Choice Questions 18.Audits of state and local governments may be performed by all of the following except  A. Independent CPAs. B. State audit agencies. C. Federal grantor agencies. D. The Office of Management and Budget (OMB). 19.Governments and not-for-profit entities may be subject to each of the following levels of.
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True / False Questions 1.GASB Concepts Statement 4 identifies expenditures as a financial statement element.  2.According to the guidance of GASB Concepts Statement 3, financial information can be communicated by recognition in the financial statements, disclosure in the notes to the financial statements, presentation as required supplementary information, or presentation as.
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92.The Motor Vehicle Repair Fund of Laramee County provides centralized repair for county-owned vehicles. For the following summarized transactions and events for the year ended June 30, provide the fund level entries in general journal form required to conform to generally accepted accounting principles. If no entry is needed, so.
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41.Equipment in general governmental service that had been acquired several years ago by a special revenue fund at a cost of $40,000 was sold for $15,000 cash. Accumulated depreciation of $30,000 existed at the time of the sale. The journal entry to be made in the special revenue fund will.
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Multiple Choice Questions 16.Which of the following is not a typical reason why people evaluate a government's financial condition?  A. Prevent financial crises from developing. B. Hold management accountable for the use of tax revenues. C. Determine if the government can continue to offer the current level of services. D. Determine.
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True / False Questions 51.Under GASB standards, only proprietary funds prepare a statement of cash flows.  52.Similar in purpose to the International Accounting Standard Board (IASB), there is also an International Public Sector Accounting Standards Board.  53.The General Fund data for a blended component unit should be reported as a special.
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Essay Questions 78."Infrastructure assets (e.g., roads, bridges, curbs and gutters, streets, etc.) need not be capitalized since they are immovable and not likely to be stolen." Do you agree or disagree? Explain your answer. 79."Capital projects funds are established by a government to account for all plant or equipment acquired by.
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27.A measure of whether the government lived within its means in the measurement year, or was required to use prior year resources to fund a portion of current year costs, or shifted the funding of some current year costs to future periods, is  A. Business-type activities revenues/business-type activities expenses. B..
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11.Fiduciary activities are not reported in the government-wide financial statements under GASB standards.  12.Other comprehensive bases of accounting (OCBOA) are considered generally accepted accounting principles (GAAP) for state and local governments.  13.In converting from the modified accrual basis of accounting information in a governmental fund to accrual basis for the.
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76.If general capital assets are being acquired by a government under a capital lease agreement, describe the entries that should be recorded in a governmental fund (logically, a debt service fund) for each lease payment. 79.Compute the legal debt margin for Mountain City given the following information regarding its bonded.
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11.The Encumbrances account should be used by an internal service fund in the same manner as by the General Fund. 12.Proprietary funds are accounted for in a manner similar to investor-owned businesses; among other features, the accrual basis of accounting is used and all of the capital assets used in.
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True / False Questions 1.Some of the budgeting approaches governments have experimented with as alternatives to line-item, incremental budgeting include performance budgeting, program budgeting, the planning-programming-budgeting system, and zero-based budgeting.  2.In governments, the budget has always played a role in external financial reports through the required budget-to-actual comparison schedules or statements.
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True / False Questions 1.An effective system of monitoring financial condition may permit management to identify unfavorable financial trends in sufficient time to take preventive action to avoid financial distress.  2.A tax watchdog group is an example of an intermediary that represents citizen interests.  3.The key cause of municipal financial crises.
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80.As of the fiscal year ending September 30, 2013, Crystal Beach had $10,000,000 in 5 percent serial bonds outstanding. The serial bonds pay interest semiannually on March 1 and September 1, with $500,000 in bonds being retired on each interest payment date. Resources for payment of principal are transferred from.
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27.What constitutes the basic financial statements of a government?  A. Financial section of the comprehensive annual financial report (CAFR). B. Government-wide financial statements plus notes. C. Government-wide financial statements plus fund financial statements plus notes. D. Government-wide financial statements plus fund financial statements plus notes plus required supplementary information (RSI)..
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81.Carsonville is considering the issuance of bonds to fund a capital project. For the following legally feasible bond issue alternatives, discuss the desirability of each alternative from the viewpoint of (1) the official in charge of administering capital projects funds, and (2) taxpayers responsible for repaying the bond issue. 85.If a.
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