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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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49.The expenditure classification "Current Expenditures" is an example of which of the following types of classifications? A. Activity. B. Character. C. Function. D. Object. 50.Comparisons of budgeted versus actual revenues and expenditures are A. Required by GAAP for the General Fund and major special revenue funds for which an annual budget has been legally.
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11.All encumbrances must be closed at year-end.  12.An encumbrance represents the estimated future liability for goods or services resulting from placing a purchase order or signing a contract.  13.GASB standards require that all state and local governments present a statement of revenues, expenditures, and changes in fund balances—budget and actual.
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58.If state law requires that local governments prepare General Fund and special revenue fund budgets on a basis that differs from the basis of accounting required by GAAP, then the budgetary comparison schedule or statements should  A. Not be included as part of the basic financial statements. B. Be included.
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39.The expenditure classification "City Attorney" is an example of which of the following types of classification? A. Function. B. Organization unit. C. Character. D. Program. 40.When the budget of a government is adopted and Estimated Revenues exceed Appropriations, the excess is  A. Credited to Budgetary Fund Balance. B. Debited to Budgetary Fund Balance. C..
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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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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 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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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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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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29.The Estimated Revenues control account of a government is credited when  A. The budgetary accounts are closed: Yes; Revenues are recorded: No B. The budgetary accounts are closed: No; Revenues are recorded: No C. The budgetary accounts are closed: No; Revenues are recorded: Yes D. The budgetary accounts are closed:.
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Multiple Choice Questions 28.Which of the following financial statement(s) reports both current and noncurrent assets and liabilities? Government-wide Statement of Net PositionGeneral Fund Balance Sheet A)NoYes B)NoNo C)YesNo D)YesYes A. Choice A B. Choice B C. Choice C D. Choice D 29.Under the dual-track accounting approach used in the text, which of the following transactions or events.
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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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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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50.Explain the nature of the three major activity categories of a state or local government: governmental activities, business-type activities, and fiduciary activities. Provide examples of each. 51.Describe the comprehensive annual financial report (CAFR) described in the Annual Financial Reports principle. What are the sections of the report and which components.
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Multiple Choice Questions 17.The accounting system used by a state or local government must make it possible  A. To present fairly the financial position and results of financial operations of the government as a whole, as well as fund financial activity in conformity with GAAP. B. To prepare financial statements as.
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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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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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True / False Questions 1.Fund-based financial statements are intended to provide detailed financial information about the governmental, business-type, and fiduciary activities of the primary government.  2.Program revenues are distinguished from general revenues on the government-wide statement of activities under GASB standards.  3.Aggregate financial information for all special revenue funds is reported.
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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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59.For what funds do budgetary comparisons need to be presented in connection with the basic financial statements? A. General Fund. B. General Fund and all major funds. C. All governmental funds with legally adopted annual budgets. D. General Fund and major special revenue funds for which a budget is legally adopted. 60.When computers are.
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27.Which of the following is a proprietary fund?  A. Special revenue fund. B. Investment trust fund. C. Debt service fund. D. Internal service fund. 28.Which of the following is a fiduciary fund? A. Investment trust fund. B. Special revenue fund. C. Debt service fund. D. Enterprise fund. 29.Which of the following funds would be.
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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.The government-wide statement of net position uses the same measurement focus and basis of accounting used by the General Fund balance sheet.  2.The Governmental Activities column of the government-wide statement of net position differs from the General Fund balance sheet in that it reports both current and.
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True / False Questions 1.General capital assets should be distinguished from capital assets that are specifically associated with activities financed by proprietary and fiduciary funds, since capital assets acquired by proprietary and fiduciary funds are accounted for by those funds.  2.GASB standards require that all governmental expenditures for long-lived assets be.
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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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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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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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Essay Questions 76.The Board of Aldermen of Fitchburg approved the appropriations budget for its General Fund for the year ending December 31, as shown below. 1) Explain the legal significance of an appropriation and why auditors engaged for a financial and compliance audit need to know the meaning of the term. 2) It.
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Short Answer Questions 44.The following are categories of funds described in Chapter 2: A. Governmental funds B. Proprietary funds C. Fiduciary funds For each of the following descriptive phrases, indicate the type of fund from the list above that best matches by placing the appropriate letter in the blank space next to the phrase. Essay Questions 45.Explain.
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Multiple Choice Questions 19.Which of the following best describes the recommended format for the government-wide statement of activities?  A. Program revenues minus expenses minus other revenues and expenses equals change in net position. B. Program revenues plus general revenues minus expenses equals change in net position. C. Program revenues minus expenses.
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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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21.Fines and forfeits are reported as charges for services on the government-wide statement of activities.  22.A payment made by a city-owned utility to the General Fund of the city in lieu of taxes is an example of an "internal exchange transaction."  23.Amounts due to or from other funds should be.
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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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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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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.Generally, encumbrance accounting is not used in the accounting for payroll.  12.Governments, unlike business organizations, generally do not incur expenditures/expenses for the employer's share of FICA taxes and for contributions to other retirement plans established by law.  13.Under the modified accrual basis of accounting applicable to governmental fund types, revenue.
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37.Which of the following funds are proprietary funds? A. Enterprise funds, investment trust funds, pension trust funds, and the General Fund. B. Enterprise funds and internal service funds. C. Internal service funds, special revenue funds, and enterprise funds. D. Proprietary funds are not used in governmental accounting. 38.Which of the following funds are governmental.
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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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