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35.Which of the following is a measure of the extent to which the government's business-type activities are self-supporting? A.Unrestricted net position/total revenues. B.Business-type activities revenues/business-type activities expenses. C.Total net position (governmental activities and business-type activities) less total net position at the beginning of the year. D.Total revenues/total expenses. 36.A measure of whether the government lived.
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36.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). 37.Which of the following.
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52.Distinguish and describe key financial performance concepts, such as financial position, financial condition, and economic condition. 53.Explain the relationships among environmental factors, organizational factors, and financial factors in determining government financial condition. 54.Describe how financial performance is related to the operating performance of a government entity. 10-1 .
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65.Explain why other comprehensive bases of accounting (OCBOA) may be used by a state or local government instead of GASB standards which are generally accepted accounting principles (GAAP). 66.Describe some items requiring adjustments when modified accrual basis accounting information must be converted to accrual basis accounting in preparation of government-wide.
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21.GASB requires the statement of cash flows for proprietary funds to be prepared using the direct method of presentation. 22.Unlike the General Fund and other major governmental funds for which a budget is legally adopted, proprietary funds are not required by GASB standards to record budgets in their accounting systems,.
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11.Cash solvency is the government's long-run ability to pay all the costs of doing business. 12.Political culture, one of the environmental factors affecting financial condition, includes such factors as form of government and the entity's economic, political, and social history. 13.Fiscal capacity is the government's ongoing ability and willingness to supply the.
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74.What are the alternative methods of dissolving an internal service fund? 75.During the fiscal year ended September 30, 2017, the following transactions (summarized) occurred in the Town of Berthoud Information Technology Internal Service Fund: 1. Employees were paid $290,000 wages in cash. 2. Utility bills received from the Town of Berthoud’s.
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Short Answer Questions 56.The following are key terms in Chapter 8 that relate to accounting for pension plans. A. Agent multiple-employer pension plan B. Cost-sharing multiple-employer pension plan C. Covered payroll D. Defined benefit plan E. Defined contribution plan F. Net pension liability G. Service cost H. Total pension liability For each of.
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41.Which of the following is not a required component of the audit report for a single audit? A.A report on internal control over financial reporting and compliance with federal statutes, regulations, and the terms and conditions of the federal award. B.An opinion on the completeness of the schedule of expenditures. C.A report on.
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46.The comprehensive annual financial report (CAFR) of a government should contain a statement of revenues, expenses, and changes in net position for : A.Both proprietary and governmental funds. B.Governmental but not proprietary funds. C.Proprietary but not governmental funds. D.Both proprietary and fiduciary funds. 47.Which of the following items are typically.
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Multiple Choice Questions 26.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.To provide information.
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55.Discuss how despite significant improvements in the quality of government financial reporting over the years there are still serious, high profile public sector financial crises. How does the quality of financial reporting affect the ability to evaluate financial condition? 56.How do the objectives of evaluating financial condition differ between internal managers.
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Multiple Choice Questions 31.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. 32.Which of the following properly portrays the components of net position for proprietary funds? A.Net investment in.
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41.Which of the following is not true regarding proprietary funds? A.The difference between assets plus deferred outflows of resources and liabilities plus deferred inflows of resources of proprietary funds is called "net assets." B.Proprietary funds record long-term debt directly in the fund accounts. C.Proprietary funds record capital assets directly in.
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Essay Questions 60."Interim financial reports are needed for state and local governments even though external users of financial reports have no need to assess monthly or quarterly performance of the government." Do you agree? Why or why not? 61.What is meant by the term "reporting entity" in accounting for state and.
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31.Threats to independence include all of the following except: A.Bias threat. B.Familiarity threat. C.Undue influence threat. D.Management representation threat. 32.Typical objectives of a performance audit include: A.Determining whether financial statements fairly present the entity's operational results. B.Judging the appropriateness of an entity's program goals. C.Determining whether financial statements fairly present in conformity with GAAP. D.Assessing effectiveness and results, economy.
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46.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. 47.A donor contributed $500,000 to the city stipulating that the money be invested and that the earnings thereon be used for maintenance of the a band.
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Multiple Choice Questions 25.Which of the following is not a typical reason for evaluating 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 whether residents will receive dividends. 26.Which of the following terms.
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Short Answer Questions 66.The following are key terms in Chapter 7 that relate accounting for the business-type activities of state and local governments: A. Allowance for Funds Used during Construction B. Revenue bonds C. Utility plant acquisition adjustment D. Regulatory accounting principles E. Original cost F. Historical cost G. General obligation bonds.
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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.A statement of cash flows is prepared for enterprise funds but not for internal service.
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59.Explain the purpose of the account "undistributed change in fair value of investments" used in a cash and investment pool. 60.Describe the types of pension plans most often found in governmental entities and the differences between them. 61.Briefly describe how GASB Statements 67 and 68 compare to prior pension accounting.
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68.How does the statement of cash flows under GASB standards differ from the statement of cash flows under FASB standards? 69.Legislators often believe an internal service fund function will not be subjected to annual legislative budget review and the legislature will "lose control" of the fund. Do you agree with.
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75.As of December 31, 2016, Westport had $9,500,000 in 4.5 percent serial bonds outstanding. The serial bonds pay interest semiannually on July1 and December 31, with $500,000 in bonds being retired on each interest payment date. Resources for payment of principal and interest are transferred from the General Fund. Prepare.
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True / False Questions 1.In accounting practice, the legalistic distinctions between trust funds and agency funds are not of major significance. 2.Trust funds often exist over a longer period of time than agency funds, represent and develop vested interests of a beneficiary to a greater extent, and involve more complex administration.
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51.When utility customers are billed during the year, the enterprise fund journal entry will include: A.A debit to Sales of Water. B.A debit to Cash - Restricted. C.A debit to Customer Accounts Receivable. D.All of the above. 52.When a new utility customer submits a deposit, the enterprise fund journal entry.
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Short Answer Questions 48.Identify the following factors that affect financial condition as environmental factors (E) or financial factors (F). FactorE or F 1.Community needs and resources_____________ 2.Disaster risk_____________ 3.Revenues_____________ 4.Intergovernmental constraints_____________ 5.External economic conditions_____________ 6.Expenditures_____________ 7.Debt Structure_____________ 8.Political culture_____________ 9.Unfunded liabilities_____________ 10.Condition of capital plant_____________ 11.Operating position_____________ 49.Match the following financial ratios that are based on comprehensive annual financial report (CAFR) information with the.
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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.The introductory paragraph of the auditor's report should identify the financial statements being audited and, in.
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59.The following transactions relate to the City of Middleton, which has a fiscal year end of December 31. The city adopts budgets for the General Fund and the debt service fund.NOTE: for simplicity, and contrary to GASB standards, assume straight-line amortization for this problem. 1. The City of Middleton sells a.
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11.Other comprehensive bases of accounting (OCBOA) are considered generally accepted accounting principles (GAAP) for state and local governments. 12.In reconciling between the governmental fund and government-wide statements, capital assets acquired by a governmental fund are deducted from fund balance—governmental funds to arrive at net position of governmental activities. 13.A discretely.
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59."Benchmarking is a simple method for comparing one government to another." Do you agree or disagree with this statement? Explain. 60.Describe some ratios that can be calculated using the basic financial statements that will help a decision maker assess the financial position of the government. 10-1 .
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True / False Questions 1.In order for users of financial statements to have the assurance that the statements have been prepared in conformity with accounting and financial reporting standards established by authoritative bodies, and that all material facts have been disclosed, the statements should be accompanied by the report of an.
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True / False Questions 1.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 supplementary information. 2.State and local governments should prepare only those financial.
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63.Describe what the government-wide statements are intended to convey to readers and contrast with the intent of the fund financial statements. 64.Describe the alternative processes for capturing the financial accounting information required for government-wide financial statements. 9-1 .
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Multiple Choice Questions 26.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. 27.Which of the following statements regarding the financial reporting of agency funds is not true? A.Agency activities are reported only in the fiduciary fund.
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Short Answer Questions 55.The following are key terms in Chapter 11 that relate to auditing of governmental and not-for-profit organizations: A. Attestation engagement B. Generally accepted auditing standards (GAAS) C. Opinion units D. Materiality E. Financial audit F. Generally accepted government auditing standards (GAGAS) G. Performance audits For each of the following.
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57."Financial statements are virtually useless in evaluating a city's financial condition." Do you agree with this statement? Why or why not? 58.How do credit analysts assist decision makers in evaluating the credit worthiness of a state or local government? 10-1 .
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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 is the.
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56.The following are key terms in Chapter 11 that relate to single audits: A. Risk-based approach B. Single audit C. Questioned cost D. Material weakness E. Oversight agency F. Major programs G. Cognizant agency H. Significant deficiency For each of the following definitions, indicate the key term from the list above that.
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72.Explain the difference between operating revenues/expenses and nonoperating revenues/expenses. Why does the GASB require that operating revenues/expenses be reported separately on proprietary statements of revenues, expenses, and changes in fund net position? 73.Explain how capitalization of interest costs differs for enterprise funds as opposed to governmental funds. 7-1 .
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Short Answer Questions 57.The following are key terms in Chapter 9 that relate to the reporting entity: A. Component unit B. Financial reporting entity C. Financial accountability D. Joint venture E. Other stand-alone government F. Primary government For each of the following definitions, indicate the key term from the list above that.
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63.On January 1, Forrester County is holding investments for Tinsel Town valued at $500,000 in an investment pool, accounted for in an investment trust fund. On January 1, Valley School District invests $1,500,000 in the pool. Earnings on pooled investments for the six months ended June 30 totaling $300,000 were.
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11.In regard to pass-through grants, a recipient government has administrative involvement if it is responsible for filing paperwork under a grant agreement. 12.When an investment pool is created, the assets of each fund entering the pool should be transferred to the pool at their fair value at the date of.
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70."Enterprise funds should not be permitted to accumulate unrestricted net position, since to do so would indicate overpricing of its services." Do you agree? Why or why not? 71.In some local government financial reports you will find activities such as solid waste disposal and sewage disposal accounted for as a.
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11.A motor pool is a common example of an internal service fund. 12.An employee pension fund is a common example of an internal service fund. 13.Proprietary funds follow the current financial resources measurement focus and use the accrual basis of accounting. 14.Public utilities owned and operated by governments are common examples.
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Multiple Choice Questions 21.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). 22.Governments and not-for-profit entities may be subject to each of the following levels of audit except: A.Requirements under AICPA generally accepted auditing standards. B.Requirements under.
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Essay Questions 57.If a city has a responsibility for endowed resources, how would city management decide whether to account for the resources in a permanent fund or a trust fund? How does financial reporting of the funds differ? 58.Why do agency funds have no fund equity? What classes of accounts are.
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50.The following are key terms in Chapter 10 that relate to analysis of governmental financial performance: A. Benchmarking B. Budgetary solvency C. Cash solvency D. Economic condition E. Financial condition F. Financial position G. Fiscal capacity H. Long-run solvency I. Service capacity J. Service-level solvency For each of the following definitions,.
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