ACCT 567 Final Exam Multiple Choice Questions

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ACCT 567 Final Exam Multiple Choice Questions
(TCO E) Which of the following resource inflows would be recorded as a revenue of a debt service fund?…

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ACCT 567 Final Exam Multiple Choice Questions 

ACCT 567 Final Exam Multiple Choice Questions

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(TCO A) On what should the government-wide financial statements report? (Points : 5)

Net position and results of the financial operations of the government as a whole.

Budgetary Compliance

The cost of government services

Fiscal accountability

(TCO A) Which of the following groups is considered a primary user of a state or local government’s general-purpose external financial statements? (Points : 5)

Managers and administrators

Employees

Special Interest Groups

Citizens

(TCO A) Which of the following statements should be prepared by all not-for-profit organizations? (Points : 5)

  • Statement of functional expenses
  • (B) Statement of revenues, expenses, and changes in net position
  • (C) Statement of financial position
  • Both A and B

(TCO B) According to GASB standards, when should transfers be recognized? (Points : 5)

When earned.

When collected in cash.

When authorized by the budget ordinance.

In the period the interfund receivable and payable arise.

(TCO C) Comparisons of budgeted versus actual revenues and expenditures are a requirement of which of the following situations? (Points : 5)

Required by GAAP for the general fund and major special revenue funds for which an annual budget has

been legally adopted.

Required by GAAP for all government fund types.

Required by GAAP for internal management reports only, they are not permitted for external financial

reporting.

It is optional under GASB standards for all funds.

(TCO C) Which of the following will increase the fund balance of a government at the end of the fiscal year?(Points : 5)

The sum of revenues and other financing sources is more than the sum of expenditures and other financing

uses.

Expenditures are more than the difference between revenues and the excess of other financing sources over

other financing uses.

Revenues are more than the sum of expenditures, other financing sources, and other financing uses.

The sum of fund balance, revenues, and other financing sources is more than the sum of expenditures and

other financing uses.

(TCO C) When the budget of a government is recorded and when appropriations exceeds estimated revenues, the budgetary fund balance account is (Points : 5)

credited at the beginning of the year and debited at the end of the year.

credited at the beginning of the year and no entry is made at the end of the year.

debited at the beginning of the year and no entry is made at the end of the year.

debited at the beginning of the year and credited at the end of the year.

(TCO D) The revenues account of a government entity is debited when (Points : 5)

The budget is recorded at the beginning of the year.

Property taxes are recorded.

The account is closed to fund balance-unassigned at the end of the year.

Property taxes are collected.

(TCO D) The General Fund used electricity provided by the city-owned electric utility (an enterprise fund of the city). The General Fund general journal entry to record the transaction will include (Points

: 5)

A debit to Due to Other Funds.

A debit to Interfund Transfers Out.

A debit to Expenses.

A debit to Expenditures.

(TCO E) During the year, a wealthy local businessman donated a building to city of Perris. The original cost of the building was $340,000. Accumulated depreciation at the date of the gift amounted to $220,000. The appraised fair market value of the donation at the date of the gift was $525,000 of which $35,000 was the value of the land on which the building was situated. At what amount should the city record this donated property in the governmental activities accounts at the government-wide level? (Points : 5)

$220,000.

$120,000.

$340,000.

$525,000.

(TCO E) Which of the following resource inflows would be recorded as a revenue of a debt service fund? (Points : 5)

Receipt of the premium on a new bond issue.

Property taxes levied by the debt service fund for debt service purposes.

Taxes collected by the General Fund and transferred to the debt service fund.

Transfer of the residual equity of a capital projects fund to the debt service fund.

(TCO E) A government enters into a capital lease for the purchase of a new fire truck. The present value of the future lease payments is $830,500 and there is a down payment at the beginning of the lease of $32,000. What amount should be recorded in the governmental activities account for the fire truck? (Points : 5)

$32,000

$830,500

$798,500

$862,500

(TCO E) Which of the following budgetary accounts is typically used by a debt service fund? (Points : 5)

Encumbrances

Encumbrances Outstanding

Estimated Uncollectible Accounts

Appropriations

(TCO G) Which of the statements concerning agency funds is a true statement? (Points : 5)

Agency funds use the same basis of accounting as permanent funds.

Agency funds are reported only on the statement of fiduciary net position.

Agency funds use the temporary accounts—Additions and Deductions.

Agency funds never receive cash.

(TCO G) What basis of accounting helps maintain the original principal of a trust? (Points : 5)

Cash basis

Accrual basis

Modified accrual basis

Legal basis

(TCO J) Which of the following items are typically reported differently between the governmental fund statements and the governmental activities column of the government-wide statements? (Points : 5)

Inventories

Cash collected on property taxes receivable

Capital outlays

Accounts Payable and other accrued expenses

(TCO J) GASB standards require that governmental fund financial statements include which of the following?(Points : 5)

  • Balance Sheet
  • Statement of activities
  • Statement of cash flows

Both A and B

(TCO J) The government-wide financial statements required by GASB standards are a (Points : 5)

statement of net position and statement of cash flows

statement of net position, statement of activities, and statement of cash flows

statement of activities and statement of cash flows

statement of net position and statement of activities

(TCO H) 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) (Points : 5)

system design weakness.

deficiency.

unacceptable reportable condition.

audit alert item.

(TCO H) Under FASB Standards, how would a not-for-profit organization recognize a conditional pledge? (Points : 5)

It would disclose the amount of the conditional pledge in the notes to the financial statements.
It would debit Pledges Receivable and credit Deferred Contributions.

It would debit Pledges Receivable and credit Contributions—Temporarily Restricted.

It would not recognize the conditional pledge until pledge conditions are substantially met.

(TCO I) Which of the following items would not affect the amounts reported in the Revenues and Gains section of the statement of activities for a private college or university? (Points : 5)

Student tuition and fees

Net assets released from restriction

Tuition and fees discounts and allowances

Deferred revenues

(TCO I) How would the estimated uncollectible tuition and fees be reported on the financial statements of a university? (Points : 5)

  • It would be reported as part of net revenue by a public university.
  • It would be reported as an operating expense by a public university.
  • It would be reported as an operating expense by a private university.

Both A and C are the proper recording methods of reporting estimated uncollectible tuition and fees.

(TCO I) The primary source of revenues for most hospitals are (Points : 5)

Investment income.

Capitation fees from health maintenance organizations.

Exchange transactions, such as fees for services.

Nonexchange transactions, such as contributions.

(TCO I) Colleges and universities often make loans to students. How would these loans be reported on the financial statements? (Points : 5)

An expense

A liability

A receivable

An investment

(TCO I) Charity service and bad debts in a public hospital that follows business-type accounting are (Points : 5)

both reported as deductions from gross patient revenue in arriving at net patient revenue.

both reported as expenses

reported differently, with charity service reported as a deduction from gross patient revenue and bad debts reported as an expense.

reported differently, with charity service disclosed in the notes to the financial statements and bad debts reported as a deduction from revenue.