1.99 See Answer

Question: A purchase order for $3,000 is


A purchase order for $3,000 is recorded in the general fund for the purchase of a new computer. The computer is received at an actual cost of $3,020. Which of the following statements is correct?
a. Machinery is increased in the general fund by $3,020.
b. An encumbrance account is reduced by $3,020.
c. An expenditure is increased by $3,020.
d. An expenditure is recorded for the additional $20.


> Which of the following statements is correct about the reporting of governmental funds? a. Fund financial statements measure revenues and expenditures based on modified accrual accounting. b. Government-wide financial statements measure revenues and ex

> Which of the following statements is correct about the reporting of governmental funds? a. Fund financial statements measure economic resources. b. Government-wide financial statements measure only current financial resources. c. Fund financial stateme

> A citizen of the City of Townsend makes a donation of $22,000 in investments. The citizen has stipulated that the investments be held. Any resulting income must be used to help maintain the city’s cemetery. In which fund should this asset be reported? a

> Which of the following statements is true? a. There are three different types of proprietary funds. b. There are three different types of fiduciary funds. c. There are five different types of fiduciary funds. d. There are five different types of gove

> The City of Danmark is preparing financial statements. Officials are currently working on the statement of activities within the government-wide financial statements. A question has arisen as to whether a particular revenue should be identified on govern

> Officials for the City of Artichoke, West Virginia, have recently formed a transit authority to create a public transportation system for the community. These same officials are now preparing the city’s CAFR for the most recent year. The transit authorit

> The City of Hampshore is currently preparing financial statements for the past fiscal year. The city manager is concerned because the city encountered some unusual transactions during the current fiscal period and is unsure as to their handling. Require

> A city orders a new computer for its general fund at an anticipated cost of $88,000. Its actual cost when received is $89,400. Payment is subsequently made. Prepare all required journal entries for both fund and government-wide financial statements. What

> The City of Abernethy has three large bridges built in the later part of the 1980s that were not capitalized at the time. In creating government-wide financial statements, the city’s accountant is interested in receiving suggestions as to how to determin

> Search the Internet for the official website of one or more state or local governments. On this website, determine whether the latest comprehensive annual financial report (CAFR) is available. For example, a recent comprehensive annual financial report f

> Obtain a copy of the original version of GASB Statement 34. Read paragraphs 239 through 277. Required Write a report describing alternatives that the GASB considered when it created Statement 34. Indicate the alternative that you would have viewed as m

> The City of Larissa recently opened a solid waste landfill to serve the area’s citizens and businesses. The city’s accountant has gone to city officials for guidance as to whether to record the landfill within the general fund or as a separate enterprise

> Go to the website www.gasb.org and click on “About Us” included in the list that runs across the top of the page. Then click on “Mission, Vision, and Core Values.” Read the information provided by GASB. Required Assume that a financial analyst with who

> Read the following articles and any other papers that are available on setting governmental accounting standards: “The Governmental Accounting Standards Board: Factors Influencing Its Operation and Initial Technical Agenda,” Government Accountants Journa

> Go to the website www.gasb.org and click on “Projects” included in the list that runs across the top of the page. Then click on “Current Projects & Pre-Agenda Research.” Click on one of the current projects that is listed. Read the sections that are titl

> Search the Internet for the official website of one or more state or local governments. After reviewing this website, determine whether the latest comprehensive annual financial report (CAFR) is available on the site. For example, the most recent compreh

> Go to www.phoenix.gov and do a search for the term “CAFR.” Those results should lead to the latest CAFR for the City of Phoenix, Arizona. The financial statements for a state and local government must include a Management’s Discussion and Analysis of the

> Read the following journal article: “25 Years of State and Local Governmental Financial Reporting— An Accounting Standards Perspective,” The Government Accountants Journal, Fall 1992. Or, as an alternative possibility, do a search of books in the college

> The board of commissioners of the City of Hartmoore adopted a general fund budget for the year ending June 30, 2017, that included revenues of $1,000,000, bond proceeds of $400,000, appropriations of $900,000, and operating transfers out of $300,000. If

> At what point in time does a governmental fund report an expenditure?

> A city starts a solid waste landfill that it expects to fill to capacity gradually over a 10-year period. At the end of the first year, it is 8 percent filled. At the end of the second year, it is 19 percent filled. Currently, the cost of closure and pos

> A city starts a solid waste landfill that it expects to fill to capacity gradually over a 10-year period. At the end of the first year, it is 8 percent filled. At the end of the second year, it is 19 percent filled. Currently, the cost of closure and pos

> A city starts a solid waste landfill that it expects to fill to capacity gradually over a 10-year period. At the end of the first year, it is 8 percent filled. At the end of the second year, it is 19 percent filled. Currently, the cost of closure and pos

> A city creates a solid waste landfill. It assesses a charge to every person or company that uses the landfill based on the amount of materials contributed. In which of the following will the landfill probably be recorded? a. General fund. b. Special re

> Which of the following is most likely to be true about the financial reporting of a public college or university? a. It resembles the financial reporting of private colleges and universities. b. It will continue to use its own unique style of financial

> Which of the following is true about the statement of cash flows for the proprietary funds of a state or local government? a. The indirect method of reporting cash flows from operating activities is allowed although the direct method is recommended. b.

> Government-wide financial statements make a distinction between program revenues and general revenues. How is that difference shown? a. Program revenues are offset against the expenses of a specific function; general revenues are assigned to governmenta

> A government reports that its public safety function had expenses of $900,000 last year and program revenues of $200,000 so that its net expenses were $700,000. On which financial statement is this information presented? a. Statement of activities. b.

> An employment agency for individuals with disabilities works closely with the City of Hanover. The employment agency is legally separate from the city but still depends on it for financial support, which leads to a potential financial burden for the city

> How are interfund transfers reported in fund financial statements?

> An accountant is trying to determine whether the school system of the City of Abraham is fiscally independent. Which of the following is not a requirement for being deemed fiscally independent? a. Holding property in its own name. b. Issuing bonded deb

> Which of the following is not necessary for a special purpose local government to be viewed as a primary government for reporting purposes? a. It must have a separately elected governing body. b. It must have specifically defined geographic boundaries.

> Assume in Problem 12 that the city reports the work as a capital asset. Which of the following is true? a. Depreciation is not recorded because the city has no cost. b. Depreciation is not required if the asset is viewed as being inexhaustible. c. Dep

> In Problem 12, which of the following statements is true about reporting a revenue in connection with this gift? a. A revenue will be reported. b. Revenue is reported but only if the asset is reported. c. If the asset is not capitalized, no revenue sh

> Cash of $20,000 is transferred from the general fund to the enterprise fund to pay for work that was done. What is reported on the fund financial statements? a. No reporting is made. b. Other Financing Sources increase by $20,000; Other Financing Uses

> Cash of $20,000 is transferred from the general fund to the enterprise fund to pay for work that was done. What is reported on the government-wide financial statements? a. No reporting is made. b. Other Financing Sources increase by $20,000; Other Fina

> Cash of $60,000 is transferred from the general fund to the debt service fund. What is reported on the fund financial statements? a. No reporting is made. b. Other Financing Sources increase by $60,000; Other Financing Uses increase by $60,000. c. Rev

> Cash of $60,000 is transferred from the general fund to the debt service fund. What is reported on the government-wide financial statements? a. No reporting is made. b. Other Financing Sources increase by $60,000; Other Financing Uses increase by $60,0

> Which of the following is an example of an interactivity transaction? a. Money is transferred from the general fund to the debt service fund. b. Money is transferred from the capital projects fund to the general fund. c. Money is transferred from the

> A city constructs curbing in a new neighborhood and finances it as a special assessment. Under what condition should these transactions be recorded in an agency fund? a. Never; the work is reported in the capital projects funds. b. Only if the city is

> On January 1, 2017, a rich citizen of the Town of Ristoni donates a painting valued at $300,000 to be displayed to the public in a government building. Although this painting meets the three criteria to qualify as an artwork, town officials choose to rec

> A city constructs a special assessment project (a sidewalk) for which it is secondarily liable. The city issues bonds of $90,000. It authorizes another $10,000 that is transferred out of the general fund. The sidewalk is built for $100,000. The citizens

> A $110,000 payment is made on a long-term liability. Of this amount, $10,000 represents interest. Which of the following is not true for the recording of this transaction? a. Reduce liabilities by $100,000 in the government-wide financial statements. b.

> The City of Frost has a 20-year debt outstanding. On the last day of the current year, this debt has an outstanding balance of $4.8 million and five years remaining until it is due. On that date, the debt is paid off early for $5 million. A new debt is i

> The City of Dylan issues a 10-year bond payable of $1 million at face value on the first day of Year 1. Debt issuance costs of $10,000 are paid on that day. For government-wide financial statements, how is this debt issuance cost reported? a. $1,000 is

> The City of Bacon is located in the County of Pork. The city has a school system and reports buildings at a net $3.6 million although they are actually worth $4.2 million. The county has another school system and reports buildings at a net $5.2 million a

> The state government passes a law requiring localities to upgrade their water treatment facilities. The state then awards a grant of $500,000 to the Town of Midlothian to help pay for this cost. What type of revenue is this grant? a. Derived tax revenue

> The City of Nomanchester has a defined benefit pension plan for a number of its employees. A pension trust fund has been set up that currently has a net position of $32.7 million because quite a number of investments are being held. An actuary estimates

> A city builds sidewalks throughout its various neighborhoods at a cost of $2.1 million. Which of the following is not true? a. Because the sidewalks qualify as infrastructure, the asset is viewed in the same way as land so that no depreciation is record

> Which of the following statements is true concerning the recording of a budget? a. At the beginning of the year, debit Appropriations. b. A debit to the Budgetary Fund Balance account indicates an expected surplus. c. At the beginning of the year, deb

> The City of Columbus has approximately 2,000 employees. For the past three decades, the city has provided its employees with a defined benefit pension plan. The plan contract calls for specific payment amounts to be made to each retiree based on a set fo

> During the current year, a government buys land for $80,000. Which of the following is not true? a. The land could be reported as an asset by the business-type activities in the government-wide financial statements. b. The land could be reported as an

> What is the most common form for the financial statements prepared by public colleges and universities?

> In government-wide financial statements, how do intra-activity and interactivity transactions differ? How is each type of transaction reported?

> The City of Dickens has a fiscal year ending December 31, Year 5. The city council is viewed as the highest level of decision-making authority for the government. For each of the following, indicate whether the overall statement is true or false. Assume

> A city starts a public library that has separate incorporation and gets some of its money for operations from the state and some from private donations. Indicate whether each of the following independent statements is true or false and briefly explain ea

> A city receives a copy of its original charter from the year 1799 as a gift from a citizen. The document will be put under glass and displayed in the city hall for all to see. The fair value is estimated at $10,000. Indicate whether each of the following

> Use the same information as in problem 44 except that, by the end of Year 3, the landfill is 40 percent filled. The city now realizes that the total closure costs will be $3 million. Indicate whether each of the following independent statements is true o

> A city has a solid waste landfill that was filled 12 percent in Year 1 and 26 percent in Year 2. During those periods, the government expected that total closure costs would be $2 million. As a result, it paid $50,000 to an environmental company on July

> Assume that the one component unit had program revenues of $30,000 and expenses of $42,000 and spent $10,000 for land during Year 4. However, it should have been handled as a blended component unit, not as a discretely presented component unit. According

> On the first day of Year 4, the city receives a painting as a gift that qualifies as a work of art. It has a 30-year life, is worth $15,000, and is being displayed at one of the local parks. The accountant accidentally capitalized and depreciated it alth

> The City of Lawrence opens a solid waste landfill in 2017 that is at 54 percent of capacity on December 31, 2017. The city had initially anticipated closure costs of $2 million but later that year decided that closure costs would actually be $2.4 million

> The following information pertains to the City of Williamson for 2017, its first year of legal existence. For convenience, assume that all transactions are for the general fund, which has three separate functions: general government, public safety, and h

> The County of Maxnell decides to create a sanitation department and offer its services to the public for a fee. As a result, county officials plan to account for this activity within the enterprise funds. Prepare journal entries for this operation for th

> The City of Francois, Texas, has begun the process of producing its current comprehensive annual financial report (CAFR). Several organizations that operate within the city are related in some way to the primary government. The city’s accountant is attem

> A city government adds street lights within its boundaries at a total cost of $300,000. The lights should burn for at least 10 years but can last significantly longer if maintained properly. The city sets up a system to monitor these lights with the goal

> Assume that the City of Coyote has already produced its financial statements for December 31, 2017, and the year then ended. The city’s general fund was only for education and parks. Its capital projects funds worked with each of these functions at times

> Assume that the City of Coyote has already produced its financial statements for December 31, 2017, and the year then ended. The city’s general fund was only for education and parks. Its capital projects funds worked with each of these functions at times

> Assume that the City of Coyote has already produced its financial statements for December 31, 2017, and the year then ended. The city’s general fund was only for education and parks. Its capital projects funds worked with each of these functions at times

> Assume that the City of Coyote has already produced its financial statements for December 31, 2017, and the year then ended. The city’s general fund was only for education and parks. Its capital projects funds worked with each of these functions at times

> Assume that the City of Coyote has already produced its financial statements for December 31, 2017, and the year then ended. The city’s general fund was only for education and parks. Its capital projects funds worked with each of these functions at times

> Assume that the City of Coyote has already produced its financial statements for December 31, 2017, and the year then ended. The city’s general fund was only for education and parks. Its capital projects funds worked with each of these functions at times

> On January 1, 2017, the City of Hastings created a solid waste landfill that it expects to reach capacity gradually over the next 20 years. If the landfill were to be closed at the current time, closure costs would be approximately $1.2 million plus an a

> Assume that the City of Coyote has already produced its financial statements for December 31, 2017, and the year then ended. The city’s general fund was only for education and parks. Its capital projects funds worked with each of these functions at times

> Fund A transfers $20,000 to Fund B. For each of the following, indicate whether the statement is true or false and, if false, explain why. a. If Fund A is the general fund and Fund B is an enterprise fund, nothing will be shown for this transfer on the

> Indicate (i) how each of the following transactions impacts the fund balance of the general fund, and its classifications, for fund financial statements and (ii) what impact each transaction has on the net position balance of the Government Activities on

> On December 1, 2017, a state government awards a city government a grant of $1 million to be used specifically to provide hot lunches for all schoolchildren. No money is received until June 1, 2018. For each of the following, indicate whether the stateme

> Government officials of the City of Jones expect to receive general fund revenues of $400,000 in 2017 but approve spending only $380,000. Later in the year, as they receive more information, they increase the revenue projection to $420,000. Officials als

> Use the transactions in problem (47) but prepare a statement of net position for the government wide financial statements. Assume that the general fund had $180,000 in cash on the first day of the year and no other assets or liabilities. No amount was re

> The following transactions relate to the General Fund of the city of Lost Angels for the year ending December 31, 2017. Prepare a statement of revenues, expenditures, and other changes in fund balance for the general fund for the period to be included in

> The City of Gargery has a fiscal year ending December 31, Year 5. If the city were to produce financial statements right now, the following figures would be included: – Governmental activities: Assets = $800,000, Liabilities = $300,000, and Change in Ne

> The City of Havisham has a fiscal year ending December 31, Year 5. If the city were to produce financial statements right now, the following figures would be included: – Governmental activities: Assets = $800,000, Liabilities = $300,000, and Change in N

> A city has only one activity, its school system. The school system is accounted for within the general fund. For convenience, assume that, at the start of 2017, the school system and the city have no assets. During the year, the city assessed $400,000 in

> What is a special assessment project? How are special assessment projects reported?

> On the first day of the year, the City of Wolfe bought $20,000 of equipment with a 5-year life and no salvage value for its school system. It was capitalized but no other entries were ever made. The machine was monitored using the modified approach. a.

> The city maintains a landfill that has been recorded during the current year within its parks. The landfill generated program revenues of $4,000 in Year 4 and cash expenses of $15,000. It also paid $3,000 cash for a piece of land. These transactions were

> Following are descriptions of transactions and other financial events for the City of Tetris for the year ending December 2017. Not all transactions have been included here. Only the general fund formally records a budget. No encumbrances were carried ov

> The following unadjusted trial balances are for the governmental funds of the City of Copeland prepared from the current accounting records: Based on the information presented for each of these governmental funds, answer the following questions: a. How

> For each of the following, indicate whether the statement is true or false and include a brief explanation for your answer. a. A pension trust fund appears in the government-wide financial statements but not in the fund financial statements. b. Permane

> Use the information in problem 37 to prepare the 2017 fund financial statements for the governmental funds and the proprietary funds. A statement of cash flows is not required. Assume that “available” is defined as within 60 days and that all funds are m

> The City of Pfeiffer starts the year of 2017 with the general fund and an enterprise fund. The general fund has two activities: education and parks/recreation. For convenience, assume that the general fund holds $123,000 cash and a new school building co

> The City of Bernard starts the year of 2017 with the following unrestricted amounts in its general fund: cash of $20,000 and investments of $70,000. In addition, it holds a small building bought on January 1, 2016, for general government purposes for $30

> When is a receivable recognized for property tax assessments? When is the revenue recognized?

> What are the four classifications of nonexchange revenues that a state or local government can recognize? In each case, when are revenues normally recognized?

> What are the two different ways that supplies and prepaid items can be recorded on fund financial statements?

> The governmental funds of the City of Westchester report $445,000 in assets and $140,000 in liabilities. The following are some of the assets reported by this government. ∙ Prepaid items—$7,000. ∙ Cash from a bond issuance that must be spent within the

> How do governmental funds report capital outlay in fund financial statements? How do government-wide financial statements report capital expenditures?

> A city issues a 60-day tax anticipation note to fund operations until taxes have been collected. What recording should it make? a. The liability should be reported in the government-wide financial statements; an other financing source should be shown in

> The state awards a grant of $50,000 to the Town of Glenville. The state will pay the grant money to the town as a reimbursement for money spent on road repair. At the time of the grant, the state pays $8,000 in advance. During the first year of this prog

> When is an encumbrance recorded? What happens to this balance? How are encumbrances reported in government-wide financial statements?

1.99

See Answer