General Fund, special revenue funds, capital projects funds, debt service funds, and private-purposetrust fund.. General Fund, special revenue funds, capital projects funds, debt service
Trang 1True False
4 Governments that are temporarily short of cash but that have levied taxes expected to be collectibleduring the fiscal year are generally able to borrow on short-term notes known as "tax anticipation notespayable"
True False
5 In order to account correctly for the receipt of goods or services ordered in a prior fiscal year it is
necessary to know which appropriations were affected when the encumbrance documents were issued.True False
6 When purchase orders or contracts are issued for legally authorized purposes a record must be kept, but
no entries in the General Fund or special revenue fund accounts are necessary
Trang 211 Under current GASB standards the revenue from property taxes should be recorded in the period and inthe amounts in which taxes are collected.
True False
14 A government that uses the encumbrance method for purchases of goods and services is not required to
use encumbrance accounting for its payrolls
True False
15 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.True False
16 An interim balance sheet for the General Fund reflects balances of budgetary control accounts andbalances of operating statement control accounts, as well as assets, liabilities, and fund equity
True False
17 A statement comparing the detailed budgeted revenues with actual revenues to the date of the interimbalance sheet should accompany the interim balance sheet in order to disclose the detail of amountsshown in summary in the resources section of the balance sheet
True False
18 A statement comparing the detail of appropriations, expenditures, and encumbrances should accompany
an interim balance sheet in order to disclose the detail of the amount shown in summary in the
appropriations subdivision of the fund equity section of the interim balance sheet
True False
19 Whenever a tax or other revenue source is authorized by a legislative body to be used for a specifiedpurpose only, a special revenue fund should be established
True False
20 Interfund transactions that would result in the recognition of revenues, expenditures, or expenses, if one
of the parties were external to the government, should be reported as fund revenues, expenditures, orexpenses
True False
21 Although a governmentally owned utility may receive police and fire protection and other services fromgovernmental departments financed by "governmental" funds, such a utility is exempt from taxes andshould not pay the General Fund anything for services received
True False
Trang 322 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."
True False
23 Interfund loans and advances should be eliminated from the accounts of the debtor fund and from theaccounts of the creditor fund so the annual financial statements of the government will show onlyreceivables from and payables to external individuals or organizations
27 A transfer of General Fund assets to create an internal service fund that is not expected to repay the
assets is an example of an interfund transfer
True False
28 Which of the following is properly reported as a liability of the General Fund?
A General obligation bonds payable
B Accounts payable
C Tax anticipation notes payable
D Both B and C are correct
29 When a vehicle is ordered by a government, the purchase order should be recorded in the General Fund
30 In an interim balance sheet of a governmental fund, the fund equity section would not include
A Reserve for encumbrances
B Contributed capital
C Reserve for inventory
D Available appropriations
Trang 431 The Town of Woodhaven levied property taxes in the amount of $800,000 The Town estimates that 1percent will be uncollectible The journal entry to record the tax levy will include
A A debit to cash for $792,000
B A credit to revenues for $792,000
C A debit to estimated uncollectible current taxes for $8,000
D A debit to estimated revenues for $800,000
32 An interfund transfer should be reported in a governmental fund operating statement as a (an)
A Revenue or expenditure
B Due from or due to other funds
C Change in fund balance
D Other financing source or use
33 The City of Oldetown purchased a vehicle for the police department If the operations of the policedepartment are financed by general revenues, the purchase would be recorded in which funds and/oractivities?
A General Fund: Yes; Governmental Activities: No
B General Fund: No; Governmental Activities: No
C General Fund: Yes; Governmental Activities: Yes
D General Fund: No, Governmental Activities: Yes
34 The General Fund has transferred cash to the appropriate fund for eventual retirement of term bondsmaturing in 10 years Which funds would record this transaction?
A General Fund: Yes; Capital Projects Fund: No; Debt Service Fund: Yes
B General Fund: No; Capital Projects Fund: No; Debt Service Fund: Yes
C General Fund: Yes; Capital Projects Fund: No; Debt Service Fund: No
D General Fund: Yes; Capital Projects Fund: Yes; Debt Service Fund: Yes
35 Using the information below, what amount should be accounted for in a special revenue fund or funds?
A $1,800,000
B $2,100,000
C $3,300,000
D $5,350,000
Trang 536 Which of the following would be considered an internal exchange or quasi-external transaction?
A The General Fund transfers $200,000 to establish a Central Supplies Fund; this amount will not berepaid
B The General Fund transfers $125,000 to the Debt Service Fund for payment of currently due bondinterest payments
C The General Fund receives supplies from the Central Supplies Fund in the amount of $9,000
D The Capital Projects Fund completes a library building project and transfers the remaining cash to theDebt Service Fund
37 Which of the following would be reflected in the operating statement of a governmental fund?
A Incurrence of a liability for vacation leave for employees
B Amortization expense
C Depreciation expense
D Revenue related to prior periods
38 The General Fund recorded a liability to the city-owned electric utility (an enterprise fund of the city) forelectricity used during the prior month The journal entry for the General Fund will include
A A debit to Encumbrances
B A debit to Interfund Transfers Out
C A debit to Expenditures
D None of the above
39 Which of the following accounts appears on both the interim and year-end balance sheets of the GeneralFund?
A A credit to revenues in the amount of $300,000
B A credit to deferred revenues in the amount of $300,000
C A debit to grants receivable in the amount of $300,000
D No journal entry will be made until eligibility requirements are met by expending resources for theauthorized purpose(s)
41 Which of the following best describes the proper treatment for uncollectible amounts of tax revenue?
A Report bad debt expense
B Report revenue net of uncollectible amounts
C Report bad debt expenditures
D Report deferred revenue
42 The Revenues account of a government is debited when
A The budget is recorded at the beginning of the year
B Property taxes are recorded
C The account is closed out at the end of the year
D Property taxes are collected
Trang 643 Fund balance of the General Fund will be increased by the closing entry when
A Appropriations are more than expenditures and vouchers payable
B Appropriations are more than expenditures and encumbrances
C Appropriations are less than expenditures and encumbrances
D Appropriations are less than estimated revenues
44 The following items were among Birch Village's capital expenditures during the year ended December31:
Equipment for village tax collector's office: $40,000
Vehicles for village electric utility: $60,000
What amounts should have been recorded in the General Fund and enterprise fund for the increase inequipment during the year ended December 31, assuming the electric utility is accounted for in anenterprise fund?
A General Fund: $0; Enterprise Fund: $0
B General Fund: $0; Enterprise Fund: $60,000
C General Fund: $40,000; Enterprise Fund: $60,000
D General Fund: $100,000; Enterprise Fund: $0
The city of Grand Marais' fiscal year ends on June 30 Grand Marais uses encumbrance accounting OnMay 6, a purchase order was approved and issued for supplies in the amount of $6,000 Grand Maraisreceived these supplies on June 2, and the $6,000 invoice was approved for payment
45 What General Fund journal entry should Grand Marais make on May 6, to record the approved purchaseorder?
A Item A
B Item B
C Item C
D Item D
Trang 746 What General Fund journal entry or entries should Grand Marais make on June 2, upon receipt of thesupplies and approval of the invoice?
D Internal exchange or quasi-external transaction
48 Liabilities incurred, such as for accrued payroll, but still unpaid at year-end, should be recorded in theGeneral Fund by a debit to which of the following accounts?
A Expenditures
B Encumbrances
C Expenses
D Appropriations
49 Which of the following will require a debit to fund balance of a governmental fund when closing entries
are prepared, assuming the original budget entry was not reversed?
A Revenues exceed expenditures and reserve for encumbrances
B Appropriations exceed estimated revenues
C Estimated revenues exceed revenues
D Revenues exceed estimated revenues
50 The Reserve for Encumbrances account is properly termed a
Trang 851 On July 1, the first day of its fiscal year, Elsie City levied a $1,000,000 property tax which is payable infull on December 1 of the same year On September 15, the city decided to borrow $200,000 in 90 daytax anticipation notes to cover operating expenditures until the tax revenues are collected The journalentry on September 15 to record the issuance of tax anticipation notes will include
A A credit to proceeds of tax anticipation notes
B A credit to tax anticipation revenue
C A credit to tax anticipation notes payable
D Either B or C is acceptable if consistently applied
52 Which of the following journal entries should be made to close the encumbrances account at the end ofthe fiscal year?
A Debit Reserve for Encumbrances and credit Encumbrances
B Debit Encumbrances and credit Reserve for Encumbrances
C Debit Fund Balance and credit Encumbrances
D None The account is only closed when no encumbrance documents are outstanding
53 During January 2009 General Fund supplies ordered in the previous fiscal year and encumbered at anestimated amount of $2,000 were received at an actual cost of $2,200 The entry to record this
transaction will require a debit to
A Expenditures 2009 in the amount of $2,200
B Expenditures 2008 in the amount of $2,000
C Expenditures 2009 in the amount of $200
D Both B and C are correct
54 When a fire truck purchased from General Fund revenues was received, the appropriate journal entrywas made in the governmental activities general journal What account, if any, should have been credited
in the General Fund?
A No journal entry should have been made in the General Fund
schedule or statements should
A Not be included in the general purpose external financial statements
B Be included with budget figures adjusted to the GAAP basis and presented only in the general
purpose external financial statements
C Be included with the actual figures presented on the budget basis and then reconciled to the GAAPbasis
D None of the above
Trang 957 In fiscal year 2009 the "Expenditures 2008" account represents
A Excess expenditures in 2008 that will be offset against appropriations for 2009
B Goods or services received in 2008 which the government has no record of ordering
C Amount of expenditures for goods ordered in 2008 that were received in 2009 and chargeable toappropriations of 2008
D The amounts of purchase orders issued in 2008 that were intended to be paid from in full from
appropriations for 2009
58 What would be the effect on the General Fund fund balance in the current fiscal year of recording a
$6,000 expenditure for a new computer server, for which a $5,800 encumbrance had been recorded inthe General Fund in the previous fiscal year?
A Reduce the General Fund fund balance $6,000
B Reduce the General Fund fund balance $5,800
C Have no effect on the General Fund fund balance
D Reduce the General Fund fund balance $200
59 Which of the following transactions is classified as an exchange transaction rather than a nonexchangetransaction?
A Property taxes
B Fees charged by a municipal airport
C Bequest left to the city by a wealthy citizen
D State grant to conduct an after school program for children
60 The City of Beauchamp received 100 acres of land located in the city limits as a gift from a local
property owner for use as a city recreation park The debit for the entry to record this event in the
General Fund should be to
A General capital assets
B Land
C Expenditures
D None of the above no entry required in General Fund
61 Equipment acquired several years ago by a capital projects fund and reported in the governmentalactivities was sold The receipts were considered to be unrestricted revenue Entries are necessary in the
A General Fund, capital projects fund, and governmental activities
B General Fund and governmental activities
C General Fund, capital projects fund, and enterprise fund
D None of the above
Based on the following selected General Fund account balances and other information for Turner City atthe end of the first quarter of the current fiscal year
Trang 1062 The amount of Turner City's total assets as of the end of the first quarter is
A $120,000
B $150,000
C $70,000
D Some other amount
63 Assuming there were no reservations of fund equity at the end of the previous fiscal year and nonecurrently other than reserve for encumbrances, Turner City's fund balance at the end of the previousfiscal year and at the end of the first quarter was (is) _ and _, respectively
A $50,000 and $10,000
B $50,000 and $70,000
C $70,000 and $50,000
D $50,000 and $60,000
64 Which of the following journal entries should a government use to record $475,000 for police
department salaries and wages during a particular month?
reflected in a governmental fund?
A Other financing source and other financing use
B Revenue and expenditure
C Other financing source and expenditure
D Not reported because there are no actual flows of financial resources
67 Which of the following would be reflected in the operating statement of a governmental fund?
Trang 1168 Which of the following is a requirement for revenue recognition under the modified accrual basis ofaccounting?
A Receipt of cash
B Earning
C Availability
D Both B and C
69 Which of the following is properly reported as a liability of the General Fund?
A General obligation bonds payable
B Tax anticipation notes payable
C Vouchers payable
D Both B and C are correct
70 Which of the following funds are governmental funds?
A General Fund, special revenue funds, capital projects funds, debt service funds, and private-purposetrust fund
B General Fund, special revenue funds, capital projects funds, debt service funds, and permanent funds
C General Fund, special revenue funds, capital projects funds, debt service funds, and internal servicefunds
D General Fund, special revenue funds, public-purpose trust funds
71 The governmental fund operating statement presents
A Net income (loss)
B Other financing sources and uses
C Revenues and expenditures
D Special revenue fund
73 The General Fund is used to account for:
A Revenues and expenditures legally restricted to a specific purpose
B The accumulation of resources to pay for principal and interest on the current portion of long-termdebt
C Construction of major capital assets
D General administration expenses of the government
74 How many general funds may a government have?
A One
B Two
C As many as necessary to record its projects and activities
D None, this is not a fund type used by governments under GASBS 34.
Trang 1275 When an enterprise fund pays the General Fund an amount in lieu of taxes, the account to be credited inthe General Fund is
A Endowment where the investment earnings are to be used for public purposes
B Pension trust fund revenues
C Accumulation of resources for payment of general long-term debt principal and interest
D Gasoline taxes to finance road repairs
77 Proceeds from general obligation bonds for capital construction should generally be recorded in the
A Business-type activities
B General Fund
C Capital projects funds
D Debt service funds
78 Which of the following transactions is classified as an exchange transaction rather than a nonexchangetransaction?
A Personal property taxes
B State grant to conduct a smoking cessation program for middle school-aged youth
C Bequest left to the city by a former mayor
D Fees charged by a municipal swimming pool
79 Which of the following types of nonexchange transactions recognize revenue when all the eligibilityrequirements are met?
A Voluntary nonexchange transactions
B Government-mandated nonexchange transactions
C Derived tax revenues
D A and B
80 Which of the following are reported in the functions/programs section of the statement of activities at thegovernment-wide level where they reduce the net expense of each function or program to produce a netrevenue?
A Program revenues
B Indirect revenues
C General revenues
D Nonexchange revenues
81 Revenue from nonexchange transactions is recognized:
A When the underlying transaction has occurred and the resources are available
B When the cash is received
C When the transaction occurs and the revenue has been earned
D It depends upon the classification of the nonexchange transaction
Trang 1382 If a capital projects fund starts construction of a building in one year and finishes it in a subsequent year
an entry must be made in the governmental activities accounts until the building is completed, inspected,and accepted
True False
83 If a general capital asset is disposed of without revenue or expenditure to the government, the event need
be recorded only in the governmental activities accounts
True False
84 A government must capitalize the cost of improvements such as roads, bridges, sidewalks, and so forth,because the GASB requires the cost of such assets to be displayed in the basic financial statements.True False
85 General capital assets must be depreciated and the amount of depreciation for the period should bereported in the operating statements for governmental activities in the government-wide statements.True False
86 The net cost of demolishing a building on land purchased as a site for an addition to city hall should bedebited to the buildings account in the governmental activities accounts
True False
87 The cost of the periodic redecoration of the office of the mayor of a city should be capitalized in thegovernmental activities accounts
True False
88 The General Fund expended $200,000 to buy land to be used by the city electric utility as a site for an
office building This land should be capitalized in the utility fund, not in the governmental activities
accounts
True False
89 Property, plant, and equipment constructed or acquired by use of special assessment financing is
recorded in the governmental activities accounts because the assets belong to the reporting entity
92 Cash discounts available on purchase of capital assets but not taken should be capitalized as part of the
cost of the capital assets
True False
Trang 1493 In addition to required disclosures about general capital assets, a government must allocate the
depreciation expense on those capital assets to the functional categories in which the assets are used.True False
94 A required disclosure about general capital assets is to report on the additions to, and deductions from,general capital assets during the course of a fiscal year
True False
95 Capital projects funds should use the modified accrual basis of accounting for revenues and expenses.True False
96 Capital projects funds generally do not use the Estimated Revenues and Appropriations control accounts;
it is also recommended that the Encumbrances control account not be used.
99 In a capital projects fund the offsetting credit to the debit for assessments receivable current should be
to other financing sources special assessments
True False
100.Debt backed by both assessments and the full faith and credit of a government should be reported in theCAFR in the governmental activities column of the statement of net assets at the government-widelevel
True False
101.Proceeds of tax-supported debt issued for the construction or acquisition of capital assets are recognized
by capital projects funds as "other financing sources" because the liability is recorded in the
governmental activities journal
Trang 15104.Interest incurred on interim or long-term financing during construction of general capital assets cannot
be capitalized as part of the cost of those assets
True False
105.Construction contracts for governmental projects often provide that a stipulated percentage of eachbilling by the contractor will be retained by the government until the project is inspected and acceptedupon completion
108.The acquisition of long-lived assets under an operating lease does not require any recognition in the
accounts of any governmental fund
True False
109.The fund balance shown in a year-end balance sheet of a capital projects fund is more comparable withthe fund balance shown in an interim balance sheet of a General Fund than with that of a year-endGeneral Fund balance sheet
True False
110.Even though the life of a capital projects fund is the life of the project, not year-to-year, operating
statement accounts and encumbrances should be closed at year-end to facilitate preparation of year-endfinancial statements
True False
111.Because year-end closings are artificial in a capital projects fund it is desirable to debit encumbrances onthe first day of the new fiscal year in the amount that was closed at the end of the prior fiscal year.True False
112.After all liabilities are paid and the operating statement accounts closed, it is common to transfer anyremaining assets of a capital projects fund to the General Fund
True False
113.If all asset, liability, and fund equity accounts of a capital projects fund were closed during a certainfiscal year, it is unnecessary to prepare any financial statements for that fund for that year
True False
Trang 16114.Accountability for capital assets used by departments accounted for by the governmental funds of agovernment should be established in
A The appropriate governmental funds
B The property, plant, and equipment fund
C Departmental memorandum records
D The governmental activities accounts at the government-wide level
115.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 estate purchased with the assets of a pension trust fund
116.The following items were included in Prairie City's General Fund expenditures for the year ended JunePersonal computer for the city treasurer: $4,000
Furniture for the mayor's office: $10,000
How much should be classified as capital assets in Prairie City's General Fund balance sheet at June30?
A $ 0
B $ 4,000
C $10,000
D $14,000
117.A wealthy local merchant donated a building to the city of Rosewood during the year The original cost
of the building was $300,000 Accumulated depreciation at the date of the gift amounted to $250,000.Fair market value at the date of the gift was appraised at $600,000, of which $40,000 was appraised asvalue of the land on which the building was situated At what amount should Rosewood record thisdonated property in the governmental activities accounts at the government-wide level?
capitalized as a capital asset is
Streets, sidewalks, and water mains: $2,000,000
What amount should be recorded as capital assets in the town's governmental activities accounts ifOtterville follows GASB standards?
A $ 0
B $2,000,000
C $4,250,000
D $6,250,000
Trang 17120.Equipment in general governmental service that had been acquired several years ago by a capital
projects fund at a cost of $40,000 was sold for $15,000 cash Accumulated depreciation of $30,000existed at the time of the sale The journal entry to be made in the governmental activities journal will
include all of the following except
A A debit to cash for $15,000
B A debit to accumulated depreciation of $30,000
C A credit to equipment for $40,000
D All of the entries above will be made
121.Which of the following funds of a government uses the modified accrual basis of accounting?
A Private-purpose trust fund
B Present value of minimum lease payments
C Lower of fair value or present value of minimum lease payments
D None of the above; leased assets should not be recorded in the accounts
123.The city of Columbus issued bonds at par for the construction of a new city office building Receipt ofthe bond proceeds would result in journal entries in which funds?
A Capital Projects Fund: Yes; Debt Service Fund: No
B Capital Projects Fund: No; Debt Service Fund: Yes
C Capital Projects Fund: Yes; Debt Service Fund: Yes
D Capital Projects Fund: No; Debt Service Fund: No
124.Five trucks were leased by Pleasantville under terms qualifying as a capital lease These trucks are to beused in the fire department This transaction would require an entry in
A Internal service fund
B Special revenue fund
C Plant and equipment fund
D Governmental activities
125.With regard to depreciation of general capital assets
A Depreciation expense should be charged in the appropriate governmental funds, and reported in thegovernmental activities accounts
B Depreciation expense must be recorded in the governmental fund, but no depreciation expense can berecorded in the governmental activities accounts
C No depreciation can be recorded in any governmental fund, but depreciation expense must be
reported in the governmental activities accounts
D No depreciation can be recorded in any governmental fund, nor is it permissible to record
depreciation expense in the governmental activities accounts
126.A capital projects fund might be used to account for which of the following activities?
A Maintaining roads and bridges
B Building a parking garage
C Providing water and sewer services
Trang 18127.Which of the following is true regarding capital projects funds?
A Encumbrances accounting is employed, but since capital projects funds are project-oriented, notoriented to the annual budget, the year-end closing entries are really interim entries in the life of theproject
B Encumbrances accounting is not normally employed, but estimated revenues and appropriationsaccounts are used
C No budgetary accounts are ever used
D All budgetary accounts are employed in the same manner as for the General and special revenuefunds
128.In 2008, Weaver City signed a contract in the amount of $6,000,000 for the construction of a new cityhall Expenditures were $4,000,000 in 2008 and $2,050,000 in 2009, including a change order in theamount of $50,000 What amount should be added to net capital assets in the governmental activitiesaccounts in 2009?
A $6,000,000
B $6,050,000
C $2,050,000
D None of the above
129.The sale of tax-supported bonds at par for the eventual construction of a new city jail would requirerecognition in which of the following funds and/or activities?
A Capital projects and debt service funds
B Debt service fund, capital projects, and governmental activities
C Debt service fund and the governmental activities
D Capital projects fund and the governmental activities
130.The city of Milan was notified that it had been approved for a grant from the state government in theamount of $1,000,000 as partial financing for a new city jail The money from the grant will be receivedlater in the current fiscal year The journal entry to record this transaction will include
A A credit to "other financing sources" upon notification
B A credit to "revenues" when all eligibility requirements are met
C A credit to "revenues" upon receipt of the money from the state
D A credit to "other financing sources" upon receipt of the money from the state
131.Interfund transfers from the General Fund to a capital projects fund to provide partial financing of acapital project would be reported by the capital projects fund as a (an)
A Fund balance addition
A Most states do not permit bonds to be issued at a premium
B Accrued interest is recorded as an other financing source of the capital projects fund
C Premiums on bonds issued must be amortized in the debt service fund
D Premiums on bonds issued is recorded as an "other financing source" of the debt service fund
Trang 19133.Interest expenditures incurred during the period of construction of capital projects
A May not be capitalized as part of the cost of general capital assets reported in governmental activities
B Must be capitalized as part of the cost of general capital assets reported in the governmental activitiesaccounts at the government-wide level
C Must be capitalized as part of the cost of general capital assets reported in the capital projects fund
D May optionally be capitalized as part of the cost of general capital assets reported in the capitalprojects fund
134.The budgetary account recommended for use by a capital projects funds is
A Estimated revenues
B Encumbrances
C Appropriations
D Estimated other financing uses
135.When materials that were ordered for a capital projects fund for use on a construction project are
received but not yet paid for, what account is debited?
A Debit fund balance and credit encumbrances
B Debit reserve for encumbrances and credit encumbrances
C Debit encumbrances and credit fund balance
D Debit encumbrances and credit reserve for encumbrances
137.Which of the following activities or transactions would normally not be accounted for in a capital
projects fund?
A Construction of a new city jail
B Construction of runways financed by revenue bonds and to be repaid from the revenues of the cityairport, an enterprise fund
C Lease of a building to be used as a city office building
D Construction of a new city park to be maintained primarily from General Fund revenues
138.Capital projects funds differ from the General Fund and special revenue funds in that
A Capital projects funds use the full accrual basis of accounting; the latter funds use the modifiedaccrual basis of accounting
B Capital projects funds recognize long-term debt; the latter funds do not
C Capital projects funds recognize depreciation on fixed assets; the latter funds do not
D Capital projects funds have a project-life focus; the latter funds have a year-to-year life
139.Premiums received on tax-supported bonds are generally transferred to what fund?
A Internal service fund
B Debt service
C General
D Special revenue
Trang 20140.Which of the following is not true for capital projects funds?
A GASB standards require that construction work in progress be capitalized in the capital projects fundsuntil the project is completed
B Encumbrance accounting is generally used
C Cash or receivables from special assessments to finance construction projects should be recorded asassets of capital projects funds
D Capital projects funds may account for financial resources provided by federal grants as well as forbond proceeds
141.The capital projects fund of Petit City paid salaries for the month to city employees who worked on aconstruction project The debit for the entry in the capital projects fund to record this event should be to
A Departmental expense accounts
B Salaries and wages expense
C Due to General Fund
D Expenditures
In late June, the Everready Construction Co submitted a progress billing on a construction contract for
$600,000 On July 2, the bill was approved for payment, subject to a five-percent retention, as provided
by the contract
142.Construction expenditure should be debited when
A The bill is approved for payment
B The bill is received
C The bill is paid (except for the five percent retention)
D The final five percent of the bill is paid
143.The amount that should be debited to construction expenditure is
B Bond anticipation notes payable
C Contracts payable retained percentage
D Temporary investments
145.Upon inception of a capital lease the journal entry required in the capital projects fund will include
A A debit to capital lease equipment
B A debit to expenditures
C A credit to obligations under capital leases
D Both A and C are correct
146.For which of the following assets can the "modified approach" be elected in lieu of depreciation?
A Buildings and equipment
B All general capital assets
C All capital assets
D Eligible infrastructure assets
Trang 21147.Which of the following is one of the requirements that must be met to elect not to depreciate certain
eligible infrastructure assets?
A The government omits the cost of the assets from the government-wide statement of net assets
B The government maintains the assets in a condition level that far exceeds the prescribed level
C The government manages the assets using an asset management system that meets specific criteria
D The government gets permission of the Government Accounting Standards Board
148.The budgetary account recommended for use by a capital projects fund is
A Estimated other financing sources
B Encumbrances
C Appropriations
D Estimated revenues
149.A capital projects fund might be used to account for which of the following activities?
A Building an addition to the city council building
B Maintaining roads and bridges
C Operating a municipal golf course
D Paying off the principal and interest on debt incurred to build a municipal swimming pool
150.The following are the city of Beaver Creek's capital assets:
Capital assets used in proprietary fund activities: $1,000,000
Capital assets used in public purpose trust funds: $1,700,000
All general capital assets: $7,000,000
What aggregate amount should Beaver Creek account for in the governmental activities journal?
152.In the statement of net assets, all capital assets should be reported as
A Invested in capital assets, net of related debt
B Restricted or unrestricted financial assets, as appropriate
C General capital assets, preceding general long-term liabilities
D Net equity in capital assets
153.Equipment acquired several years ago by a capital projects fund and reported in the governmental
activities was sold The receipts were considered to be unrestricted revenue Entries are necessary in the
A General fund, capital projects fund, and governmental activities
B General Fund, capital projects fund, and enterprise fund
C General Fund and governmental activities
D None of the above
Trang 22154.In which of the following funds or activities would it not be appropriate to record depreciation of capital
assets?
A Capital projects fund
B Internal service fund
C Business-type activities
D Governmental activities
155.The city of Romeo purchased a squad car for the police department If the operations of the police
department are financed by general revenues, the purchase would be recorded in which fund and/oractivities?
A General Fund: No; Governmental Activities: Yes
B General Fund: No; Governmental Activities: No
C General Fund: Yes; Governmental Activities: No
D General Fund: Yes; Governmental Activities: Yes
156.Both general capital assets acquired or constructed from the proceeds of special assessment debt, and thelong-term liability are accounted for in the governmental fund
True False
157.Debt backed by both special assessments and the full faith and credit of a government should be reported
in the CAFR in the business-type activities accounts
True False
158.When a capital lease payment of $20,000 is legally due, entries are made in the debt service fund torecord the liability of $20,000, and entries are made in the governmental activities accounts to reducecapital lease obligations payable by $20,000
Trang 23164.Notes to the financial statements of a state or local government should include a schedule, or summary,
of annual debt service requirements (principal and interest payments) for the year following the balancesheet date and for all subsequent years until the final maturity of debt outstanding on balance sheetdate
True False
165.Debt service funds exist to accumulate resources to pay tax supported bond issues at maturity Interest
on such bonds is paid from General Fund appropriations, not from debt service fund appropriations.True False
166.All long-term debt, including bonds, notes or warrants, and various other long-term obligations, intended
to be repaid from tax levies or special assessments are accounted for in debt service funds
170.The liability for matured bonds payable should be recorded by a debt service fund only if a legal
appropriation for that purpose exists in the proper amount
173.Installments of special assessments to be collected within one year are recorded as Assessments
Receivable Current; installments due at times in excess of one year are recorded as Assessments
Trang 24175.Expenditures for interest on tax supported long-term debt are accrued because debt service funds areaccounted for on the modified accrual basis.
True False
176.If all financial resources recognized as assets and as revenues of a debt service fund have not been
collected in cash and/or have not been disbursed for payment of debt service as of the end of a fiscal year
it is necessary that a debt service fund balance sheet be prepared for inclusion in a government's annualreport
179.Premium or discount on bonds purchased as investments is accounted for in the same manner as
discount on bonds payable sold
True False
180.Capital lease payments should be recorded by a debt service fund rather than the fund using the leasedasset
True False
181.Expenditures for capital lease payments consist of two elements: payment of interest on the lease
obligation, and payment on the obligation itself
True False
182.Ordinarily, a statement of changes in debt service fund balance should be combined with the statement
of revenues and expenditures for the debt service fund
185.Which of the following are properly accounted for 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 All of the above
Trang 25186.The liability for special assessment bonds that carry a secondary pledge of a city's general credit, ifreported in conformity with GAAP, should be reported in the balance sheet(s) of
A A debt service fund
B An agency fund
C The governmental activities accounts
D An agency fund and disclosed in the notes to the financial statements
187.General obligation bonds issued for the benefit of enterprise funds, with the intent of paying bond
principal and interest from revenues of the enterprise fund, should be reported as a liability in the
balance sheet of the
A Enterprise fund
B Governmental activities
C Both the enterprise fund and the governmental activities accounts
D Enterprise fund and a note to the financial statements explaining the contingent liability of the generalgovernment if enterprise funds are insufficient to pay principal and interest
188.Immediately after making its annual $20,000 lease payment on June 30, 2008, the last day of its fiscalyear, a certain city had an unpaid capital lease obligation of $95,000 The interest rate applicable to thelease is 10 percent When the $20,000 lease payment due on June 30, 2009 is made, the journal entry forthe governmental activities accounts will include
A A debit to Capital Lease Obligation Payable in the amount of $10,500
B A debit to Capital Lease Obligation Payable in the amount of $20,000
C A debit to Cash in the amount of $20,000
D Both B and C are correct
189.A debt service fund is a (an)
A Nonexpendable fund
B Governmental fund
C Fiduciary fund
D Proprietary fund
190.Which of the following resource inflows would be recorded as a revenue of a debt service fund?
A Property taxes levied by the debt service fund for debt service purposes
B Receipt of the premium on a new bond issue
C Taxes collected by the General Fund and transferred to the debt service fund
D Transfer of the residual equity of a capital project from a capital projects fund to the debt servicefund
191.On the due date for bond interest, the debt service fund journal entry (or entries) will include
A A debit to Appropriations
B A debit to Interfund Transfers In
C A debit to Expenditures Bond Interest
D A debit to Interest Expense
192.For which of the following would bond discount or premium be amortized?
A Bonds Issued: No; Bonds Held as Investments: No
B Bonds Issued: No; Bonds Held as Investments: Yes
C Bonds Issued: Yes; Bonds Held as Investments: No
D Bonds Issued: Yes; Bonds Held as Investments: Yes
Trang 26193.Under GASBS 34, combining financial statements would be prepared
A For all nonmajor governmental funds
B For all internal service funds
C For each fund-type
195.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 date does not coincide with the end of the fiscalperiod
B When bonds are issued
C When paid
D When legally payable
196.Special assessments levied for debt service of bonds issued for a special assessment capital project will
be accounted for by a debt service fund under which of the following situations?
Trang 27198.Based on the information below, what amount should be accounted for in a debt service fund?
A $200,000
B $1,800,000
C $1,900,000
D None of the above
199.Valencia Village issued the following bonds during the year ended June 30, 2008:
For installation of street lights, to be assessed against
properties benefited, but secondarily backed by the village: $600,000
For construction of public golf course, bonds to be paid from
pledged fees collected from golf course users: $800,000
How much should be accounted for through debt service funds for payments of principal over the life ofthe bonds?
B Capital projects fund
C Governmental activities journal
D Debt service fund
201.On the due date for bond interest, the debt service fund journal entry (or entries) will include a debit to
A Expenditures bond interest
B Transfers in
C Appropriations
D Interest expense
202.When bonds are sold at a premium for a capital project, the premium amount generally
A Increases the cash available to the capital projects fund
B Is transferred to the debt service fund
C Is transferred to the General Fund
D Is ignored by both the capital projects fund and any other fund
Trang 28203.Proceeds from general obligation bonds should be recorded in the
A Debt service fund
B General obligation bond fund
C Permanent fund
D Capital projects fund
204.Which of the following is true for debt service funds?
A A legally required budget should be recorded in the accounts
B A combining balance sheet may not be prepared for a comprehensive annual financial report (CAFR)when more than one debt service fund exists
C Encumbrance accounting is often used
D All of the above statements are true
205.Which of the following statements is not true for debt service funds?
A Special assessment debt for which the government has some obligation is paid through the debtservice fund
B Matured interest payable is reported as a liability of the debt service fund
C Bond principal is shown as a liability of the debt service fund only when that principal is due andpayable
D All tax-supported bond principal is shown as a liability of the debt service fund
206.If a government issues debt to finance capital acquisition by another government and the proceeds of thedebt are delivered directly to the intended beneficiaries, how should the related long-term debt be
reflected in a governmental fund?
A Other financing source and other financing use
B Other financing source and expenditure
C Revenue and expenditure
D Not displayed on the face of the financial statements because there are no actual flows of financialresources; however, disclosed in the notes to the financial statements
207.Which of the following financing sources used to redeem (or refund) bonds would not result in a debit to
an expenditure account in the debt service fund when the liability for the redeemed (or refunded) bonds
is removed from the governmental activities accounts?
A Proceeds of Refunding Bonds
B Assets previously accumulated in the debt service fund
C Interfund Transfer from the General Fund
D None of the above; that is, all of the above sources would result in a debit to an expenditure account.208.Debt service funds are used to account for which of the following
A Payment of interest only on general long-term debt
B Payment of principal only on general long-term debt
C Payment of principal and interest on general long-term debt
D Payment of principal and interest on all debt of the government, including that of enterprise funds.209.Premiums received on tax-supported bonds are generally transferred to what fund?
A Capital projects
B Debt service
C General
D Special revenue
Trang 29210.Which of the following assets would not be found in the balance sheet of a debt service fund?
A Cash with fiscal agent
A Serial bond debt service fund
B Deferred serial bond debt service fund
C Irregular serial bond debt service fund
D Term bond debt service fund
213.If a city has an unpaid capital lease obligation at the beginning of its fiscal year, the journal entry in thedebt service fund to record the lease payment at the end of that fiscal year will include
A A debit to Capital Lease Obligations Payable
B A credit to Expenditures Principal of Capital Lease Obligation
C A debit to expenditures Principal of Capital Lease Obligation
D None of the above
214.On June 1, 2009, Brooktown levied special assessments in the amount of $500,000, payable in 10 equalannual installments beginning on June 30, 2009 The assessment installments are intended to pay
principal and interest on special assessment bonds for which the town has pledged its full faith and creditshould assessments be insufficient Assuming no allowance for uncollectible receivables, the journalentry in the debt service fund on June 1, 2009 would include:
A A debit to Assessments Receivable Current for $500,000
B A debit to Assessments Receivable Current for $50,000
C A credit to Deferred Revenues for $450,000
D Both B and C are correct
215.Which of the following is a true statement regarding in-substance defeasance of bonds?
A The government must place cash or other assets in an irrevocable trust sufficient to pay all futureinterest and principal payments for the debt being defeased
B The government must agree to maintain sufficient cash and investment balances in its debt servicefund to cover all interest and principal payments for the debt being defeased
C The government must pledge to transfer amounts to an escrow agent prior to the due date for eachinterest and principal payment for the debt being defeased
D Any of the above approaches are acceptable under GAAP
Trang 30216.Modified accrual accounting is used for debt service funds in which of the following ways?
A It is used without exception
B It is not used in any transaction
C It is used to account for interest, with the exception that interest is paid when due
D It is used for revenue transactions
217.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
218.When the debt service fund makes a payment of principal and interest on an outstanding long-term debt,the governmental activities accounts
A Reflect the principal payment only
B Reflect the interest payment only
C Has no record of the transaction
D Reflects both principal and interest payments
219.The city of Superior's fiscal year ends on December 31 On July 1, 2008 Superior issues $1,000,000 of8%, 10-year term bonds with semi-annual interest payments due on July 1 and January 1 each year TheGeneral Fund transferred $100,000 to the debt service fund on July 1, 2008 to pay for interest to
bondholders for the year The debt service fund invests the money at an annual rate of 10% What is theamount of total assets in the debt service fund at the end of 2008?
A $ 65,000
B $ 105,000
C $ 965,000
D $1,005,000
220.Which of the following financial statements contains a column for the total of all debt service funds?
A Statement of cash flows
B Statement of revenues, expenditures, and changes in governmental fund balances
C Statement of revenues, expenses, and changes in proprietary net assets
D None of these statements does
221.Revenue bonds sold by a water utility fund, upon sale, would be recorded
A In the governmental activities accounts as a liability
B In an enterprise fund as "proceeds of bonds."
C In an enterprise fund as a liability
D In an enterprise fund as a revenue
222.Which of the following is not true?
A The debt service activity of a government may be properly accounted for within the General Fundunless law mandates the use of a debt service fund
B Debt service funds, unlike the General Fund and special revenue funds, do not use budgetary
Trang 32government-wide statements.
Content: Concept Level: Easy Wilson - Chapter 04 #1
2 General funds and special revenue funds are entitled to record legally approved revenue budgets as
receivables and legally approved appropriations as payables
FALSE
Legally budgeted revenues are resources, not assets Legally approved appropriations are
appropriations of fund equity, not liabilities
Content: Concept Level: Medium Wilson - Chapter 04 #2
3 Assuming all legal requirements have been met, the revenues budget total should be credited to the
Estimated Revenues control account; the appropriations budget total should be debited to
Appropriations and the difference should be debited or credited to Fund Balance
FALSE
The revenues budget total should be debited to the Estimated Revenues control account and theappropriations budget total should be credited to the Appropriations control account Recording ofthe detail of each budget must also be made in subsidiary ledger accounts
Content: Journal Entry
Level: Easy Wilson - Chapter 04 #3
Trang 334 Governments that are temporarily short of cash but that have levied taxes expected to be collectible
during the fiscal year are generally able to borrow on short-term notes known as "tax anticipationnotes payable"
TRUE
Property taxes are a lien on the underlying property; therefore, the tax levy is generally considered bybankers or other lenders to be good security for short-term loans
Content: Concept Level: Medium Wilson - Chapter 04 #4
5 In order to account correctly for the receipt of goods or services ordered in a prior fiscal year it is
necessary to know which appropriations were affected when the encumbrance documents wereissued
TRUE
The appropriations of the year in which encumbrance documents were issued were charged for theestimated liability at the time the encumbrances were issued In most jurisdictions the encumberedportion of the appropriation does not lapse at fiscal year-end and may properly be expended in thesubsequent years when goods and services are received
Content: Concept Level: Easy Wilson - Chapter 04 #5
6 When purchase orders or contracts are issued for legally authorized purposes a record must be kept,
but no entries in the General Fund or special revenue fund accounts are necessary
FALSE
GASB standards provide that the encumbrance be recorded to assist in budgetary control over
expenditures so that appropriations will not be over-expended
Content: Concept Level: Medium Wilson - Chapter 04 #6
7 If the actual liability for goods or services ordered in the current year differs from the estimated
liability, the Encumbrances account should be credited in the amount of the actual liability
FALSE
If the actual liability for goods received differs from the estimated liability (which is often the case),the Encumbrances account is credited for the estimated liability that was originally debited
Content: Concept Level: Easy Wilson - Chapter 04 #7
Trang 348 The payment of liabilities by the General Fund or a special revenue fund requires the expenditure of
9 Under the modified accrual basis of accounting applicable to governmental fund types, Revenues is
credited for the total amount of property tax bills prepared
10 Under the modified accrual basis of accounting applicable to governmental fund types, revenue from
sources such as fines and forfeits is accrued and recorded at net realizable value
FALSE
Fines and forfeits, and many other sources of revenue of general and special revenue funds, is
recognized when cash is received because there is no practicable way of measuring the revenuebefore collection
Content: Concept Level: Easy Wilson - Chapter 04 #10
11 Under current GASB standards the revenue from property taxes should be recorded in the period and
in the amounts in which taxes are collected
FALSE
Property tax revenue is considered susceptible to accrual and should be recognized when tax bills are
prepared GASBS 33 requires that imposed nonexchange transactions, such as property taxes, be
recognized in the period for which the taxes are levied
Content: Concept Level: Easy Wilson - Chapter 04 #11
Trang 3512 If property taxes are not collected by the date specified by law, additional revenue is generally earned
by the fund of the government for which the taxes were levied
TRUE
Interest and penalties are levied by law on delinquent taxes, and to the extent estimated to be
collectible, are recorded as revenue at the time the amounts are computed
Content: Concept Level: Medium Wilson - Chapter 04 #12
13 Correction of errors in recording revenues or expenditures of the current year must be recorded both
in the proper general ledger control account (Revenues or Expenditures) and in each subsidiaryledger account affected
TRUE
Subsidiary ledger accounts as well as control accounts must receive entries for the corrections so thatthe subsidiary and control accounts will agree properly
Content: Concept Level: Medium Wilson - Chapter 04 #13
14 A government that uses the encumbrance method for purchases of goods and services is not required
to use encumbrance accounting for its payrolls
TRUE
If neither law nor good financial management requires the use of encumbrance accounting for
payrolls, which is typically the case, there is no need to use the encumbrance method An exceptionmight be when payroll varies substantially from period to period, perhaps due to seasonal part-timeemployment
Content: Concept Level: Medium Wilson - Chapter 04 #14
15 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
FALSE
Fringe benefits given to employees of state and local governments whose salaries are paid by agovernmental fund must be authorized by appropriations and therefore result in expenditures; fringebenefits for employees paid by a proprietary fund result in expenses
Content: Concept Level: Medium Wilson - Chapter 04 #15
Trang 3616 An interim balance sheet for the General Fund reflects balances of budgetary control accounts and
balances of operating statement control accounts, as well as assets, liabilities, and fund equity
TRUE
Since budgetary accounts are integrated with operating statement accounts, balances of both must bepresented in the interim balance sheet, as well as balances of asset, liability, and fund equity accounts(See Illustration 4-2)
Content: Concept Level: Medium Wilson - Chapter 04 #16
17 A statement comparing the detailed budgeted revenues with actual revenues to the date of the interim
balance sheet should accompany the interim balance sheet in order to disclose the detail of amountsshown in summary in the resources section of the balance sheet
TRUE
Refer to Illustration 4-3 and note its relation to the resources portion of Illustration 4-2
Content: Concept Level: Medium Wilson - Chapter 04 #17
18 A statement comparing the detail of appropriations, expenditures, and encumbrances should
accompany an interim balance sheet in order to disclose the detail of the amount shown in summary
in the appropriations subdivision of the fund equity section of the interim balance sheet
TRUE
Refer to Illustration 4-4 and note its relation to the appropriations portion of Illustration 4-2
Content: Concept Level: Medium Wilson - Chapter 04 #18
19 Whenever a tax or other revenue source is authorized by a legislative body to be used for a specified
purpose only, a special revenue fund should be established
Trang 3720 Interfund transactions that would result in the recognition of revenues, expenditures, or expenses, if
one of the parties were external to the government, should be reported as fund revenues,
expenditures, or expenses
TRUE
These transactions were formerly called quasi-external transactions The authors have coined theterm internal exchange transactions to describe these transactions that should be reported as if one ofthe parties were external to the government
Content: Concept Level: Medium Wilson - Chapter 04 #20
21 Although a governmentally owned utility may receive police and fire protection and other services
from governmental departments financed by "governmental" funds, such a utility is exempt fromtaxes and should not pay the General Fund anything for services received
FALSE
In fact, it is a common practice for the utilities to pay the General Fund a "payment in lieu of taxes(PILOT)," as illustrated in Chapter 4
Content: Concept Level: Medium Wilson - Chapter 04 #21
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."
TRUE
This is a common example of an internal exchange transaction
Content: Concept Level: Easy Wilson - Chapter 04 #22
23 Interfund loans and advances should be eliminated from the accounts of the debtor fund and from the
accounts of the creditor fund so the annual financial statements of the government will show onlyreceivables from and payables to external individuals or organizations
FALSE
GASB standards regard funds as separate fiscal and accounting entities; therefore, interfund
receivables and payables should not be eliminated
Content: Concept Level: Medium Wilson - Chapter 04 #23
Trang 3824 If one fund is both a debtor and creditor of a second fund, both funds must report the full amounts
receivable and payable in their year-end balance sheets
FALSE
GASB standards provide that in the situation described, the fund interfund receivables/payables may
be offset for reporting purposes only, and the net amount reported in the financial statements
However, these amounts should not be offset in the accounts
Content: Concept Level: Medium Wilson - Chapter 04 #24
25 As a general rule, revenues, expenditures, and expenses should be reported as such only once in the
funds of a government
TRUE
This is the position taken by GASB and it serves as the rationale for recording the transactions
illustrated in Chapter 4 under the caption "nonreciprocal interfund activity."
Content: Concept Level: Medium Wilson - Chapter 04 #25
26 Regular periodic transfers of resources raised by one fund to another fund that is to use the resources
are classified as "interfund transfers."
TRUE
The regular recurring transfer does not result in a true expenditure to the transferor fund nor a truerevenue to the transferee fund
Content: Concept Level: Easy Wilson - Chapter 04 #26
27 A transfer of General Fund assets to create an internal service fund that is not expected to repay the
assets is an example of an interfund transfer
TRUE
The transaction described is a nonrecurring transfer that meets the definition of an interfund transfer
Content: Concept Level: Medium Wilson - Chapter 04 #27
28 Which of the following is properly reported as a liability of the General Fund?
A General obligation bonds payable
B Accounts payable
C Tax anticipation notes payable
D Both B and C are correct.
Content: Concept
Trang 3929 When a vehicle is ordered by a government, the purchase order should be recorded in the General
30 In an interim balance sheet of a governmental fund, the fund equity section would not include
A Reserve for encumbrances
B Contributed capital.
C Reserve for inventory
D Available appropriations
Content: Concept Level: Medium Wilson - Chapter 04 #30
31 The Town of Woodhaven levied property taxes in the amount of $800,000 The Town estimates that
1 percent will be uncollectible The journal entry to record the tax levy will include
A A debit to cash for $792,000
B A credit to revenues for $792,000.
C A debit to estimated uncollectible current taxes for $8,000
D A debit to estimated revenues for $800,000
Content: Journal Entry Level: Medium Wilson - Chapter 04 #31
32 An interfund transfer should be reported in a governmental fund operating statement as a (an)
A Revenue or expenditure
B Due from or due to other funds
C Change in fund balance
D Other financing source or use.
Content: Concept Level: Easy Wilson - Chapter 04 #32
33 The City of Oldetown purchased a vehicle for the police department If the operations of the police
department are financed by general revenues, the purchase would be recorded in which funds and/oractivities?
A General Fund: Yes; Governmental Activities: No
B General Fund: No; Governmental Activities: No
C General Fund: Yes; Governmental Activities: Yes
D General Fund: No, Governmental Activities: Yes
Content: Concept Level: Medium Wilson - Chapter 04 #33
Trang 4034 The General Fund has transferred cash to the appropriate fund for eventual retirement of term bonds
maturing in 10 years Which funds would record this transaction?
A General Fund: Yes; Capital Projects Fund: No; Debt Service Fund: Yes
B General Fund: No; Capital Projects Fund: No; Debt Service Fund: Yes
C General Fund: Yes; Capital Projects Fund: No; Debt Service Fund: No
D General Fund: Yes; Capital Projects Fund: Yes; Debt Service Fund: Yes
Content: Concept Level: Medium Wilson - Chapter 04 #34
35 Using the information below, what amount should be accounted for in a special revenue fund or
36 Which of the following would be considered an internal exchange or quasi-external transaction?
A The General Fund transfers $200,000 to establish a Central Supplies Fund; this amount will not berepaid
B The General Fund transfers $125,000 to the Debt Service Fund for payment of currently due bondinterest payments
C The General Fund receives supplies from the Central Supplies Fund in the amount of $9,000.
D The Capital Projects Fund completes a library building project and transfers the remaining cash tothe Debt Service Fund
Content: Concept Level: Medium Wilson - Chapter 04 #36
37 Which of the following would be reflected in the operating statement of a governmental fund?
A Incurrence of a liability for vacation leave for employees.
B Amortization expense
C Depreciation expense
D Revenue related to prior periods
Content: Concept Level: Medium Wilson - Chapter 04 #37