Test Bank For Accounting for Governmental & Nonprofit Entities 17th edition by reck

1.

Fund-based financial statements are intended to provide detailed financial information about the governmental, proprietary, and fiduciary activities of the primary government.  
 
True    False

2.

Government-wide financial statements include financial information for all governmental, proprietary, and fiduciary funds.  
 
True    False

3.

The government-wide statement of net position displays the net expense or revenue for each function or program of the government.  
 
True    False

4.

Program revenues are distinguished from general revenues on the government-wide statement of activities under GASB standards.  
 
True    False

5.

Three categories of program revenues are reported in the statement of activities: charges for services, operating grants and contributions, and capital grants and contributions.  
 
True    False

6.

All purchases of goods and services and all interfund transfers of the General Fund are recorded as Expenditures.  
 
True    False

7.

On the government-wide statement of activities, depreciation expense for assets that essentially benefit all functions, such as the city hall, may be reported as a separate line item or on the same line as the General Government or similar function.  
 
True    False

8.

Expenses represent the costs to purchase goods or services, whereas expenditures represent the costs of a goods or services consumed or expired during the period.  
 
True    False

9.

Other financing sources increase fund balance in the same manner as revenues.  
 
True    False

10.

Budgetary accounts used in the General Fund include Estimated Revenues, Estimated Other Financing Sources, Appropriations, Estimated Other Financing Uses, and Encumbrances.  
 
True    False

11.

All encumbrances must be closed at year-end.  
 
True    False

12.

An encumbrance represents the estimated future liability for goods or services resulting from placing a purchase order or signing a contract.  
 
True    False

13.

GASB standards require that all state and local governments present a statement of revenues, expenditures, and changes in fund balances-budget and actual for the General Fund and major special revenue funds for which annual budgets have been legally adopted.  
 
True    False

14.

Available means that a revenue or other financing source is expected to be collected during the current fiscal period or within one month of the fiscal year end.  
 
True    False

15.

The legal level of budgetary control represents the administrative level at which expenditures may not exceed appropriations without a formal budgetary amendment.  
 
True    False

16.

“Available appropriation” is calculated as the difference between appropriations and the sum of expenditures and encumbrances.  
 
True    False

17.

When goods for which an encumbrance has been recorded are received at an invoiced amount that varies from the amount encumbered, the encumbrance is reversed in the amount of the actual invoiced cost of the goods.  
 
True    False

18.

An allotment may be described as an internal allocation of funds on a periodic basis usually agreed upon by the department heads and the chief executive.  
 
True    False

19.

In the GASB reporting model, extraordinary items and special items must be reported as separate line items below General Revenues in the statement of activities to distinguish these nonrecurring items from normal recurring general revenues.  
 
True    False

20.

The numerical difference between (1) current assets and deferred outflows and (2) current liabilities and deferred inflows recorded in governmental funds is denoted as net position.  
 
True    False

21.

Encumbrance accounting is required in the accounting for payroll of governmental funds.  
 
True    False

22.

When an activity accounted for by the General Fund results in issuance of purchase orders or contracts for goods or services a record must be kept, but no journal entries in the General Fund are necessary.  
 
True    False

23.

An interim schedule comparing the detail of appropriations, expenditures, and encumbrances should be prepared on an appropriate periodic basis to determine whether appropriations are being expended at the expected rate for the period and for the budget year to date.  
 
True    False

24.

Which of the following best describes the recommended format for the government-wide statement of activities?  
 

A.  Program revenues minus expenses minus other revenues and expenses equals change in net position. 

B.  Program revenues plus general revenues minus expenses equals change in net position. 

C.  Program revenues minus expenses plus general revenues equals change in net position. 

D.  Expenses minus program revenues plus general revenues equals change in net position. 

25.

Which of the following statements is not a true statement about expenses that are directly related to a government function or program?  
 

A.  They are reported in the government-wide statement of activities at the government-wide level. 

B.  They include expenses that are specifically associated with a function or program. 

C.  They include interest on general long-term liabilities. 

D.  They include depreciation expense on capital assets that are clearly identified with a function or program. 

26.

Which of the following is not a category of program revenue reported on the statement of activities at the government-wide level?  
 

A.  General program revenues. 

B.  Charges for services. 

C.  Operating grants and contributions. 

D.  Capital grants and contributions. 

27.

Extraordinary items and special items are reported on the government-wide statement of activities  
 

A.  With normal recurring general revenues. 

B.  As separate line items in the Function/Programs section of the statement of activities. 

C.  As separate line items below General Revenues in the statement of activities. 

D.  As separate line items above General Revenues. 

28.

Which of the following items would not appear in a statement of revenues, expenditures, and changes in fund balances prepared for a governmental fund?  
 

A.  Depreciation expense. 

B.  Interfund transfers in. 

C.  Revenues from property taxes. 

D.  Expenditures for employee salaries. 

29.

Which of the following would always be classified as a general revenue?  
 

A.  Grant proceeds. 

B.  Special assessment charges for snow removal. 

C.  Library fines. 

D.  Fuel taxes earmarked for maintenance of roads and bridges. 

30.

Which of the following is not a budgetary account?  
 

A.  Encumbrances. 

B.  Encumbrances Outstanding. 

C.  Estimated Revenues. 

D.  Appropriations. 

31.

When the budget for the General Fund is recorded, the required journal entry will include:  
 

A.  A credit to Estimated Revenues. 

B.  A debit to Encumbrances. 

C.  A credit to Appropriations. 

D.  A credit to Fund Balance. 

32.

When the budget of a government is recorded and Appropriations exceeds Estimated Revenues, the Budgetary Fund Balance account is:  
 

A.  Credited at the beginning of the year and debited at the end of the year. 

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

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

D.  Debited at the beginning of the year and credited at the end of the year. 

33.

Which of the following accounts is a budgetary account of a governmental fund?  
 

A.  Encumbrances Outstanding. 

B.  Appropriations. 

C.  Expenditures. 

D.  Other Financing Sources. 

34.

The Estimated Revenues control account of a government is credited when:
  

  Budgetary accounts are closed Revenues are recorded

A) Yes No

B) No No

C) No Yes

D) Yes Yes

A.  Choice A. 

B.  Choice B. 

C.  Choice C. 

D.  Choice D. 

35.

Under the modified accrual basis of accounting used by the General Fund, financial resources are considered available if the revenue or other financing source is expected to be collected  
 

A.  Within 60 days after year-end. 

B.  Within 90 days after year-end. 

C.  During the current fiscal period. 

D.  During the current fiscal period or a reasonable time after year-end defined by each individual government. 

36.

Which of the following accounts of a government is credited when a purchase order is approved?  
 

A.  Encumbrances. 

B.  Encumbrances Outstanding. 

C.  Vouchers Payable. 

D.  Appropriations.