___ (4.) A transfer of funds is made from the general fund to the debt service fund.
___ (5.) The principal and interest of a bond are paid.
___ (6.) A building is acquired for the police department, and renovations begin immediately.
___ (7.) Depreciation on fire trucks is recorded.
___ (8.) Citizens are assessed for a street lighting project that has been legally restricted for those
citizens.
___ (9.) A grant is received to landscape tree-lined areas beside city-owned streets.
___ (10.) The city spends grant money received in (9.) above and landscapes the tree-lined areas
beside the streets for which the grant money was received.
47. Which organization is responsible for establishing accounting principles for governmental
entities? By whom was this organization established?
48. For what is a special revenue fund used to account?
49. What is the definition of the term fund?
50. For a government, what kinds of operations are accounted for using a proprietary fund? Give
three examples.
51. What are the five types of governmental funds?
52. A county enacted a special tax levy and the money must be used to buy unused farmland for
environmental preservation. What kind of fund should be used to record the revenues generated
by the tax?
53. In governmental accounting, what term is used for a decrease in financial resources?
54. Under modified accrual accounting, when are expenditures recorded?
55. What assets would be included in the accounting records of a city’s general fund?
56. Under modified accrual accounting, when should revenues be recognized by a governmental-
type fund?
57. When should property taxes be recognized under modified accrual accounting?
58. What are the two sets of financial statements mandated by GASB for state and local
governments? For each set, what are the names of the individual statements that must be
produced?
59. What is the primary difference between monies accounted for in the general fund and monies
accounted for in the special revenue fund?
60. What are the two proprietary fund types?
61. What are the four fiduciary fund types?
62. What is the purpose of fund financial statements?
63. What is the purpose of government-wide financial statements?
64. The board of commissioners of the city of Jarmaine adopted a General fund budget for the
year ending June 30, 2018, which indicated tax levy revenues of $1,300,000, bond proceeds of
$520,000, appropriations for government operations of $1,170,000, and operating transfers out of
$390,000.
Required:
If this budget was formally integrated into the accounting records used to produce the
governmental fund financial statements, what was the required journal entry at the beginning of
the year?
65. On July 1, 2018, Fred City ordered $1,500 of office supplies. They were to be paid for out of
the general fund.
Required:
(A) What journal entry was required for the governmental fund financial statements?
(B) What journal entry was required for the government-wide financial statements?
66. On July 12, 2018, Fred City ordered a new computer at an anticipated cost of $114,400. The
computer was received on July 16, 2018 with an actual cost of $116,220. Payment was
subsequently made on August 15, 2018.
Required:
(A) Prepare all the required journal entries and identify the type of fund in which each entry was
recorded for the governmental fund financial statements.
(B) Prepare all the required journal entries to be recorded for the government-wide financial
statements.
Expenditures – Printing
Vouchers (or Accounts) payable
(B) Government-wide financial statements
8/15
Vouchers (or Accounts) payable
116,220
Cash
Learning Objective: 16-06
Topic: Encumbrances
Difficulty: 2 Medium
Blooms: Apply
AACSB: Knowledge Application
AICPA: BB Industry
AICPA: FN Measurement
[QUESTION]
67. A new truck was ordered for the sanitation department at a cost of $122,200 on September 3,
2018.
Required:
(A) Prepare the required journal entry in the general fund for the governmental fund financial
statements.
(B) Prepare the required journal entry for the government-wide financial statements.
(A) Governmental fund financial statements – General fund
9/3
Encumbrances – Truck
122,200
Encumbrances outstanding
122,200
(B) Government-wide financial statements
9/3
No entry
Learning Objective: 16-06
Topic: Encumbrances
Difficulty: 1 Easy
Blooms: Apply
AACSB: Knowledge Application
AICPA: BB Industry
AICPA: FN Measurement
[QUESTION]
68. The school system had some brochures printed by a local printing service on September 22,
2018. The school system received an invoice showing an amount of $1,560 for the printing, but
the bill is not due until October 15, 2018.
Required:
(A) Prepare the required journal entry in the general fund for the governmental fund financial
statements.
(B) Prepare the required journal entry for the government-wide financial statements.
(A) Fund financial statements – General fund
Due to Enterprise fund
Due to Enterprise fund
Vouchers (or Accounts) payable
1,560
Learning Objective: 16-06
Topic: Expenditures
Difficulty: 1 Easy
Blooms: Apply
AACSB: Knowledge Application
AICPA: BB Industry
AICPA: FN Measurement
[QUESTION]
69. A $910,000 bond was issued on October 1, 2018 to build a new road. The bonds carried a
6% interest rate and are due in 10 years.
Required:
(A.) Prepare the required journal entry in the capital projects fund on October 1 for the
governmental fund financial statements.
(B.) Prepare the required journal entry for the government-wide financial statements.
(A.) Governmental fund financial statements – Capital projects fund
Other financing sources – Bond proceeds
Cash
70. On June 14, 2018, Fred City agreed to transfer cash of $52,000 from the general fund to
provide permanent financing for a municipal swimming pool that will be viewed as an enterprise
fund. The cash was transferred on June 30, 2018.
Required:
(A) Prepare all the required journal entries and identify the fund in which each entry was recorded
for the fund financial statements.
(B) Prepare all the required journal entries and identify the type of activity for the government-
wide financial statements.
Fund Financial Statements – Enterprise fund
6/14
Due from General fund
52,000
Other financing Source – Transfers in – General fund
52,000
6/30
Cash
52,000
Due from General fund
52,000
(B) Government-wide financial statements – Governmental activities
6/14
No entry
6/30
Transfers out – Swimming pool
52,000
Cash
52,000
Government-wide financial statements – Business-type activities
6/14
No entry
6/30
Cash
52,000
Transfers in – General fund
52,000
Learning Objective: 16-11
Topic: Interfund transactions
Difficulty: 3 Hard
Blooms: Apply
AACSB: Knowledge Application
AICPA: BB Industry
AICPA: FN Measurement
[QUESTION]
71. On August 21, 2018, Fred City transferred $100,000 from one fund to another fund to cover
major repairs to the town hall building.
Required:
Prepare all the required journal entries and identify the fund in which each entry was recorded for
the governmental fund financial statements.
Governmental fund financial statements – General fund
8/21
Other financing uses – Transfers out – Capital projects fund
100,000
Cash
100,000
Governmental fund financial statements – Capital projects fund
8/21
Cash
100,000
Other Financing Sources – Transfers in – General fund
100,000
Learning Objective: 16-04
Learning Objective: 16-11
Topic: Funds―Distinguish the types―Governmental
Topic: Interfund transactions
Difficulty: 2 Medium
Blooms: Apply
72. On January 1, 2018, Wakefield City purchased office supplies for $40,000. During the year,
$35,000 of these supplies were used.
Required:
Record the journal entries for these transactions using the purchases method. (Disregard the
encumbrance entries.)
73. On January 1, 2018, Wakefield City purchased office supplies for $40,000. During the year,
$35,000 of these supplies were used.
Required:
Record the journal entries for these transactions using the consumption method. (Disregard the
encumbrance entries.)
74. The town council adopted an annual budget estimating general revenues of $2,000,000,
approved expenditures for general town operations of $1,700,000, and use of other financing
reources of $130,000.
Required:
75. Property taxes of 1,500,000 are levied for Miner County. All except 5% of the taxes are
expected to be collected within 60 days of year-end.
Required:
Prepare the required journal entry and identify the fund in which it is recorded.
76. Shell City makes a transfer of $100,000 from the General fund to the Debt service fund.
Required:
Prepare the required journal entries and identify the funds in which they are recorded.
Other financing sources – Transfer in – General fund
100,000
Learning Objective: 16-11
Topic: Interfund transactions
Difficulty: 2 Medium
Blooms: Apply
AACSB: Knowledge Application
AICPA: BB Industry
AICPA: FN Measurement
[QUESTION]
77. Prepare the journal entry and identify the fund to record Simple City’s purchase order of two
trucks for $100,000. Identify the fund in which the entry is recorded.
In General fund:
Encumbrances outstanding
78. Simple City has recorded the purchase order of two trucks for a total of $100,000.
Prepare the journal entries to reflect that the two trucks have been received with an invoice
amount of $105,000. This invoice has been approved but not yet paid. Identify the fund in which
the entries are recorded.
In General fund:
Encumbrances – Trucks
Vouchers (or Accounts) payable
79. A $5,000,000 bond is issued by Northern City to build a new hospital and the proceeds of the
bond are received directly by the fund that will be disbursing the monies for the hospital
construction.
Required:
Prepare the journal entry and identify the fund in which it is recorded to reflect the bond issue.
80. In May of 2018, the Town of Anthrop receives a $60,000 grant restricted for transporting all
senior citizens to polling locations on Election Day in November of 2018.
Required:
Prepare the journal entry, and identify the fund in which it is recorded, to record the receipt of the
grant.
81. The Town of Anthrop has recorded the receipt of a $60,000 grant restricted for transporting
all senior citizens to polling locations on Election Day in November of 2018. The town now
spends $60,000 to transport the citizens on Election Day.
Required:
Prepare the journal entry (or entries), and identify the fund for recording, to record that the town
spends $60,000 of the grant it received to transport senior citizens on Election Day.
82. The City of Kamen collected $17,000 from parking meters that must be transferred to the
county government in the next thirty days.
Required:
For fund financial statements, prepare the journal entry for the collection of the $17,000 from
parking meters, including the fund type in which the entry would have been recorded.
83. The Trumbull County legislature voted to set aside $500,000 to have new street signs
produced for county roads..
Required:
For governmental fund financial statements, prepare the journal entry for the adjustment to the
fund balance of the general fund.
84. Holloway City issues bonds in the amount of $700,000 to finance the construction of a
sidewalk in a specific neighborhood. Repayment of the bonds will be derived from a special
assessment on the owners in the neighborhood. The government accepts legal obligation for the
construction of the sidewalk. Total interest on the bonds will total $35,000 and will be repaid at
the time of repayment of the bonds.
Required:
Prepare the journal entries to record each of the following in preparation for (A) the government-
wide financial statements and (B) the governmental fund financial statements. For the
governmental fund financial statements, include the fund type in which the entry is recorded.
Prepare all entries for (A) and all entries for (B) separately.
Journal entries to record:
1) Issuance of the bonds
2) Payment to the contractor
3) The special assessment by the city on the neighborhood residents
4) The assessment collection by the city
5) Payment of the debt on the special assessment bonds
2) Payment to the contractor
Expenditures – Sidewalk
700,000
Cash
700,000
To record payment to contractor
3) Special assessment by the city
Debt service fund – Special assessment project
Taxes Receivable – Special Assessment
735,000
Revenue – Special Assessment
735,000
To record special assessment by city on the neighborhood residents
4) Assessment collection by the city
Cash
735,000
Taxes Receivable – Special Assessment
735,000
To record collection of special assessment
5) Payment of the debt
Expenditure – Special Assessment Bond
700,000
Expenditure – Interest
35,000
Cash
735,000
To record payment of bond
Learning Objective: 16-10
Topic: Special assessment projects
Difficulty: 3 Hard
Blooms: Apply
AACSB: Knowledge Application
AICPA: BB Industry
AICPA: FN Measurement