37) The comprehensive annual financial report (CAFR) of a government should contain a
statement of revenues, expenses, and changes in fund net position for:
A) Both proprietary and governmental funds.
B) Proprietary but not governmental funds.
C) Governmental but not proprietary funds.
D) Proprietary and fiduciary funds.
38) Which of the following activities or services would most likely not be accounted for by an
internal service fund?
A) Electronic data processing.
B) Central purchasing, warehousing, and issuing of supplies.
C) Municipal swimming pool.
D) Risk management.
39) When a supplies internal service fund records a billing to the General Fund, the journal entry in
the internal service fund will include:
A) A debit to Due from General Fund.
B) A debit to Due to General Fund.
C) A debit to Billings to Department.
D) A debit to Inventory of Supplies.
40) When a supplies internal service fund records a billing to the General Fund, the journal entry in
the General Fund will include:
A) A debit to Cost of Supplies Issued.
B) A credit to Interfund Loans Payable.
C) A debit to Expenditures.
D) A credit to Billings to Department.
41) Which of the following is not true regarding proprietary funds?
A) The difference between assets plus deferred outflows of resources and liabilities plus deferred
inflows of resources of proprietary funds is called “net assets.”
B) Proprietary funds record long-term debt directly in the fund accounts.
C) Proprietary funds record capital assets directly in the fund accounts.
D) Proprietary funds present a statement of cash flows.
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42) Under GASB standards, an internal service fund should prepare all of the following financial
statements except a:
A) Statement of revenues, expenditures, and changes in fund balance.
B) Statement of revenues, expenses, and changes in net position.
C) Statement of net position.
D) Statement of cash flows.
43) Which of the following illustrates the appropriate basis of accounting for enterprise and
internal service funds?
Enterprise Funds
Internal Service Funds
A.
Modified Accrual
Modified Accrual
B.
Modified Accrual
Accrual
C.
Accrual
Modified Accrual
D.
Accrual
Accrual
A) Choice A.
B) Choice B.
C) Choice C.
D) Choice D.
44) An internal service fund normally uses which of the following budgetary accounts?
A) Estimated Revenues.
B) Appropriations.
C) Encumbrances.
D) An internal service fund normally does not use budgetary accounts.
45) Goods and services provided by internal service funds to other departments of the government
are typically priced to:
A) Cover variable costs only.
B) Cover full costs (both fixed and variable).
C) Cover full costs, plus an additional charge to capital maintenance and anticipated expansion
needs.
D) Cover full costs, plus an additional charge to ensure a reasonable profit.
46) Which of the following should be accounted for in an internal service fund?
Light poles to be paid for in installments by affected property owners
$
350,000
Van used to transport supplies to all city departments on a cost
reimbursement basis
65,000
Equipment used for supplying electric power to residents
1,250,000
A) $ 65,000.
B) $ 415,000.
C) $1,250,000.
D) $1,315,000.
47) Which of the following should be accounted for in an enterprise fund?
Light poles to be paid for in installments by affected property owners
$
350,000
Van used to transport supplies to all city departments on a cost
reimbursement basis
65,000
Equipment used for supplying electric power to residents
1,250,000
A) $ 65,000.
B) $ 415,000.
C) $1,250,000.
D) $1,315,000.
48) When a new internal service fund is established with a transfer of funds (not to be repaid),
which account would be credited in the internal service fund?
A) Cash.
B) Interfund Transfer In.
C) Interfund Transfer Out.
D) Estimated Revenues.
49) The City of Crescent Hill operates a central motor pool as an internal service fund for the
benefit of the city’s other funds and departments. In the current year, this fund charged the Parks
Department $30,000 for vehicle rentals. What account should the internal service fund use to
record these charges?
A) Interfund Transfers In.
B) Interfund Exchanges.
C) Billings to Departments.
D) Cost of Providing Rentals to Other Funds and Units.
50) The City of Crescent Hill operates a central motor pool as an internal service fund for the
benefit of the city’s other funds and departments. In the current year, this fund billed the Parks
Department $30,000 for vehicle rentals. If the Parks Department is a governmental fund, which
account should the Parks Department use to record these billings?
A) Interfund Transfers In.
B) Interfund Exchanges.
C) Expenditures.
D) Cost of Rentals from Other Funds and Units.
51) When utility customers are billed during the year, the enterprise fund journal entry will
include:
A) A debit to Sales of Water.
B) A debit to Cash – Restricted.
C) A debit to Customer Accounts Receivable.
D) A debit to Billings to Customers.
52) When a new utility customer submits a deposit, the enterprise fund journal entry will include:
A) A credit to Customer Deposits.
B) A debit to Customer Deposits.
C) A debit to Sales of Water.
D) A credit to Sales of Water.
53) Customers’ meter deposits, which cannot be spent for normal operating purposes, would be
classified as restricted cash in the balance sheet of which fund type?
A) Internal service fund.
B) Private-purpose trust fund.
C) Enterprise fund.
D) Special revenue fund.
54) Which of the following organizations or units would least likely be accounted for by an
enterprise fund?
A) A golf course.
B) An airport.
C) A computer department.
D) A sports stadium.
55) Which of the following accounts would appropriately be included on an enterprise fund
balance sheet?
A) Fund Balance: No; Net Position—Unrestricted: Yes.
B) Fund Balance: Yes; Net Position—Unrestricted: No.
C) Fund Balance: No; Net Position—Unrestricted: No.
D) Fund Balance: Yes; Net Position—Unrestricted: Yes.
56) The following cash transactions were among those reported by Genesee County’s Wastewater
Enterprise Fund for the year:
Proceeds from sale of revenue bonds for construction
$
5,000,000
Interest income
300,000
Capital contributed by developers
1,000,000
In the Wastewater Enterprise Fund’s statement of cash flows for the year ended December 31, what
amount should be reported as cash flows from capital and related financing activities?
A) $5,000,000.
B) $5,300,000.
C) $6,000,000.
D) $6,300,000.
57) The following cash transactions were among those reported by Genesee County’s Wastewater
Enterprise Fund for the year:
Proceeds from sale of revenue bonds for construction
$
5,000,000
Interest income
300,000
Capital contributed by developers
1,000,000
In the Wastewater Enterprise Fund’s statement of cash flows for the year ended December 31, what
amount should be reported as cash flows from investing activities?
A) $ 300,000.
B) $1,300,000.
C) $5,300,000.
D) $6,300,000.
58) The liability for general obligation bonds issued for the benefit of a governmentally owned
electric utility and serviced by its earnings should be recorded in:
A) An enterprise fund.
B) An internal service fund.
C) An enterprise fund and the business-like activities accounts.
D) The governmental activities accounts.
59) The Central City Golf Course, an enterprise fund, purchased a new stove for use in the course‘s
snack shop. The debit for the entry to record the purchase should be to:
A) Expenditures.
B) Purchases.
C) Equipment.
D) General capital assets.
60) Which of the following would be reflected in the operating statement of a proprietary fund?
A) Accrual of interest expense.
B) Repayment of the principal of debt.
C) Issuance of debt.
D) Purchase of a capital asset.