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Student name:__________
1) For each of the following expenditure items, indicate its correct classification scheme
suggested by GASB standards. Use each choice only once.
A.Function
B.Organization unit
C.Activity
D.Character
E.Object
_____ 1. Public Safety
_____ 2. City clerk
_____ 3. Salaries and wages
_____ 4. Capital acquisitions
_____ 5. Fire Department—Building Inspection
2) For each revenue source listed indicate its correct classification recommended by GASB
standards.
A.Taxes
B.Licenses and permits
C.Intergovernmental revenue
D.Charges for services
E.Fines and forfeits
F.Miscellaneous
_____ 1. Capital grant received by a city from a state
_____ 2. Property tax levied by city
_____ 3. Library use fees
_____ 4. Building permit
3) The Fort Ellis city council approved and adopted its fiscal year budget. The budget for
the General Fund contained the following amounts:
Estimated revenues
$ 1,900,000
Appropriations
1,860,000
Authorized transfer to the debt service fund
30,000
When the General Fund budget for the fiscal year is recorded, indicate whether each of the
following accounts should be debited (D), credited (C), or is not affected (N).
_____ 1. Estimated revenues
_____ 2. Budgetary Fund balance
_____ 3. Appropriations
_____ 4. Estimated other financing uses
_____ 5. Estimated other financing sources
4) At the time items for which purchase orders had previously been issued are received,
indicate whether each of the following accounts of the General Fund should be debited (D),
credited (C), or is not affected (N).
_____ 1. Encumbrances
_____ 2. Encumbrances Outstanding
_____ 3. Expenditures
_____ 4. Vouchers payable
_____ 5. Appropriations
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5) Indicate whether the following revenues should be classified as program revenues or
general revenues on the government-wide statement of activities.
_____ 1. Unrestricted operating grants that can be used at the discretion of the city council.
_____ 2. Capital grants restricted for highway construction.
_____ 3. Charges for building inspections.
_____ 4. A special assessment for snow removal.
_____ 5. Fines and forfeits.
_____ 6. Motor vehicle fuel taxes restricted for road repair.
_____ 7. Unrestricted investment earnings.
6) The City of Jackson Hole adopted the following General Fund budget for the fiscal year:
Estimated revenues:
Taxes
$ 3,000,000
Intergovernmental revenues
1,000,000
Licenses and permits
400,000
Fines and forfeits
150,000
Miscellaneous revenues
100,000
Total estimated revenues
$ 4,650,000
Appropriations:
General government
$ 1,000,000
Public safety
2,000,000
Public works
950,000
Health and welfare
850,000
Miscellaneous revenues
50,000
Total appropriations
$ 4,850,000
Prepare a summary general journal entry to record the adopted budget at the beginning of the
fiscal year. (If no entry is required for a transaction/event, select “No Journal Entry
Required” in the first account field.)
7) During the first month of its fiscal year, the City of Jackson Hole issued the following
purchase orders and contracts:
General government
Public safety
Public works
Health and welfare
Miscellaneous
Total
Show the summary general journal entry to record the issuance of the purchase orders and
contracts. (If no entry is required for a transaction/event, select “No Journal Entry
Required” in the first account field.)
8) The following information is provided about some of the Town of Truesdale’s General
Fund operating statement and budgetary accounts for the fiscal year ended June 30.
Estimated revenues
$ 3,150,000
Revenues
3,190,000
Appropriations
3,185,000
Expenditures
3,175,000
Estimated other financing sources
400,000
Encumbrances
20,000
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Encumbrances outstanding
20,000
Budgetary fund balance
(calculate)
The Town of Truesdale will honor all of its outstanding encumbrances in the next fiscal period.
Prepare the journal entry(ies) to close budgetary accounts required to be closed at the fiscal year
end using the information provided. (If no entry is required for a transaction/event, select
“No Journal Entry Required” in the first account field.)
9) Define the term revenue and distinguish between revenue and other financing sources.
10) Explain the difference between an expenditure and an expense.
11) What benefits do financial statement users derive from the net (expense) revenue format
used for the government-wide statement of activities?
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12) How should depreciation expense be reported in the government-wide statement of
activities?
13) How does the use of encumbrance procedures improve budgetary control over
expenditures?
14) 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.
15) Which of the following is generally not an expense allocated to a government function or
program?
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A) Inventory of supplies expense.
B) Administrative payroll.
C) Interest on general long-term liabilities.
D) Depreciation expense on capital assets.
16) 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.
17) Which of the following best defines net (expense) revenue as reported on the
government-wide statement of activities?
A) Expenses minus the total of program and general revenues.
B) Expenses minus program revenues.
C) The total of program and general revenues minus expenses.
D) Program revenues minus expenses.
18) 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.
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19) Which of the following expenses would most likely be reported as a separate line item on
the statement of activities?
A) Interest on long-term debt.
B) Inventory costs.
C) Administrative expenses.
D) Capital outlays.
20) Which of the following would not be reported as charges for services on the statement
of activities?
A) Parking fines.
B) Business permits.
C) Registration fees.
D) Grant for summer programs.
21) 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.
22) Which of the following would always be classified as a general revenue?
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A) Grant proceeds.
B) Special assessment charges for snow removal.
C) Library fines.
D) Fuel taxes earmarked for maintenance of roads and bridges.
23) The cost to purchase a good or service is the definition of an
A) Expenditure.
B) Expense.
C) Other financing use.
D) Interfund transfer out.
24) Which of the following would not appear on a governmental fund balance sheet?
A) Accounts receivable.
B) Inventory.
C) Vouchers payable.
D) Bonds payable.
25) When the budget for the General Fund is recorded, the required journal entry will include
which of the following?
A) A credit to Estimated Revenues.
B) A debit to Encumbrances.
C) A credit to Appropriations.
D) A credit to Fund Balance.
26) When the budget of a government is recorded and Appropriations exceeds Estimated
Revenues, how is the Budgetary Fund Balance account recorded?
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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.
27) Which of the following accounts is a budgetary account of a governmental fund?
A) Fund Balance.
B) Appropriations.
C) Expenditures.
D) Other Financing Sources.
28) 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.
29) 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
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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 soon enough after year-end to pay current period
obligations.
30) 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.
31) The Expenditures control account of a government is debited when:
A) The supplies budget is recorded.
B) Supplies are ordered.
C) Supplies previously encumbered are received.
D) The invoice for supplies is paid.
32) Which of the following is true regarding other financing sources and other financing
uses?
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A) Both must be reported separately from revenues and expenditures in the statement of
revenues, expenditures, and changes in fund balances.
B) These terms are used to distinguish program revenues or expenses from general
revenues or expenses.
C) These terms are used for minor revenue or expenditure items that are peripheral to
the government’s mission.
D) Other financing sources are equivalent to gains and other financing uses are
equivalent to losses.
33) Under which basis of accounting for a government should revenues be recognized in the
period when they are measurable and available?
Accrual basis
Modified accrual basis
A)
Yes
No
B)
No
No
C)
No
Yes
D)
Yes
Yes
A) Choice A.
B) Choice B.
C) Choice C.
D) Choice D.
34) The expenditure classification “Public Safety” is an example of which of the following
types of classifications?
A) Activity.
B) Function.
C) Character.
D) Object.
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35) When supplies ordered for use in an activity accounted for in the General Fund are
received at an actual price that is more than the estimated price on the purchase order, the
Encumbrance account is:
A) Debited for the estimated price on the purchase order.
B) Credited for the estimated price on the purchase order.
C) Debited for the actual price for the supplies received.
D) Credited for the actual price for the supplies received.
36) A statement of revenues, expenditures, and changes in fund balances—budget and actual
is:
A) Required by GAAP for the General Fund, special revenue funds, and all other
governmental fund types for which an annual budget has been adopted.
B) Required by GAAP for internal management reports only; not permitted for external
financial reporting.
C) Required by GAAP for all governmental fund types.
D) Optional under GAAP, as long as a budgetary comparison schedule is presented.
37) The account “Interfund Transfers In” would be classified in a General Fund statement of
revenues, expenditures, and changes in fund balance as a(an):
A) Revenue.
B) Other financing use.
C) Other financing source.
D) Current liability.
38) The expenditure classification “City Attorney” is an example of which of the following
types of classification?
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A) Function.
B) Organization unit.
C) Character.
D) Program.
39) When the budget of a government is adopted and Estimated Revenues exceed
Appropriations, the excess is:
A) Credited to Budgetary Fund Balance.
B) Debited to Budgetary Fund Balance.
C) Debited to Encumbrances Outstanding.
D) Credited to Encumbrances Outstanding.
40) Which of the following depict the typical order of steps in the acquisition of goods and
services by an activity recorded in the General Fund?
A) Appropriation, disbursement, encumbrance, expenditure.
B) Appropriation, encumbrance, expenditure, disbursement.
C) Encumbrance, appropriation, expenditure, disbursement.
D) Encumbrance, expenditure, appropriation, disbursement.
41) When equipment that is to be used by the General Fund is received, how should it be
recorded?
A) Capital Asset.
B) Appropriation.
C) Encumbrances.
D) Expenditure.
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42) The journal entry to record budgeted revenues will include which of the following?
A) A debit to Estimated Revenues.
B) A credit to Estimated Revenues.
C) A debit to Revenues Receivable.
D) Only a memorandum entry is necessary.
43) The County Commission of Seminole County adopted its General Fund budget for the
year ending June 30, comprising estimated revenues of $13,200,000 and appropriations of
$12,900,000. The journal entry Seminole County makes to record the budget will include which
of the following?
A) A credit to Appropriations, $12,900,000.
B) A credit to Encumbrances, $12,900,000.
C) A debit to Estimated Expenditures, $12,900,000.
D) A credit to Budgetary Fund Balance, $12,900,000.
44) One characteristic that distinguishes other financing sources from revenues is that other
financing sources:
A) Arise from debt issuances or interfund transfers in.
B) Increase fund balances when they are closed at year-end.
C) Provide financial resources for the recipient fund.
D) Have a normal credit balance.
45) What is the process by which a legal valuation is placed on taxable property called?
A) An appropriation.
B) A property tax levy.
C) Property assessment.
D) Ad valorem determination.
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46) The County Commission of Canyon County adopted its General Fund budget for the year
ending June 30, comprising estimated revenues of $13,200,000 and appropriations of
$12,900,000. The budgeted excess of estimated revenues over appropriations will be recorded as
which of the following?
A) A credit to Surplus Revenues, $300,000.
B) A debit to Estimated Excess Revenues, $300,000.
C) A credit to Budgetary Fund Balance, $300,000.
D) A memorandum entry only.
47) When the budget for the General Fund is recorded, the required journal entry will include
which of the following?
A) A credit to Estimated Revenues.
B) A debit to Encumbrances.
C) A debit to Appropriations.
D) Either a debit or credit to Budgetary Fund Balance, as appropriate.
48) Which of the following accounts is not closed at the end of the reporting period?
A) Deferred inflows of resources.
B) Revenues.
C) Expenditures.
D) Other financing sources.
49) The expenditure classification “Current Expenditures” is an example of which of the
following types of classifications?