1) An investment trust fund is used to account for the internal portion of a
multi-government investment pool, when the reporting government is trustee.
2) Long term liabilities of an enterprise fund are reported in the proprietary fund
statement and in government-wide statements.
3) The GASB Concept Statement on Service Efforts and Accomplishments Reporting
encourages state and local governments to include inputs of nonmonetary resources in
their financial reporting.
4) The journal entry to record a purchase order in the General Fund would be a debit to
encumbrances control account and credit Accounts Payable
5) Comparison of the legally approved budget with actual results of the General Fund is
not part of required supplementary information in the CAFR.
6) The
7) Fiduciary Fund activities report in terms of Additions and Deductions.
8) Proprietary Funds use the accrual basis of accounting.
9) Service Efforts and Accomplishments Reporting is mandatory for government
organizations.
10) Expenditures, encumbrances, and budgetary accounts are used by private
not-for-profit organizations.
11) The cash flow statements of private health care organizations, both not-for-profit
and for-profit, may use only the indirect method.
12) Capital assets constructed by an internal service fund are recorded in a capital
projects fund.
13) Health care organizations that are privately owned and operated to provide a return
to investors follow which standards:
A) GASB
B) FASB, including standards specifically for not-for-profits
C) FASB, excluding standards specifically for not-for-profits
D) None of the above
14) The Township of Thomasvilles General Fund has the following net resources at
year end:
$77,000 of prepaid insurance
$375,000 rainy day fund approved by the township governing board with specific
conditions for its use
$2,500 of supplies inventory
$61,000 state grant for snow removal
$150,000 contractual obligations for the purchase of equipment
$200,000 to be used to fund government operations in the future
Outstanding encumbrance of $80,000 for the purchase of furniture & fixtures (assume
no contractual obligation)
What would be the total Assigned fund balance?
A)$ 61,000
B)$ 77,000
C)$ 80,000
D)$150,000
15) Which of the following is True regarding Government-wide financial statements?
A) Prior year data must be presented
B) A Statement of Cash Flows is not required for Government-wide statements
C) Depreciation may only be reported as a charge in total to the general government
D) Fiduciary activities are only reported if they qualify as a major fund
16) A governmental fund Statement of Revenues, Expenditures, and Changes in Fund
Balances reported expenditures of $30 million, including capital outlay expenditures of
$9 million. Capital assets for that government cost $90 million, including land of $10
million. Depreciable assets are amortized over 20 years, on average. The reconciliation
from governmental changes in fund balances to governmental activities changes in
would reflect a(an):
A)Decrease of $1 million
B)Increase of $l million
C)Increase of $5 million
D)Decrease of $4 million
17) Which of the following would not be correct with respect to accounting for colleges
and universities under the jurisdiction of the FASB?
A)If both unrestricted and restricted resources are available for a restricted purpose, the
FASB requires that the institution recognize the use of unrestricted resources first
B)Accrual accounting is used. Revenues and expenses are reported at gross amounts
and gains and losses are reported net
C)Expenses are reported by function, either in the statements or in the notes
D)If an institution decides not to capitalize museum and other inexhaustible collections,
note disclosures are required regarding the collections
18) Premiums generated from the issuance of bonds for a capital projects fund are
generally:
A)Transferred to the General Fund
B)Retained in the capital projects fund
C)Transferred to the debt service fund
D) None of the above
19) The term special item is defined as:
A)Unusual or infrequent but within managements control
B)Frequent and unusual but within managements control
C) Frequent and unusual and not within managements control
D) Unusual or infrequent and not within managements control
20) Which of the following is notTrue regarding accounting and financial reporting for
private not-for-profit hospitals?
A)Expenses may be unrestricted or temporarily restricted depending on donor intent
B)Fund accounting is not required
C)The Statement of Cash Flows may use either the direct or indirect method
D)Net assets are classified as Unrestricted, Temporarily Restricted or Permanently
Restricted
21) Which of the following is not an example of a special-purpose government?
A)Village government
B)Tollway authority
C)Library district
D)Fire protection districts
22) Which of the following would not need to be addressed/adjusted in compiling the
government-wide statements?
A)Principal repayment on proprietary fund bonds
B)Issuance of general obligation bonds
C) Inter fund transfers among governmental funds
D) Interest accrual on general obligation bonds
23) Where in the basic financial statements would one find fiduciary activities reported?
A)In the fiduciary funds statements and in the governmental activities column of the
government-wide statements
B)In the fiduciary funds statements and in the business like activities column of the
government-wide statements
C)In the fiduciary funds statements only
D)In the government-wide statements only
24) A county treasurer maintains an investment pool in which several different towns in
the county hold investments. Where should the towns investments be recorded?
A)Investment Trust Fund
B)Agency Fund
C)Private-purpose Trust Fund
D)None of the above
25) Jefferson County maintains a tax agency fund for use by the County Treasurer to
record receivables, collections, and disbursements of all property tax collections to all
units of government in the county. In the year 2015, the following taxes were levied:
1>$8,820,000 in property taxes were levied for the General Fund, of which 2% are
deemed to be uncollectible.
2>$4,830,000 in property taxes werelevied for the school district.
3>$4,410,000 in property taxes were levied for a village in the county.
Required:
A.Prepare the journal entries for each unit and the Agency Fund to record these levies.
B.The agency fund then collected 90% of the levy for each fund. The Jefferson County
General Fund charges 1.5% of collections as a fee for maintaining the agency fund.
Prepare the journal entries for each unit and the Agency Fund to record these
collections and fees.
26) Which of the following could be recognized as contributed services revenue by a
not-for-profit hospital?
A)A high school student class volunteered to answer the telephone during the Friday
night midnight shift
B)An architect developed building plans for a new outpatient clinic
C)Both (a) and (b) above
D)Neither (a) nor (b) above
27) When converting fund financial records to government-wide financial statements,
worksheet entries are made to eliminate all of the following accounts except:
A)Interest Payable
B) Bond Proceeds
C)Debt Service Expenditure – Principal
D)Capital Expenditures
28) Which of the following is correct with respect to Internal Service Funds?
A)Internal service funds use modified accrual accounting and the current financial
resourcesmeasurement focus
B)Net position is to be reported in two categories: assigned and unassigned
C)Internal service funds account for long-term debt but not capital assets
D)All of the above are False statements
29) Student scholarships for which no service was required were applied to student
accounts in the amount of $5,000. What is the journal entry to record this event?
A)Debit: Tuition discount-Unrestricted-Student aid $5,000 Credit: Accounts Receivable
$5,000
B) Debit: Scholarship Expense $5,000 Credit: Accounts Receivable $5,000
C) Debit: Tuition waiver $5,000 Credit: Loan to student $5,000
D) None of the above
30) Sales taxes, income taxes, and motor fuel taxes are examples of which class of non
exchange transactions?
A) Imposed non exchange transactions
B) Derived tax revenues
C) Government-mandated non exchange transactions
D) Voluntary non exchange transactions
31) Which of the following is not a reconciliation required by GASB?
A) From governmental fund balance sheet to the Government-wide Statement of
Net Position
B) From governmental fund Statement of Revenues, Expenditures, and Changes
in Fund Balances to the Government-wide Statement of Activities
C) From enterprise fund balance sheet to the Government-wide Statement of Net
Assets
D) None of the above, all these reconciliations are required
32) On October 1, 2014, the City of Mizner issued $4,000,000 in 4%, general obligation
bonds at 101 for the purpose of constructing an addition to City Hall. The premium was
transferred to a debt service fund. A total of $3,975,000 was used to construct the
addition, which was completed prior to June 30, 2015 . The remaining funds were
transferred to the debt service fund. The bonds were dated October 1, 2014, and paid
interest on April 1 and October 1 . The first of 20 annual principal payments of
$200,000 is due October 1, 2015 . The fiscal year for Mizner is July 1- June 30 .
How would the government account for the unused bond proceeds?
A)As a revenue in the debt service fund and as an expenditure in the capital projects
fund
B)As another financing source in the capital projects fund and as another financing use
in the debt service fund
C)As another financing source in the government-wide Statement of Activities
D)As another financing source in the debt service fund and as another financing use in
the capital projects fund
33) According to GASB 34, Enterprise funds must be used when:
A)Debt is backed solely by fees and charges
B)A legal requirement exists that the cost of providing services for an activity, including
capital costs, be recovered through fees or charges
C)A government has a policy to establish fees and charges to cover the cost of
providing services for an activity
D) Any of the above apply
34) Public sector audits differ from those of commercial businesses in which of the
following ways?
A)The auditor is not required to be independent
B)The auditor reports to outside agencies as well as management of the organization
C)The auditor does not use sampling
D)All of the above
35) Which of the following should appear within the equity (net position) section of a
federal agency balance sheet?
A)Net Position Unexpended Appropriations
B)Fund Balance with Treasury
C)Both (a) and (b) above
D)Neither (a) nor (b) above
36) A government had the following transfers reported in its governmental funds
Statement of Revenues, Expenditures, and Changes in Fund Balances: (1) a transfer
from the General Fund to a debt service fund in the amount of $l, 100,000; (2) a transfer
from the General Fund to an internal service fund in the amount of $1,300,000; and (3)
a transfer from the General Fund to a special revenue fund in the amount of $500,000.
The amount that would be shown as a transfer out in the governmental activities
column in the Statement of Activities would be:
A)$0
B)$1,300,000
C)$1,600,000
D)$2,400,000
37) Which of the following serial bonds has the first scheduled installment delayed for a
period of more than 1 year after the date of the issue?
A)Annuity Serial Bonds
B) Regular Serial Bonds
C) Irregular Serial Bonds
D) Deferred Serial Bonds
38) If taxes and/or special assessments are levied by the General Fund, and then are
subsequently transferred to the debt service fund, they are:
A)Recorded as revenues of the debt service fund
B)Included as transfers out in the General Fund but are not as revenue in that fund
C)Included in the revenues of the General Fund and are also reported by the General
Fund as transfers out to the debt service fund
D)Recorded as an expense and voucher payable by theGeneral Fundand are recorded as
a revenue and receivable by the debt service fund
39) Cash provided by the General Fund for a capital project would be recorded in a
capital projects fund as a (an):
A)Revenue
B)Other Financing Use
C)Direct addition to Fund Balance
D)Other Financing Source Transfer In
40) Which of the following is True regarding fiduciary fund statements?
A)Fiduciary fund statements include the Statement of Fiduciary Net Position and the
Statement of Changes in Fiduciary Net Position
B)Fiduciary fund statements are prepared using the current financial resources
measurement focus and modified accrual basis of accounting
C)Both of the above
D)Neither of the above
41) Which organization promulgates Statements of Federal Financial
AccountingStandards?
A)The American Institute of Certified Public Accountants
B)The Federal Accounting Standards Advisory Board
C)The U.S. Office of Management and Budget
D)The U.S. Government Accountability Office
42) Which of the following is not an objective of federal financial reporting?
A) Budgetary Integrity
B)Increase Taxpayer Awareness
C) Stewardship
D)Operating Performance
43) GASB No. 53 establishes reporting requirements for governments entering into
derivative instruments. What is the treatment of hedging vs. investment derivatives?
44) What are the four objectives that should be followed with respect to federal
financial reporting according to SFFAC #1 as issued by the FASAB?
45) What is a bond refunding and why do governments refund bonds?
46) On January 1,2015, the Town of Walton issued $ 5,000,000 of 4% tax supported
bonds. The bonds are dated January 1, 2015 with interest payment dates of June 30 and
December 31 . The first of 10 annual principal payments is due on December 31, 2015 .
The bonds were sold at a $48,000 premium that was transferred to the Debt Service
Fund from the capital projects fund to be used to fund the first payment. Cash sufficient
to cover interest and principal payments for the year less the premium is transferred
from the General Fund on June 1st.
Required: Record any and all entries to be made by the Debt Service Fund for the bond
issued for the year 2015 (including closing entries)
47) The Village of Lake Georges General Fund has the following net resources at
December 31, 2015
$5,000 of prepaid insurance
$ 25,000 of property taxes receivable currently due and expected to be collected within
60 days
$300,000 rainy day fund approved by the township governing board
$82,500 of supplies inventory
$33,000 government grant for city park maintenance
$10,000 contractual obligations for the purchase of park fixtures
$200,000 to be used to fund government operations in the future
Required: Prepare the fund balance section of the Balance Sheet
48) What are the fund-basis financial statements for each of the following fund
categories?
Fiduciary
Proprietary
Governmental
49) What are the four classes of nonexchange revenues?
50) Southeastern State University has chosen to report as a public university reporting
as a special-purpose entity engaged only in business-type activities. Deferred Revenues
were reported as of July 1, 2014 in the amount of $5,000,000. Record the following
transactions related to revenue recognition for the year ended June 30, 2015 . Include in
the account titles the proper revenue classification (operating revenues, nonoperating
revenues, etc.):
