Chapter 18 – Governmental Entities: Special Funds and Government–Wide Financial Statements
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SOLUTIONS TO EXERCISES
E18-1 Multiple-Choice Questions on Government Financial Reporting
1. a
2. d
3. b
4. a
5. a
6. b
7. a – $8,839,000 = assets of $14,839,000 minus liabilities of $6,000,000
8. c – $7,150,000 = capital assets (net) of $12,500,000 minus long-term debt of
9. c – $1,035,000 = net position of $8,839,000 minus $7,150,000 minus $654,000
10. a – (answers b, c, and d each include a fiduciary fund which is not a major fund)
11. d
12. c
Chapter 18 – Governmental Entities: Special Funds and Government–Wide Financial Statements
E18-2 Multiple-Choice Questions on Governmental Funds [AICPA Adapted]
1. d
2. b
3. a
4. c
5. c
6. b
E18-3 Multiple-Choice Questions on Proprietary Funds [AICPA Adapted]
1. b
2. d
3. d
4. b
5. c
6. c – Prepaid insurance would be reported as an asset.
7. b
8. c
9. c
Chapter 18 – Governmental Entities: Special Funds and Government–Wide Financial Statements
E18-4 Multiple-Choice Questions on Various Funds
1.
c –
The additions – investment earnings include the $50,000 of dividends and the
$35,000 of interest earned. The contribution is reported as an addition –
contributions.
2.
a –
The entries in the trust fund to record the resources spent would appear as
follows:
Deductions – Benefits
75,000
Vouchers Payable
Vouchers Payable
75,000
Cash
3.
d –
4.
d –
Income is determined as follows:
Revenue – Charges for Services
$100,000
Operating Expenses
(45,000)
Depreciation Expense
(40,000)
Interest Expense
(5,000)
Income
$ 10,000
5.
c –
The assets at June 30, 20X7 appear as follows:
Cash
$ 96,000
Due from Other Funds
7,000
Computer Equipment (net)
610,000
Total Assets
$713,000
6.
b –
This is an example of an interfund services provided or used transaction. The
general fund would debit expenditures.
7.
a –
This is an example of an interfund services provided or used transaction. The
enterprise fund would debit operating expenses.
8.
b –
The net position would be for the $600,000 transfer in plus the $10,000 of
income for the period.