ACCY 161 Final Exam Fall 2008 1. Which of the following is not a characteristic of a fund as defined by GASB standards?

? a. An accounting entity. b. A segregated quantity of cash and other financial resources on deposit with a designated trustee. c. A fiscal entity. d. A self-balancing set of accounts 2. The GASB has identified which of the following as the "cornerstone" of all financial reporting in government? a. Understandability. b. Representational faithfulness. c. Accountability. d. Visibility e. Both c. and d. 3. The types of funds that may be used in governmental accounting are classified into the categories of activities performed by governments: a. governmental activities, business type activities b. governmental, business-type, and fiduciary c. governmental, proprietary, and fiduciary d. none of the above 4. The government-wide financial statements are intended to report on ____________________ : a. financial resources b. fiscal accountability c. operational accountability d. both a. and c. e. both b. and c. 5. The dual track includes a. The fund track b. The modified accrual track c. The government-wide track d. both a. and c. e. a. and b. and c. are all correct terminology 6. An example of other financing sources would be: a. Grants for capital improvements b. Proceeds of the sale of bonds c. Sales of tax anticipation notes d. both a. and b. are correct e. a. and b. and c. are all correct 7. In governmental financial reporting the internal service fund is included in a. Business types activities b. Governmental activities c. Governmental funds d. Both b and c. e. None of the above reported separately 8. The measurement focus of economic resources is related to: a. Governmental activities financial statements b. Business-type activities financial statements c. Fiduciary funds financial statements d. both a. and b. are correct e. a. and b. and c. are all correct

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ACCY 161 Final Exam Fall 2008 9. When equipment that is to be used by an activity accounted for by the General Fund of a government is received, it should be recorded in the General Fund as a (an) a. Capital Asset. b. Appropriation. c. Encumbrances. d. Expenditure. 10. In governmental financial reporting the fiduciary funds are included in the a. Fund financial statements b. Governmental activities statements c. Bog a. and b. are correct 11. The financial results of blended components are include in a. the governmental fund statements b. the government wide statements c. both a. and b. are correct they are included in both but disclosed differently 12. The section of the comprehensive annual financial report that presents tables and charts showing social and economic data in addition to financial trends and the fiscal capacity of the government is the: a. Introductory section. b. Statistical section. c. Management discussion and analysis section. d. Financial section. 13. ________________________ refers to the concept that current-year revenues are sufficient to pay for services provided that year, so that future taxpayers will not be required to assume the burden for services previously provided. a. Interperiod equity b. Responsibility accounting c. Budgetary control d. a. and b. and c. are all correct 14. Recognizing revenues when measurable and available for paying current obligations and expenditures when incurred describes which basis of accounting? a. Accrual. b. Modified accrual. c. Modified cash. d. Budgetary e. Fund 15. Estimated revenues has a: a. credit balance b. debit balance 16. When a vehicle is ordered by a government, the purchase order should be recorded in the General Fund as a debit to a. Appropriations. b. Equipment. c. Encumbrances d. Expenditures. 17. In accounting for state and local governments the modified accrual basis is recommended for a. Proprietary and fiduciary funds. b. Proprietary funds only. c. Governmental funds only d. All funds.

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ACCY 161 Final Exam Fall 2008 18. When the budget of a government is adopted and Estimated Revenues exceed Appropriations, the excess is a. Credited to Fund Balance. b. Debited to Fund Balance. c. Debited to Reserve for Encumbrances. d. Credited to Reserve for Encumbrances. e. None of the above 19. Which of the following steps in the acquisition of goods and services by an activity accounted for by the General Fund occurs first? a. Disbursement. b. Appropriation. c. Encumbrance. d. Expenditure. 20. An example of a proprietary fund is a (an) a. Special revenue fund. b. Investment trust fund. c. Internal service fund. d. Debt service fund. e. both b. and c. are correct 21. When the budget of a government is recorded and Appropriations exceeds Estimated Revenues, the Fund Balance account is 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. 22. The expenditures control account of a government is debited when a. The budget is recorded. b. Supplies previously encumbered are received. c. Supplies are ordered. d. The invoice is paid. e. None of the above 23. The General Fund has transferred cash to the appropriate fund for eventual retirement of term bonds maturing in 10 years. Which funds would record this transaction? a. General Fund: Yes; Capital Projects Fund: No; Debt Service Fund: Yes b. General Fund: No; Capital Projects Fund: No; Debt Service Fund: Yes c. General Fund: Yes; Capital Projects Fund: No; Debt Service Fund: No d. General Fund: Yes; Capital Projects Fund: Yes; Debt Service Fund: Yes 24. When supplies ordered for use in an activity accounted for in the General Fund of a government 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 e. None of the above 25. The measurement focus that should be used in preparing fund financial statements is: Governmental funds Proprietary funds Fiduciary funds A) Current financial resources Economic resources Current financial resources B) Current financial resources Economic resources Economic resources C) Current financial resources Current financial resources Economic resources D) Economic resources Current financial resources Current financial resources
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ACCY 161 Final Exam 26. The basis of accounting that should be used in preparing fund financial statements is: A) B) C) D) Governmental funds Modified accrual Modified accrual Modified accrual Accrual Proprietary funds Accrual Modified accrual Accrual Modified accrual

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Fiduciary funds Modified accrual Modified accrual Accrual Accrual

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The following applies to questions 27 to 30: The City of Orange just passed its annual budget and it was approved by the mayor. It included estimated property taxes of $5,000; sales and use taxes of $7,000; investment income of $1,000; the sales of bonds for a new police station of $3,000. Appropriations for the year were estimated to be $15,000. The budgetary entry for estimated revenue would be a: a. for $16,000 b. for $13,000 c. for $8,000 d. for $12,000 e. none of the above Payroll payments are made for $500, this will result in an accounting entry for: a. a debit to encumbrances b. a debit to expenditures c. a debit to appropriations d. both a. and b. are correct e. a. and b. and c. are all correct Sales tax of $2,000 is collected. There is an accounting entry for: a. A debit to fund balance b. A credit to estimated revenues c. A debit to estimated revenues d. A credit to accounts receivable e. None of the above are correct When the bonds are sold there in an accounting entry for: a. Bonds payable b. Other financing sources c. Appropriations d. both a. and b. are correct e. a. and b. and c. are all correct

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