Deck 15: Government and Not for Profit Accounting

Question 1

According to GASB Statement number 34 government funds account for:

A)​Activities that provide citizens with services financed by taxes and intergovernmental grants
B)​Activities that specifically relate to revenue recognition
C)​Activities that related specifically to expenditures
D)​Activities that specifically relate to reporting periods.

Answer 1

A

Question 2

The primary financial Reporting standard setting board for the federal government is likely to be:

A)​SEC
B)​IRS
C)​CMA
D)​GAO

Answer 2

D

Question 3

Which fund is likely restricted to expenditure for specific operational purposes:

A)​Fiduciary Fund
B)​Capital Fund
C)​Debt Fund
D)​Speical revenue Fund

Answer 3

D

Question 4

Revenues from voluntary non exchange transactions, such as donations and certain grants, should be recognized in governmental funds when

A)​Assets are determined useful
B)​the assets are receive
C)​The assets are fully depreciated
D)​Expense is matched with revenue

Question 5

Taxes that are levied in one year but not available until the following year are recognized as:

A)​Deferred Expenses
B)​Accrued Expense
C)​Deferred Inflows of resources
D)Accrued inflows of resources​

Question 6

The difference between assets and liabilities in a governmental unit is called:

A)​Equity
B)​Governmental equity
C)​Fund Balance
D)​Distributive Cash Flow

Question 7

GASB standards for recording pension expenses require a calculation of the difference between the pension plan's total liabilities and the pensions:

A)​Permanent Life
B)​Accrued liabilities
C)​Plans Assets
D)​Plans estimated useful Life

Question 8

An environmental distinction between a business enterprise and governmental unit is ownership vs:

A)​Assets
B)Liabilities​
C)​Jurisdiction
D)​Fund Raising

Question 9

Which government funds account for resources that are legally restricted so only their earnings, not principal may be used to finance operations:

A)​Permanent Funds
B)​Special revenue Funds
C)​Capital Project Funds
D)​Debt Service Funds

Question 10

Which fund can be used for payment of long term debts and interest:

A)​Special revenue Fund
B)​Permanent Fund
C)​Debt Service Fund
D)​General Fund

Question 11

Interperiod equity may be demonstrated by showing whether current year revenue is sufficient to pay for current year services and whether:

A)​Revenue will be recognized within the period
B)​Future taxpayers will be required to assume burden for services previously provided
C)Revenue will be matched with expense in a government year​
D)​Government years do not necessarily coincide with calendar years

Question 12

Tax anticipation notes are an example of

A)​Deferred assets
B)​Deferred liability
C)​Accrued assets
D)Short-term operating debt.​

Question 13

Fiduciary funds account for resources for which the government unit:

A)​Reports under specific guidelines
B)​Reports as strictly useful cash
C)​Acts as a trustee
D)​Acts as a holding account

Question 14

Which of the following organizations believe taxpayers have the right to know and receive information about government activities:

A)​FASB
B)​GAO
C)​GASB
D)​AICPA

Question 15

Nongovernmental entities are likely to follow AICPA bulletins and:

A)​GASB
B)​FASB
C)​DSAB
D)​FBCPA

Question 16

Increases in financial resources from governmental purposes can include proceeds from bond issues and :

A)​Sale of fixed assets
B)​Sale from goods
C)​Sale of services
D)​All of above

Question 17

Which fund has no restriction and is available for operational expense:

A)​Fiduciary Fund
B)​General Fund
C)​Proprietary funds
D)​Payment Funds

Question 18

Donations of capital assets are not recognized in governmental funds.Rather, donated capital assets are recorded:

A)​As liabilities with no future date
B)​As general fixed assets
C)​As special revenue funds
D)As special government debt funds​

Question 19

Government and not-for-profit organizations comprise approximately what percent of the US expenditures

A)​One Fourth
B)​One Third
C)​One Fifth
D)​One Eighth

Question 20

State and local governments are likely to follow which of the following:

A)​FASB
B)AICPA​
C)​GASB
D)​AICMA

Question 21

Record the following journal entries:
?
Vouchers were approved for nonencumbered items on December 31.
Salaries $50,000
Other expenses $100,000
Vouchers totaling $500,000 were paid
Transfer of $20,000 is made to the debt service fund
?

Question 22

Assume a budget for City has been approved and the following information is available:
Estimated inflow from revenue $900,000
Estimated inflow from general long term debt $100,000
Transfer from other funds $250,000
Sales of fixed Assets $300,000
Estimated outflows expenditures$1,200,000
Transfer to other funds $ 370,000
Record the above events in a general journal

Question 23

All investments except for money market investments and participating interest earning investments contracts with a remaining maturity date of one year or less should be reported at:

A)​Book Value
B)​Fair value
C)​Market value
D)​Fund value

Question 24

Unlike For Profit organizations, the first step in the closing process is generally to close revenue.What should be the first step in closing for an entity that uses Fund accounting?

A)​Close revenue
B)​Close expense
C)​Close budgetary entries
D)​Close Fund Balances

Question 25

Corrections of previous years errors are made directly through which account:

A)​Deferred Asset
B)​Deferred Liability
C)​Fund Balance- Unassigned
D)​General Liability

Question 26

Which of the following accounts is a budgetary account?

A)​Property tax receivable
B)​Property tax payable
C)​Appropriations
D)​Vouchers payable

Question 27

What type of instrument can be helpful toll for governmental entities hedging the interest rate risk associated with their bond issue?

A)​Money markets
B)Derivatives​
C)​Commercial paper
D)​Pooled funds

Question 28

Assume the facts for Central City Government.
?
$$\begin{array} { | l | l | } \hline \begin{array} { l } \text { Central City approves vouchers for general } \\\text { expense }\end{array} & \$ 450,000 \\\hline & \\\hline \text { Central City approves purchase of equipment } & \$ 455,000 \\\hline \begin{array} { l } \text { Purchase of supplies assuming a perpetual } \\\text { inventory system is used }\end{array} & \$ 350,000 \\\hline \text { Of this amount } \$ 1,200,000 \text { is encumbered } & \\\hline\end{array}$$ ?
Instructions:
Record the above transactions in a general journal
?

Question 29

A difference in reporting on the balance sheet for a for profit business and a Not for profit entity is that current assets and current liabilities are reported in the for profit sector and the parallel accounts in not for profit are found in:

A)​Deferred accounts
B)​Fund accounts
C)​Donations
D)​Net assets

Question 30

At the time property tax is levied on property owners the tax would be recorded as a:

A)​Liability
B)​Cash
C)​Receivable
D)​Fund Transfer

Question 31

Assume General City has the following information available:
​
General City Comptroller goes to the bank and asks for a $2,500,000 not to finance a government operation in advance of collecting the first property tax installment
Collection of taxes and related interest for the previous year is as follows:
Current taxes…………………………….$1,500,000
Delinquent taxes……………………….$300,000
Interest on delinquent taxes………..$10,000
Tax liens………………………………………….$35,000
Interest on tax liens…………………………$3,000
Instructions: record the above transaction in a general journal​
​

Question 32

Assume the following transactions for a government agency are independent of each other.How would the following journal entries be recorded?
?
A $75,000 lease at its inception is recorded at the present value of its lease payments
A $100,000 leased asset is recorded at its present value
A $150,000 lease is recorded as a long term lease obligation.

Question 33

An encumbrance most likely would be reported as:

A)​Asset
B)​Deferred Asset
C)​Liability
D)​Expected Expense

Question 34

Revenue from fines and licenses are recorded as ______? Since they cannot be predicted:

A)​Cash
B)​Receivables
C)​Deferred Assets
D)​Deferred revenue

Question 35

Which of the following accounts would be considered an operating account for a governmental entity?

A)​Fund balance
B)​Property Tax Receivable
C)​Other Financing Source
D)​Estimated Revenue

Question 36

Record the following journal entries:
?
Encumbrance of $1,000,000 ARE MADE
Vouchers are approved liquidating $900,000 of encumbrances as follows:
Supplies……………..$305,000
Building……………….$575,000
Other Expense……$35,000

Question 37

Fixed assets of proprietary funds are referred to as fund capital assets.All other fixed assets are considered general capital and can be found in the:

A)​Fixed asset account group
B)​Restricted assets account group
C)​Unrestricted assets account group
D)​Temporarily Restricted assets account group

Question 38

Debt financing incurred to acquire capital assets or other long-term economic benefits through governmental funds is termed

A)​general long-term capital debt.
B)​general short term capital debt
C)​General long term restricted cash
D)​general long term asset

Question 39

The general ledger includes three types of accounts.They are; permanent, operating and:

A)​Temporary
B)​Budget
C)​Fixed
D)​Nominal

Question 40

What type of entries would close the budgetary and actual accounts?

A)​Budgetary
B)​Operating
C)​Nominal
D)​Closing

Question 41

Assuming normal balances in the following accounts prepare closing entries for the fiscal year ending March 31.
?
?
$$\begin{array} { | l | l | } \hline \text { Account } & \text { Normal Balance } \\\hline & \\\hline \text { Appropriations } & \$ 500,000 \\\hline \text { Budgetary Fund Balance Unassigned } & \$ 35,000 \\\hline \text { Estimated Other Financing Uses } & \$ 10,000 \\\hline \text { Estimated Other Financing Source } & \$ 325,000 \\\hline \text { Estimated Revenue } & \$ 150,000 \\\hline & \\\hline\end{array}$$

Question 42

Describe the three types of general ledger accounts and types of journal entries found in a government entity.​

Question 43

Describe the authorities for commercial, governmental, and Not for Profit entities.

Question 44

Identify the three fund types used in government accounting and their relevance: