Question 1

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.

Accepted Answer

The Expenditures control account is debited when supplies previously encumbered are received. Encumbrances are created when a government sets aside funds for a particular purpose, such as purchasing supplies, but has not yet received the goods or services. The Expenditures control account is debited to recognize the actual expenditures incurred when the supplies are received and the encumbrance is lifted. Choice A is incorrect because recording the supplies budget would not directly impact the Expenditures control account. Choice B is incorrect because ordering supplies creates an encumbrance, but it does not result in an actual expenditure, so it would not be recorded in the Expenditures control account. Choice D is incorrect because paying the invoice for supplies would result in a credit to accounts payable and a debit to cash, but it would not directly impact the Expenditures control account.

Question 2

Under which basis of accounting for a government should revenues be recognized in the period when they are measurable and available?            
A-          
B-              &
C-            
D-          
A) Choice A.
B) Choice B.
C) Choice C.
D) Choice D.

Accepted Answer

The answer of Under which basis of accounting for a...

Question 3

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.

Accepted Answer

Other financing sources arise from sources such as debt issuances or interfund transfers in, which increase the financial resources available to the recipient fund but do not represent revenues earned by the fund. Options B and D are incorrect because they do not represent the distinguishing characteristic of other financing sources. Option C is partially true but does not fully describe the unique nature of other financing sources in comparison to revenues.

Question 4

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.

Accepted Answer

Interfund Transfers In are typically classified as Other Financing Source as it represents an inflow of resources into the General Fund from another fund. It is not considered revenue because it does not represent an increase in the fund's financial resources due to operating activities. It is also not considered a current liability because it does not represent an obligation to pay back funds received.

Question 5

The journal entry to record budgeted revenues will include:
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.

Accepted Answer

In governmental accounting, budgeted revenues are recorded by debiting Estimated Revenues to reflect the anticipated inflow of resources.

Question 6

The expenditure classification "Public Safety" is an example of which of the following types of classifications?
A) Activity.
B) Function.
C) Character.
D) Object.

Accepted Answer

The expenditure classification "Public Safety" represents a broad function and is therefore an example of a function classification. Activity classifications usually represent specific tasks, object classifications refer to the type of expenditure (e.g. capital, supplies), and character classifications are related to the legal or budgetary requirements for the expenditure (e.g. salaries, grants).

Question 7

The Estimated Revenues control account of a government is credited when:         
A-            
B-             
C-             
D-

A) Choice A.
B) Choice B.
C) Choice C.
D) Choice D.

Accepted Answer

The Estimated Revenues control account tracks the expected revenues for a government. It is credited when actual revenues exceed the estimated amount, indicating a surplus. Choice A indicates a credit to the Estimated Revenues control account. Choices B, C, and D do not provide enough information to determine whether the account should be credited or not.

Question 8

When the budget for the General Fund is recorded, the required journal entry will include:
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.

Accepted Answer

When recording the budget for the General Fund, the Budgetary Fund Balance is adjusted to reflect the difference between estimated revenues and appropriations, which can result in either a debit or credit.

Question 9

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.

Accepted Answer

When supplies are received at a price higher than estimated, the Encumbrance account is credited for the estimated price to remove the encumbrance, reflecting that the obligation has been partially fulfilled.

Question 10

The process by which a legal valuation is placed on taxable property is called:
A) An appropriation.
B) A property tax levy.
C) Property assessment.
D) Ad valorem determination.

Accepted Answer

Property assessment is the process of determining the value of property for taxation purposes. It involves evaluating the market value of a property, taking into account various factors such as location, size, and condition. This valuation is used to calculate property taxes.

Question 11

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.

Accepted Answer

When Estimated Revenues exceed Appropriations in a government's budget, there is a surplus. This surplus is credited to the Budgetary Fund Balance, which represents the government's available resources for future budgetary needs. Therefore, choice A is the correct answer as it reflects the proper accounting treatment for the surplus funds.

Question 12

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.

Accepted Answer

When equipment intended for use by the General Fund is received, it should be recorded as an expenditure. This is because, in governmental accounting, purchases of capital assets by the General Fund are typically expensed in the period acquired, rather than capitalized.

Question 13

The expenditure classification "City Attorney" is an example of which of the following types of classification?
A) Function.
B) Organization unit.
C) Character.
D) Program.

Accepted Answer

The expenditure classification "City Attorney" represents a specific organizational unit within the government, and therefore falls under the organizational unit classification. The function classification would be broader, such as "Legal Services," and the program classification would be even more specific, such as "Civil Litigation Program." The character classification refers to the type of expenditure, such as salaries or supplies, and is not applicable in this case.

Question 14

Which of the following is True regarding other financing sources and other financing uses?
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.

Accepted Answer

Other financing sources and other financing uses are typically significant items that are separate from revenues and expenditures in the statement of revenues, expenditures, and changes in fund balances. They represent inflows or outflows of resources that do not stem from operating activities. As such, they are reported separately from revenues and expenditures.

Question 15

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.

Accepted Answer

The answer of A statement of revenues, expenditures, and changes...

Question 16

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
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.

Accepted Answer

Under the modified accrual basis of accounting, financial resources are considered available if the revenue or other financing source is expected to be collected during the current fiscal period or soon enough after year-end to pay current period obligations. choice A and B are too restrictive, and choice C is not precise enough since it does not include the time after year-end.

Question 17

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.

Accepted Answer

The answer of Which of the following accounts of a...

Question 18

Which of the following depict the typical order of steps in the acquisition of goods and services by an activity accounted for by the General Fund?
A) Appropriation, disbursement, encumbrance, expenditure.
B) Appropriation, encumbrance, expenditure, disbursement.
C) Encumbrance, appropriation, expenditure, disbursement.
D) Encumbrance, expenditure, appropriation, disbursement.

Accepted Answer

The typical order of steps in the acquisition of goods and services by an activity accounted for by the General Fund is appropriation, encumbrance, expenditure, and disbursement. Appropriation is the authorization to spend money, encumbrance is the commitment of funds for a specific purpose, expenditure is the actual payment for goods or services received, and disbursement is the actual outflow of cash. Therefore, the correct order of steps is appropriation, encumbrance, expenditure, and disbursement, which is depicted in option B.

Question 19

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. Seminole County utilizes the budgetary accounts required by GASB standards. The journal entry to record budgeted appropriations will include:
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.

Accepted Answer

Appropriations are the legal authorization for spending, so the journal entry to record budgeted appropriations will include a credit to the Appropriations account for the authorized amount of $12,900,000. Option B is incorrect because encumbrances are recorded when a purchase order is issued to reserve funds for a specific purchase, not when the budget is adopted. Option C is incorrect because Estimated Expenditures is not a budgetary account required by GASB standards. Option D is incorrect because Budgetary Fund Balance is a control account and not affected by budgeted appropriations.

Question 20

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:
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.

Accepted Answer

The budgeted excess of estimated revenues over appropriations represents a surplus in the General Fund, which is a positive sign for the county. This surplus will be credited to the Budgetary Fund Balance account, which is a component of the Fund Balance. The Budgetary Fund Balance represents the unassigned portion of fund balance, and it is available for future appropriation by the county commission. Therefore, option (C) "A credit to Budgetary Fund Balance, $300,000" is the correct answer. Option (A) is incorrect because there is no account called Surplus Revenues. Option (B) is incorrect because there is no account called Estimated Excess Revenues. Option (D) is incorrect because a memorandum entry is not sufficient to record a budgeted surplus.

Quiz 3: Governmental Operating Statement Accounts; Budgetary Accounting

The Expenditures control account of a government is debited when:

Under which basis of accounting for a government should revenues be recognized in the period when they are measurable and available? A- B- C- D-

One characteristic that distinguishes other financing sources from revenues is that other financing sources:

The account "Interfund Transfers In" would be classified in a General Fund statement of revenues, expenditures, and changes in fund balance as a(an) :

The journal entry to record budgeted revenues will include:

The expenditure classification "Public Safety" is an example of which of the following types of classifications?

The Estimated Revenues control account of a government is credited when: A- B- C- D-

When the budget for the General Fund is recorded, the required journal entry will include:

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:

The process by which a legal valuation is placed on taxable property is called:

When the budget of a government is adopted and Estimated Revenues exceed Appropriations, the excess is:

When equipment that is to be used by the General Fund is received, how should it be recorded?

The expenditure classification "City Attorney" is an example of which of the following types of classification?

Which of the following is True regarding other financing sources and other financing uses?

A statement of revenues, expenditures, and changes in fund balances-budget and actual is:

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

Which of the following accounts of a government is credited when a purchase order is approved?

Which of the following depict the typical order of steps in the acquisition of goods and services by an activity accounted for by the General Fund?

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: