Question 1

As was true for governmental funds, major enterprise funds are to be presented, along with columns for nonmajor funds and total enterprise funds, where appropriate.

Accepted Answer

Major enterprise funds are to be presented, along with columns for nonmajor funds and total enterprise funds the same as governmental funds.

Question 2

Internal service funds account for

Accepted Answer

Internal service funds provide services to other government departments and charge those departments for the services rendered.

Question 3

According to GASB, restricted Net Position does not include net resources under constraints imposed by creditors, grantors, contributors, or laws or regulations of other governments.

Accepted Answer

Restricted Net Position is defined as net resources whose use it is restricted by external parties creditors, grantors, or other governments) or by internally imposed laws.

Question 4

Proprietary funds use the current financial resources measurement focus and modified accrual basis of accounting.

Accepted Answer

Proprietary funds use the accrual basis of accounting and the economic resources measurement focus.

Question 5

With respect to proprietary funds, the net position i.e., fund equity) section of the Statement of Net Position is displayed within two categories: Restricted and Unrestricted Net Position.

Accepted Answer

The categories of Net Position for a proprietary fund are Net Investment in Capital Assets, Restricted Net Position and Unrestricted Net Position.

Question 6

Proprietary funds use the current financial resources measurement focus and modified accrual basis of accounting.

Accepted Answer

Proprietary funds use the accrual basis of accounting and the economic resources measurement focus.

Question 7

An example of an activity that would not normally be accounted for in an internal service fund would be:

Accepted Answer

Internal service funds provide services to other government departments and charge those departments for the services rendered. Garbage collection would be services provided to outside consumers and would be accounted for in an enterprise fund.

Question 8

If the accounting treatment for a given transaction is not specified by a GASB pronouncement, a government may use nonauthoritative sources for guidance, including FASB standards dealing with similar events.

Accepted Answer

If the accounting treatment for a given transaction is not specified by a GASB pronouncement, a government may use nonauthoritative sources for guidance, including FASB standards dealing with similar events.

Question 9

The reconciliation on the statement of cash flows for a proprietary fund under GASB requirements is between operating income and cash flows from operating activities.

Accepted Answer

The reconciliation starts with operating income and ends with Cash provided by Operating Activities.

Question 10

Long term debt serviced from proprietary funds is recorded in the Long Term Debt Account Group.

Accepted Answer

Long term debt serviced from proprietary funds is recorded in the enterprise or fiduciary fund that will be servicing the debt.

Question 11

Proprietary funds report using the economic resources measurement focus and the accrual basis of accounting.

Accepted Answer

Proprietary funds use the accrual basis of accounting and the economic resources measurement focus.

Question 12

GASB Cash Flow Statements require the following classification of cash flows: Operating, Investing, and Financing.

Accepted Answer

GASB requires four categories on the Statement of Cash Flow; Cash flows from operating activities, cash flows from noncapital financing activities, cash flows from capital and related financing activities and cash flows from investing activities.

Question 13

Unlike internal service funds, it is frequently desirable for enterprise funds to operate at a profit.

Accepted Answer

It is frequently desirable for enterprise funds to operate at a profit to provide capital for things like working capital, expansion of physical facilities and retire debt. Governments may find it desirable to use enterprise fund profits to support general government expenditures that would otherwise require increased taxes. Internal service funds account for activities that produce goods or services to be provided to other governmental units on a cost reimbursement basis.

Question 14

Centralized purchasing, computer services, and janitorial services are examples of activities that are commonly reported in:

Accepted Answer

Internal service funds provide services to other government departments and charge those departments for the services received. Examples would be purchasing services, printing services, repair garages, janitorial services and risk management activities.

Question 15

The required financial statements of proprietary funds include a Statement of Net Position, a Statement of Revenues, Expenses, and Changes in Fund Net Position. The Statement of Cash Flows is recommended, but not required.

Accepted Answer

The required statements for proprietary funds include the Statement of Net Position, Statement of Revenues, Expenses, and Changes in Fund Net Position, and the Statement of Cash Flows.

Question 16

Long term debt serviced from proprietary funds is reported only in the government-wide Statement of Net Position.

Accepted Answer

Long term debt serviced from proprietary funds is recorded in the enterprise or fiduciary fund that will be servicing the debt.

Question 17

According to GASB, restricted Net Position include those that are the results of constraints imposed by law through constitutional provisions or enabling legislation.

Accepted Answer

Restricted Net Position is defined as net resources whose use it is restricted by external parties creditors, grantors, or other governments) or by internally imposed laws.

Question 18

Major enterprise funds are to be presented in the aggregate with all funds combined.

Accepted Answer

Major enterprise funds are to be presented, along with columns for nonmajor funds and total enterprise funds.

Question 19

Proprietary funds must prepare the Statement of Cash Flows using the direct method and includes cash flows from operating activities, investing activities, capital and related financing activities, and noncapital-related financing activities.

Accepted Answer

GASB requires the direct method to report cash flows from operating activities for proprietary funds. The four categories required by GASB are: cash flows from operating activities, cash flows from noncapital financing activities, cash flows from capital and related financing activities and cash flows from investing activities.

Question 20

Which of the following statements is true regarding proprietary funds?

Accepted Answer

Proprietary funds use the accrual basis of accounting and record revenues and expenses similar to business organizations.

Quiz 6: Proprietary Funds

As was true for governmental funds, major enterprise funds are to be presented, along with columns for nonmajor funds and total enterprise funds, where appropriate.

Internal service funds account for

According to GASB, restricted Net Position does not include net resources under constraints imposed by creditors, grantors, contributors, or laws or regulations of other governments.

Proprietary funds use the current financial resources measurement focus and modified accrual basis of accounting.

With respect to proprietary funds, the net position i.e., fund equity) section of the Statement of Net Position is displayed within two categories: Restricted and Unrestricted Net Position.

Proprietary funds use the current financial resources measurement focus and modified accrual basis of accounting.

An example of an activity that would not normally be accounted for in an internal service fund would be:

If the accounting treatment for a given transaction is not specified by a GASB pronouncement, a government may use nonauthoritative sources for guidance, including FASB standards dealing with similar events.

The reconciliation on the statement of cash flows for a proprietary fund under GASB requirements is between operating income and cash flows from operating activities.

Long term debt serviced from proprietary funds is recorded in the Long Term Debt Account Group.

Proprietary funds report using the economic resources measurement focus and the accrual basis of accounting.

GASB Cash Flow Statements require the following classification of cash flows: Operating, Investing, and Financing.

Unlike internal service funds, it is frequently desirable for enterprise funds to operate at a profit.

Centralized purchasing, computer services, and janitorial services are examples of activities that are commonly reported in:

The required financial statements of proprietary funds include a Statement of Net Position, a Statement of Revenues, Expenses, and Changes in Fund Net Position. The Statement of Cash Flows is recommended, but not required.

Long term debt serviced from proprietary funds is reported only in the government-wide Statement of Net Position.

According to GASB, restricted Net Position include those that are the results of constraints imposed by law through constitutional provisions or enabling legislation.

Major enterprise funds are to be presented in the aggregate with all funds combined.

Proprietary funds must prepare the Statement of Cash Flows using the direct method and includes cash flows from operating activities, investing activities, capital and related financing activities, and noncapital-related financing activities.

Which of the following statements is true regarding proprietary funds?