30 May ACC 497 Week 5 Knowledge Check NEW
1.
Which of the following factors would not indicate that a potential component unit (PCU) imposes a financial burden or provides a financial benefit to the primary government?
The primary government is obligated to provide financial support to the PCU.
The primary government is obligated for the PCU’s debt.
The primary government is entitled to its share of any dividends distributed by the PCU.
The primary government is entitled to the PCU’s resources.
2.
Select the type of the fund from the list that best matches with the following descriptive phrases.
3.
The GASB concept statements indicate that in certain instances a remeasured value for an asset or liability should be reported on the financial statements. Which of the following is not one of the methods recommended by the GASB for remeasured amounts?
Historical cost.
Fair value.
Replacement cost.
Lower of cost or market.
4.
A city received resources that the state indicates can only be used for public works projects, such as road construction. Assuming the resources have not been expended by year end, how would the resources the city received be shown in the city’s fund balances?
Spendable-Assigned Fund Balance.
Spendable-Committed Fund Balance.
Spendable-Restricted Fund Balance.
Spendable-Designated Fund Balance.
6.
Some governments provide to their citizens highly condensed financial information, budget summaries, and narrative descriptions. This report is called a(an)
Popular report.
Basic financial statements.
Required supplementary information.
Comprehensive annual financial report.
7.
Following is the governmental activities pre-closing trial balance for the Town of Freaz. Freaz is a relatively small town and, as a result, it has only governmental funds (i. e., it uses no proprietary funds). There are no component units. To complete the financial statements for its annual report, the town must prepare a government-wide statement of net position and a statement of activities.
The restricted net position for debt service increased $93 for FY 2017. The net position accounts do not reflect FY 2017 depreciation of $1,180 that was allocated to the functions of government, or the town’s decision to designate $930 for street repair. (All 000s omitted.)
Required
Using the trial balance provided by the town, prepare a government-wide statement of net position.
8.
Which of the following funds should be used if resources provided by a federal grant must be segregated and used for counseling of youthful offenders?
Enterprise fund.
Special revenue fund.
Internal service fund.
Private-purpose trust fund.
9.
The City of Lynnwood was recently incorporated and had the following transactions for the fiscal year ended December 31, 2017.
1. The city council adopted a General Fund budget for the fiscal year. Revenues were estimated at $2,120,000 and appropriations were $2,002,000.
2. Property taxes in the amount of $2,060,000 were levied. It is estimated that $15,000 of the taxes levied will be uncollectible.
3. A General Fund transfer of $31,000 in cash and $312,000 in equipment (with accumulated depreciation of $77,000) was made to establish a central duplicating internal service fund.
4. A citizen of Lynnwood donated marketable securities with a fair value of $920,000. The donated resources are to be maintained in perpetuity with the city using the revenue generated by the donation to finance an after school program for children, which is sponsored by the culture and recreation function. Revenue earned and received as of December 31, 2017, was $52,000.
5. The city’s utility fund billed the city’s General Fund $137,000 for water and sewage services. As of December 31, the General Fund had paid $136,000 of the amount billed.
6. The central duplicating fund purchased $10,500 in supplies.
7. Cash collections recorded by the general government function during the year were as follows:
Property taxes $ 1,937,000
Licenses and permits 47,000
User charges 34,000
________________________________________
8. During the year the internal service fund billed the city’s general government function $21,700 for duplicating services and it billed the city’s utility fund $14,100 for services.
9. The city council decided to build a city hall at an estimated cost of $5,120,000. To finance the construction, 6 percent bonds were sold at the face value of $5,120,000. A contract for $4,620,000 has been signed for the project; however no expenditures have been incurred as of December 31, 2017.
10. The general government function issued a purchase order for $38,000 for computer equipment. When the equipment was received, a voucher for $33,100 was approved for payment and payment was made.
a. For each transaction number identify all of the fund and/or government-wide activity journals in which journal entries must be made.
General Fund GF
Capital projects fund CPF
Internal service fund ISF
Permanent fund PF
After School Fund (a special revenue fund) SRF
Enterprise fund EF
Governmental activities GA
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