29 Jun Question 1. Governmental funds are identi
Question
1. Governmental funds are identical to governmental activities, proprietary funds are identical to business-type activities, and fiduciary funds are identical to fiduciary activities of a government.
True False
2. An objective of the accounting system for a state or a local government is to make it possible both to present fairly the funds and activities of the government in conformity with generally accepted accounting principles and to demonstrate compliance with finance-related legal and contractual provisions.
True False
3. Individual fund financial information is reported in separate columns of governmental and proprietary fund financial statements for only those funds that meet the GASB size-related criteria as major funds.
True False
4. Economic resources are cash or items expected to be converted into cash during the current period, or soon enough thereafter to pay current period liabilities.
True False
5. A fund is an accounting but not a fiscal entity.
True False
6. The types of funds that may be used in governmental accounting are classified into the three categories of governmental, proprietary, and fiduciary.
True False
7. The governmental funds category includes the General Fund, special revenue funds, debt service funds, capital projects funds, and internal service funds.
True False
8. Governments can, in part, demonstrate operational accountability by reporting proprietary and fiduciary fund financial information, as well as all government-wide financial information, using an economic resources measurement focus and the accrual basis of accounting.
True False
9. All capital assets acquired by or used by a fund should be reported in the fund balance sheet or statement of net assets.
True False
10. Because budgetary accounts are used by governments, their financial statements can never be said to be in accord with generally accepted accounting principles.
True False
Multiple Choice Questions
11. The accounting system used by a state or local government must make it possible
A. To present fairly the financial position and results of financial operations of the government as a whole, as well as fund financial activity in conformity with GAAP, and to demonstrate compliance with finance-related legal and contractual provisions.
B. To prepare financial statements as required by the Financial Accounting Standards Board.
C. To prepare consolidated accrual basis statements for the government as a whole.
D. To provide Web-based bond offering statements to investment firms.
12. Which of the following is not a characteristic of a fund as defined by GASB standards?
A. An accounting entity.
B. A fiscal entity.
C. A segregated quantity of cash and other financial resources on deposit with a designated trustee.
D. A self-balancing set of accounts.
13. In accounting for state and local governments the modified accrual basis is required for
A. Proprietary and fiduciary funds.
B. Governmental funds only.
C. Proprietary funds only.
D. All funds.
14. Under the modified accrual basis of accounting, revenues should be recognized when
A. Earned.
B. Collected in cash.
C. Authorized by the budget ordinance.
D. Measurable and available.
15. The accrual basis of accounting applicable to proprietary fund types requires that exchange revenues be recognized when
A. Earned.
B. Collected in cash.
C. Authorized by the budget ordinance.
D. Measurable and available.
16. Which of the following funds is a governmental fund-type?
A. Private-purpose trust fund.
B. Internal service fund.
C. Permanent fund.
D. Enterprise fund.
17. Financial resources set aside to pay principal and interest on general long-term debt may be accounted for in which of the following fund types?
A. Private-purpose trust fund.
B. Debt service fund.
C. Principal and interest trust fund.
D. Internal service fund.
18. According to GASB standards transfers should be recognized
A. When earned.
B. When collected in cash.
C. When authorized by the budget ordinance.
D. In the period the interfund receivable and payable arise.
19. Generally accepted accounting principles applicable to state and local governments require that
A. Only governmental funds and proprietary funds should be provided.
B. Only those funds required by law, GASB standards, and sound financial administration should be provided.
C. Only those funds required by law should be provided.
D. All categories of funds must be provided.
20. Which of the following is a proprietary fund?
A. Special revenue fund.
B. Investment trust fund.
C. Debt service fund.
D. Internal service fund.
21. Which of the following is a fiduciary fund?
A. Investment trust fund.
B. Special revenue fund.
C. Debt service fund.
D. Enterprise fund.
22. Which of the following funds would be most appropriate for accounting for an activity that provides goods or services to the public for a fee that is intended to make the activity self-supporting?
A. Investment trust fund.
B. Enterprise fund.
C. Internal service fund.
D. Special revenue fund.
23. 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?
A. Private-purpose trust fund.
B. Enterprise fund.
C. Internal service fund.
D. Special revenue fund.
24. Which of the following funds would be used to account for an activity that provides centralized purchasing and sales of goods or services to other departments or agencies of the governmental, or to other governments, on a cost-reimbursement basis?
A. Enterprise fund.
B. Fiduciary fund.
C. Internal service fund.
D. Permanent fund.
25. Budgetary comparison schedules presenting budgeted versus actual revenues and expenditures are
A. Optional under GASB standards for all funds.
B. Required by GAAP for internal management reports only; not permitted for external financial reporting.
C. Required by GAAP for the General Fund and major special revenue funds for which an annual budget has been legally adopted.
D. Required by GAAP for all governmental fund types.
26. In which of the following funds would it not be appropriate to record depreciation of capital assets?
A. Special revenue fund.
B. Enterprise.
C. Internal service.
D. Pension trust.
27. Capital assets used by departments accounted for by the General Fund of a governmental unit should be accounted for in
A. The General Fund.
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