Question 1

Is the year-end balance in the Reserve for En-cumbrances account a liability? Explain.

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Question 2

What characteristics distinguish nonbusiness organizations from profit-oriented enterprises?

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Question 3

Why may it be difficult or impossible for a governmental unit to determine the total cost of performing a particular activity or function?
Business Ethics Question from the Textbook
At State College, where football has long reigned asking and fans are near fanatical in their attendance, the frenzy for football tickets has recently reached an all-time high.With requests for home game tickets at an unprecedented level, prices on everything from parking passes to hotel rooms to home rentals have soared beyond belief.Parking passes were going for $500 on eBay, and hotel rates have doubled-and in some cases nearly tripled-reaching as high as $650 per night at some hotels.

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Question 4

Distinguish between an appropriation, an en-cumbrance encumbrance, an expenditure, and a disbursement.

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Question 5

What is the significance of the "unreserved fund balance" of an expendable fund entity?

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Question 6

Explain the purposes of encumbrance accounting.Might encumbrance accounting be used by commercial enterprises?

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Question 7

Explain and justify the difference between the treatment of estimated uncollectible taxes in fund accounting and the treatment of estimated bad debts in commercial accounting.

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Question 8

What are the revenue-recognition criteria for expendable fund entities? How do these criteria differ from revenue-recognition criteria for profit-oriented enterprises?

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Question 9

What columns would you suggest for a subsidiary ledger account in order that it might be a subsidiary not only to the "appropriations" control account but also the "encumbrances" and the "expenditures" control accounts?

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Question 10

What are the major classifications of increases and decreases in expendable fund resources?

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Question 11

Define a fund as the term is applied in accounting for the activities of governmental units and other nonbusiness organizations.

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Question 12

How does the adoption of a budget for a general fund entity differ from the adoption of a budget by a commercial unit?

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Question 13

Describe the principal financial statements used to report on the activities and status of expendable fund entities.

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Question 14

Why is depreciation on fixed assets not recorded in the records of expendable fund entities?

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Question 15

Distinguish between an expense and an expenditure.

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Question 16

Expenditures may be classified by function, activity, object, or organizational unit.Give an ex-ample of each classification for a municipality.Which classification is the most appropriate for
external financial reporting?

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Quiz 17: Introduction to Fund Accounting