Question 1

How is the Statement of Cash Flows for Proprietary Funds similar and dissimilar to a Statement of Cash Flows for a for-profit business?

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Question 2

What is meant by the term legally independent?

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Question 3

What information is required in the financial section of a state or local government's CAFR?

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Question 4

What is meant by the term fiscally independent?

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Question 5

The City of Wade has a fiscal year ending June 30. Examine the following transactions for Wade:(A.)On 6/5/21, Wade opens a new landfill. The engineers estimate that at the end of 12 years the landfill will be full. Estimated costs to close the landfill are currently $4,800,000.(B.)On 6/18/21, Wade receives a donation of a vintage railroad steam engine. The engine will be put on display at the local town park. A fee will be charged to actually climb up into the engine. The engine has been valued at $650,000.(C.)On 6/30/21, Wade estimates that the landfill is 2% filled.Determine and prepare the journal entries for the City of Wade for each lettered item for the purposes of preparing the government-wide financial statements.

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Question 6

What information is required in the introductory section of a state or local government's CAFR?

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Question 7

Over the years, four alternatives have been suggested for constructing the financial statements for public colleges and universities. These alternatives include all of the following except:

Accepted Answer

The other alternatives have already been suggested and considered, but adopting the requirements issued by the Private Company Council (PCC) of the FASB is a newer option that could provide more flexibility for public colleges and universities in reporting their financial statements. This choice could potentially allow these institutions to focus on the information that is most relevant to their stakeholders and avoid unnecessary complexities.

Question 8

A city starts a solid waste landfill during 2020. When the landfill was opened the city estimated that it would fill to capacity within 6 years and that the cost to cover the facility would be $1.8 million which will not be paid until the facility is closed. At the end of 2020, the facility was 15% full, and at the end of 2021 the facility was 35% full.If the landfill is judged to be a governmental fund, what liability is reported on the fund financial statements at the end of 2021?

Accepted Answer

Under the governmental fund accounting model, long-term liabilities are not reported on the fund financial statements. Instead, such liabilities are only reported on the government-wide financial statements. Since the cost to cover the facility is a future expense and the landfill is a governmental fund, no liability is reported at the end of 2021 on the fund financial statements.

Question 9

Which information must be disclosed regarding tax abatement agreements?i)The purpose of the tax abatement program.ii)The dollar amount of abatement and the names of recipients.iii)The type of tax being abated.

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Question 10

The Town of Harvest opened a solid waste landfill in 1998 that is filled to capacity in the current year. The city initially anticipated closure costs of $3 million. These costs were not expected to be incurred until the landfill was closed. What is the final journal entry to record these costs assuming the estimated $3 million closure costs were properly recorded and the landfill is accounted for in an enterprise fund?

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Question 11

The city operates a public swimming pool where each person is assessed a $2 entrance fee. Which financial statement is most appropriate to report these revenues?

Accepted Answer

The correct choice is E) Statement of Revenue, Expenses, and Other Changes in Net Position. This statement is appropriate for reporting revenues from activities like a public swimming pool because it reflects the operational results, including revenues and expenses, and how they affect the net position of the entity, which is relevant for governmental and similar entities that operate such facilities.

Question 12

Under GASB Statement No. 87, Leases, which of the following is false?

Accepted Answer

The statement does not provide separate categories for all lease contracts for the lessor. Instead, the lessor is required to classify its leases as either sales-type leases, direct financing leases, or operating leases.

Question 13

A city starts a solid waste landfill during 2020. When the landfill was opened the city estimated that it would fill to capacity within 6 years and that the cost to cover the facility would be $1.8 million which will not be paid until the facility is closed. At the end of 2020, the facility was 15% full, and at the end of 2021 the facility was 35% full.On government-wide financial statements, which of the following are the appropriate amounts to present in the financial statements for 2021?

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Question 14

The parking garage and parking lots owned by the City of Barnard reported the following balances for 2021:
  Required:Prepare the appropriate financial statement for the fund that was used to account for parking operations.

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Question 15

Which statement is false regarding the Statement of Revenues, Expenditures, and Other Changes in Fund Balance when it is included with government-wide financial statements?

Accepted Answer

The Statement of Revenues, Expenditures, and Changes in Fund Balance does not present revenues as either program revenues or general revenues; this distinction is typically made in the government-wide Statement of Activities, not in the fund-based financial statements.

Question 16

Which of the following is false regarding defined benefit pension plans provided to employees by a state or local government?

Accepted Answer

Defined benefit pension plans are not fully funded by the employees of a state or local government. The employer also contributes funds to the plan.

Question 17

What three criteria must be met before a governmental unit can elect to not capitalize and therefore not report a work of art or historical treasure as an asset?

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Question 18

What are the four steps established by GASB Statement No. 68, Accounting for Financial Reporting for Pensions, in the reporting of a government's liability?

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Question 19

The City of Wade has a fiscal year ending June 30. Examine the following transactions for Wade:(A.)On 6/5/21, Wade opens a new landfill. The engineers estimate that at the end of 12 years the landfill will be full. Estimated costs to close the landfill are currently $4,800,000.(B.)On 6/18/21, Wade receives a donation of a vintage railroad steam engine. The engine will be put on display at the local town park. A fee will be charged to actually climb up into the engine. The engine has been valued at $650,000.(C.)On 6/30/21, Wade estimates that the landfill is 2% filled.Determine and prepare the general fund journal entries for the City of Wade for each lettered item for the purposes of preparing the fund financial statements.

Accepted Answer