Question 1

What is meant by the term fiscally independent?

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Question 2

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

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Question 3

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:
A) Adopt FASB's requirements so that all colleges and universities (public and private) prepare comparable financial statements.
B) Apply a more traditional model focusing on fund financial statements and the wide variety of funds that such schools often have to maintain.
C) Create an entirely new set of financial statements designed specifically to meet the unique needs of public colleges and universities.
D) Adopt the requirements issued by the Private Company Council (PCC) of the FASB.
E) Adopt the same reporting model for public schools that has been created for state and local governments.

Accepted Answer

The three alternatives mentioned in the question (A, B, and C) have all been suggested and debated over the years, but the current trend is towards adopting the requirements issued by the Private Company Council (PCC) of the FASB. These requirements would provide a more flexible reporting model that takes into account the unique needs of public colleges and universities, while still maintaining consistency and comparability with other types of organizations. Therefore, option D is the best choice. Option E is not mentioned in the question and therefore cannot be considered.

Question 4

What are the three broad sections of a state or local government's CAFR?

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Question 5

What is meant by the term legally independent?

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Question 6

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?
A) The Statement of Revenues, Expenditures, and Other Changes in Fund Balance uses the modified accrual method of accounting.
B) The Statement of Revenues, Expenditures, and Changes in Fund Balance presents revenues as either program revenues or general revenues.
C) A presentation reconciles the change in governmental fund balance to the change in net position for governmental activities.
D) Other financing sources are presented on the Statement of Revenues, Expenditures, and Other Changes in Fund Balance.
E) All non-major funds are combined and reported together.

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Question 7

A city starts a solid waste landfill during 2017. When the landfill was opened the city estimated that it would fill to capacity within 5 years and that the cost to cover the facility would be $1.5 million which will not be paid until the facility is closed. At the end of 2017, the facility was 20% full, and at the end of 2018 the facility was 45% full.
-On government-wide financial statements, which of the following are the appropriate amounts to present in the financial statements for 2018?
A) Both expense and liability will be zero.
B) Expense will be $300,000 and liability will be $600,000.
C) Expense will be $600,000 and liability will be $600,000.
D) Expense will be $675,000 and liability will be $600,000.
E) Expense will be $375,000 and liability will be $675,000.

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Question 8

The Town of Conway opened a solid waste landfill in 1995 that is filled to capacity in the current year.The city initially anticipated closure costs of $2 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 $2 million closure costs were properly recorded and the landfill is accounted for in an enterprise fund?

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Question 9

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

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Question 10

The City of Wetteville has a fiscal year ending June 30. Examine the following transactions for Wetteville:
(A.) On 6/5/18, Wetteville opens a new landfill. The engineers estimate that at the end of 10 years the landfill will be full. Estimated costs to close the landfill are currently $3,500,000.
(B.) On 6/18/18, Wetteville 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 $500,000.
(C.) On 6/30/18, Wetteville estimates that the landfill is 2% filled.
-Determine and prepare the journal entries for the City of Wetteville, in the general fund, on the dates mentioned for each lettered item, for the purposes of preparing the fund financial statements.

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Question 11

A city starts a solid waste landfill during 2017. When the landfill was opened the city estimated that it would fill to capacity within 5 years and that the cost to cover the facility would be $1.5 million which will not be paid until the facility is closed. At the end of 2017, the facility was 20% full, and at the end of 2018 the facility was 45% full.
-If the landfill is judged to be a governmental fund, what liability is reported on the fund financial statements at the end of 2018?
A) $ 0.
B) $300,000.
C) $375,000.
D) $600,000.
E) $675,000.

Accepted Answer

The answer of A city starts a solid waste landfill...

Question 12

The City of Wetteville has a fiscal year ending June 30. Examine the following transactions for Wetteville:
(A.) On 6/5/18, Wetteville opens a new landfill. The engineers estimate that at the end of 10 years the landfill will be full. Estimated costs to close the landfill are currently $3,500,000.
(B.) On 6/18/18, Wetteville 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 $500,000.
(C.) On 6/30/18, Wetteville estimates that the landfill is 2% filled.
-Determine and prepare the journal entries for the City of Wetteville, on the dates mentioned for each lettered item, for the purposes of preparing the government-wide financial statements.

Accepted Answer

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Question 13

What three criteria must be met to identify a governmental unit as a primary government?

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Question 14

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 15

The parking garage and parking lots owned by the City of Danton reported the following balances for 2018:
  Required:
Prepare the appropriate financial statement for the fund that was used to account for parking operations.

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Question 16

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?
A) Statement of Net Position.
B) Statement of Revenue, Expenditures, and Other Changes in Fund Balance.
C) Statement of Revenue, Expenses, and Other Changes in Fund Balance.
D) Statement of Net Revenue and Expenses.
E) Statement of Revenue, Expenses, and Other Changes in Net Position.

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Question 17

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.
A) i and iii.
B) i only.
C) ii only.
D) iii only.
E) i, ii, and iii.

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Question 18

The City of Nextville operates a motor pool serving all city-owned vehicles.The motor pool bought a new garage by paying $29,000 in cash and signing a note with the local bank for $280,000.Subsequently, the motor pool performed work for the police department at a cost of $17,000, which had not yet been collected.Depreciation on the garage amounted to $20,000.The first $12,000 payment made on the note included $4,800 in interest.
Required:
Prepare the journal entries for these transactions that are necessary to prepare government-wide financial statements.

Accepted Answer

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Question 19

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

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Question 20

Which statement is false regarding the Balance Sheet for Governmental Fund Financial Statements?
A) The Balance Sheet for Governmental Fund Financial Statements measures only current financial resources of the governmental entity.
B) The Balance Sheet for Governmental Fund Financial Statements uses the modified accrual method for timing purposes.
C) Capital Assets are not reported on the Balance Sheet for Governmental Fund Financial Statements.
D) The Balance Sheet for Governmental Fund Financial Statements measures only long-term financial resources of the governmental entity.
E) Long-term debts are not reported on the Balance Sheet for Governmental Fund Financial Statements.

Accepted Answer

The statement "The Balance Sheet for Governmental Fund Financial Statements measures only long-term financial resources of the governmental entity" is false. The Balance Sheet for Governmental Fund Financial Statements measures only current financial resources of the governmental entity under the modified accrual method. Therefore, choice D is the best answer. Choices A, B, C, and E are true statements regarding the Balance Sheet for Governmental Fund Financial Statements.

Quiz 17: A: Accounting for State and Local Governments, Part II

What is meant by the term fiscally independent?

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

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:

What are the three broad sections of a state or local government's CAFR?

What is meant by the term legally independent?

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?

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

What three criteria must be met to identify a governmental unit as a primary government?

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

The parking garage and parking lots owned by the City of Danton reported the following balances for 2018: Required: Prepare the appropriate financial statement for the fund that was used to account for parking operations.

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?

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.

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

Which statement is false regarding the Balance Sheet for Governmental Fund Financial Statements?