Question 1

The main difference between an agency fund and a trust fund is:

Accepted Answer

Agency funds typically do not have a balance at the end of the period because they are used to account for resources held by a government in a purely custodial capacity, meaning they are held temporarily and then passed on to the appropriate party.

Question 2

Capital improvement special assessments:

Accepted Answer

Capital improvement special assessments may include contributions from property owners, are accounted for through a capital projects fund, and may include debt accounted for in an agency fund if the government has no obligation for it. Therefore, all of the options (A, B, and C) are correct.

Question 3

At the inception of the City of Covedale's motor pool, $1,000,000 was transferred from the General Fund as beginning capital.The entry in the Internal Service Fund included a credit to:

Accepted Answer

The correct entry for the inception of the City of Covedale's motor pool with a transfer of $1,000,000 from the General Fund is a credit to "Interfund Transfer In." This reflects the transfer of resources from one fund within the government (General Fund) to another (Internal Service Fund), rather than recognizing it as revenue, capital, or directly increasing net assets.

Question 4

The best fund in which to account for the interest and dividends from an endowment to purchase library books would be a(n)

Accepted Answer

The answer of The best fund in which to account...

Question 5

Which of the following is not a classification of net assets of proprietary funds?

Accepted Answer

Assigned net assets are not a classification used for proprietary funds. Proprietary funds typically classify net assets as unrestricted, restricted, and invested in capital assets, net of related debt. "Assigned" is a term used in governmental fund balance reporting, not for proprietary funds.

Question 6

Interfund transactions include all of the following except for:​

Accepted Answer

Interfund operating transfers for services provided and used are recorded as revenues and expenditures/expenses, not as interfund transactions.

Question 7

In the Statement of Cash Flows for an Proprietary Fund, the receipt of an operating grant would be included in cash flows from:

Accepted Answer

The receipt of an operating grant would be categorized as a cash inflow from operating activities in the Statement of Cash Flows for an Proprietary Fund. Operating activities refer to the principal revenue-generating operations of the fund, and the receipt of a grant would likely relate to the ongoing operations of the fund.

Question 8

The entry in the General Fund to record the purchase of water for City Hall from the city's Water Utility Enterprise Fund would include a debit to:

Accepted Answer

The purchase of water would be recorded as an expenditure in the General Fund.

Question 9

If general obligation debt is refunded to lower the interest rate and the proceeds are irrevocably placed with an escrow agent or trustee to pay off the old debt as it comes due, the government must

Accepted Answer

The answer of If general obligation debt is refunded to...

Question 10

An enterprise fund should be used to account for

Accepted Answer

An enterprise fund should be used to account for both a city-run water utility serving the general public (option B) and any activity which the city plans to sell to external users for a fee either now or in the future (option C). This is because enterprise funds are designed to be self-supporting and are used for activities that are primarily financed through user charges. A free city-run swimming pool paid for with property tax (option A) does not fit this description and would not be appropriate for an enterprise fund.

Question 11

Which of the following is not a typical year-end statement for an Enterprise Fund?

Accepted Answer

All of these financial statements would be used at year end by an Enterprise Fund.

Question 12

Capital improvements which are financed by special assessment debt for which the government is obligated in some manner would be recorded in the General Fixed Assets Account Group as a(n)

Accepted Answer

Capital improvements financed by special assessment debt for which the government is obligated would be recorded as assets in the General Fixed Assets Account Group based on the portion owned by the government. Therefore, the correct answer is a debit to Assets for the portion owned by the government.

Question 13

A government may use agency funds to account for all but the following:

Accepted Answer

The answer of A government may use agency funds to...

Question 14

The entry in the General Fund to record the reimbursement from a capital projects fund for legal services paid by the General Fund on its behalf would include:

Accepted Answer

The answer of The entry in the General Fund to...

Question 15

A redemption of the final serial of general obligation bonds, including a deficiency covered by the general fund, would affect which funds and/or account groups?

Accepted Answer

Redemption of general obligation bonds would affect the General Fund as it is responsible for making the payments on the bonds. The Debt Service Fund would also be affected as its purpose is to account for the resources used to make the debt service payments. Lastly, the General Long-Term Debt Account Group would also be affected as it is responsible for tracking the city's long-term debt. The redemption would not affect the Capital Projects Fund or the Agency Fund.

Question 16

Internal Service funds:

Accepted Answer

Internal service funds must recover their costs, including depreciation, or be subsidized by the government. This means that they operate much like a business and are designed to provide goods and services to other departments within the organization.

Question 17

For the Statement of Cash Flows for an Proprietary Fund:

Accepted Answer

A reconciliation of net operating income to net cash flow from operating activities is required when the direct method is used for proprietary funds.

Question 18

When a landfill operation is accounted for in an Enterprise Fund:

Accepted Answer

When a landfill operation is accounted for in an Enterprise Fund, a portion of the estimate for closure cost and post-closure monitoring is recognized during each year the landfill is in operation. This method helps to spread the cost over the life of the landfill, rather than recognizing it all at once when the landfill is closed or opened. This also helps to ensure that funds are available when the closure and post-closure monitoring become necessary.

Question 19

The activities of a central motor pool that supplies and services vehicles for the use of municipal employees on official business should be accounted for in a(n)?

Accepted Answer

The activities of a central motor pool that supplies and services vehicles for the use of municipal employees on official business are considered to be internal service activities. These types of activities are accounted for in an Internal Service Fund, which is used to account for goods or services provided by one department or agency to other departments or agencies within the same government. Therefore, the correct answer is C) Internal Service Fund.

Question 20

If a county collects taxes on behalf of the city and school district, it would record the taxes in the

Accepted Answer

The correct answer is C) Agency Fund. This is because when a government collects taxes or other revenues on behalf of another government, organization, or individual, it acts as an agent. The Agency Fund is used to account for resources held by the government in a purely custodial capacity.

Quiz 16: Governmental Accounting: Other Governmental Funds, Proprietary Funds, and Fiduciary Funds

The main difference between an agency fund and a trust fund is:

Capital improvement special assessments:

At the inception of the City of Covedale's motor pool, $1,000,000 was transferred from the General Fund as beginning capital.The entry in the Internal Service Fund included a credit to:

The best fund in which to account for the interest and dividends from an endowment to purchase library books would be a(n)

Which of the following is not a classification of net assets of proprietary funds?

Interfund transactions include all of the following except for:

In the Statement of Cash Flows for an Proprietary Fund, the receipt of an operating grant would be included in cash flows from:

The entry in the General Fund to record the purchase of water for City Hall from the city's Water Utility Enterprise Fund would include a debit to:

If general obligation debt is refunded to lower the interest rate and the proceeds are irrevocably placed with an escrow agent or trustee to pay off the old debt as it comes due, the government must

An enterprise fund should be used to account for

Which of the following is not a typical year-end statement for an Enterprise Fund?

Capital improvements which are financed by special assessment debt for which the government is obligated in some manner would be recorded in the General Fixed Assets Account Group as a(n)

A government may use agency funds to account for all but the following:

The entry in the General Fund to record the reimbursement from a capital projects fund for legal services paid by the General Fund on its behalf would include:

A redemption of the final serial of general obligation bonds, including a deficiency covered by the general fund, would affect which funds and/or account groups?

Internal Service funds:

For the Statement of Cash Flows for an Proprietary Fund:

When a landfill operation is accounted for in an Enterprise Fund:

The activities of a central motor pool that supplies and services vehicles for the use of municipal employees on official business should be accounted for in a(n) ?

If a county collects taxes on behalf of the city and school district, it would record the taxes in the

Quiz 16: Governmental Accounting: Other Governmental Funds, Proprietary Funds, and Fiduciary Funds

The main difference between an agency fund and a trust fund is:

Capital improvement special assessments:

At the inception of the City of Covedale's motor pool, $1,000,000 was transferred from the General Fund as beginning capital.The entry in the Internal Service Fund included a credit to:

The best fund in which to account for the interest and dividends from an endowment to purchase library books would be a(n)

Which of the following is not a classification of net assets of proprietary funds?

Interfund transactions include all of the following except for:​

In the Statement of Cash Flows for an Proprietary Fund, the receipt of an operating grant would be included in cash flows from:

The entry in the General Fund to record the purchase of water for City Hall from the city's Water Utility Enterprise Fund would include a debit to:

If general obligation debt is refunded to lower the interest rate and the proceeds are irrevocably placed with an escrow agent or trustee to pay off the old debt as it comes due, the government must

An enterprise fund should be used to account for

Which of the following is not a typical year-end statement for an Enterprise Fund?

Capital improvements which are financed by special assessment debt for which the government is obligated in some manner would be recorded in the General Fixed Assets Account Group as a(n)

A government may use agency funds to account for all but the following:

The entry in the General Fund to record the reimbursement from a capital projects fund for legal services paid by the General Fund on its behalf would include:

A redemption of the final serial of general obligation bonds, including a deficiency covered by the general fund, would affect which funds and/or account groups?

Internal Service funds:

For the Statement of Cash Flows for an Proprietary Fund:

When a landfill operation is accounted for in an Enterprise Fund:

The activities of a central motor pool that supplies and services vehicles for the use of municipal employees on official business should be accounted for in a(n) ?

If a county collects taxes on behalf of the city and school district, it would record the taxes in the

Interfund transactions include all of the following except for: