Question 1

All of the following funds have a financial resources measurement focus with the exception of which fund?
A)debt service fund
B)special revenue fund
C)capital projects fund
D)private-purpose trust fund

Accepted Answer

The private-purpose trust fund has a fiduciary measurement focus, not a financial resources measurement focus. The other three funds listed (debt service fund, special revenue fund, and capital projects fund) all have a financial resources measurement focus.

Question 2

Which of the following funds provides goods and services only to other departments or agencies of the government on a cost-reimbursement basis?
A)Internal service funds
B)Enterprise funds
C)Special revenue funds
D)The general fund

Accepted Answer

Internal service funds are used to provide goods and services only to other departments or agencies of the government on a cost-reimbursement basis. They are designed to operate like a business within the government, providing services such as fleet management, printing and reproduction, and centralized purchasing. These funds are used to account for the activities of an organization that provides services to other agencies within the same government.

Question 3

Which of the following statements best describes the reporting process for profit seeking and governmental entities?
A)In profit-seeking enterprises the measurement focus is on the flow of all economic resources of the firm,whereas the focus for governmental funds is on current financial resources.
B)In profit-seeking enterprises the measurement focus is on the flow of current financial resources,whereas the focus for government funds is on all economic resources.
C)Both Profit-seeking enterprises and governmental entities have an objective to measure profitability.
D)Both Profit-seeking enterprises and governmental entities use the accrual or cash basis of accounting to record and report transactions.

Accepted Answer

The reporting process for profit-seeking enterprises focuses on the flow of all economic resources of the firm, while the focus for governmental funds is on current financial resources. Profitability is an objective for profit-seeking enterprises, but not necessarily for governmental entities. Both profit-seeking enterprises and governmental entities may use either the accrual or cash basis of accounting to record and report transactions.

Question 4

Which organization has the authority to establish generally accepted accounting principles for state and local government entities?
A)The National Council on Governmental Accounting
B)The Governmental Accounting Standards Board
C)The Financial Accounting Standards Board
D)The Municipal Officers Finance Organization

Accepted Answer

The Governmental Accounting Standards Board (GASB) has the authority to establish generally accepted accounting principles for state and local government entities in the United States. The National Council on Governmental Accounting is a former organization that merged with GASB. The Financial Accounting Standards Board establishes GAAP for private sector entities, and the Municipal Officers Finance Organization is not a recognized standard-setting organization.

Question 5

Which of the following funds are classified as fiduciary funds?
A)Agency and Special revenue funds.
B)Internal service and Enterprise funds.
C)Private-purpose trust and Agency funds.
D)Capital projects and Debt service funds.

Accepted Answer

Private-purpose trust funds are funds held by the government as a trustee for individuals, private organizations, or other governments. Agency funds are funds held by the government as an agent for individuals, organizations, or other governments. Both of these funds are considered fiduciary funds because they involve the government holding and managing resources on behalf of others.

Question 6

Which accounts described below would have non-zero balances after the accounts are closed in the general fund of a state or local government?
A)I,II,III.
B)I,II,IV.
C)IV,V,VI.
D)III,IV,V.

Accepted Answer

The accounts that would have non-zero balances after closing in the general fund are typically balance sheet accounts such as assets, liabilities, and fund balance (IV, V, VI).

Question 7

Which of the following items should not be included as revenue for a state government?
A)Property taxes levied in the current fiscal year.
B)Private property for which a state takes custody when the legal owner cannot be found.
C)Amounts received from other financing sources.
D)Fines and licensing fees for which amounts cannot be budgeted.

Accepted Answer

The answer of Which of the following items should not...

Question 8

Which governmental fund includes resources that are legally restricted so that the governmental entity must maintain the principal and can use only the earnings from the fund's resources to benefit the government's programs for all of its citizens?
A)General fund
B)Special revenue fund
C)Capital projects fund
D)Permanent fund

Accepted Answer

The description given in the question is for a permanent fund. Permanent funds are typically used for long-term investments, and the principal is legally restricted so that only the earnings can be used to benefit the government's programs for all citizens. Examples of permanent funds include endowments and trust funds. The other options mentioned do not have such restrictions on their use of resources.

Question 9

Which of the following characteristics are emphasized in the accounting for state and local government entities?
I.Revenues should be matched with expenditures to measure success or failure of the government entity.
II.There is an emphasis on expendability of resources to accomplish objectives of the governmental entity.
A)I only
B)II only
C)I and II
D)Neither I nor II

Accepted Answer

The accounting for state and local government entities emphasizes the expendability of resources to accomplish objectives, rather than matching revenues with expenditures to measure success or failure. This approach focuses on how resources are used to meet the entity's goals.

Question 10

At the end of the fiscal year,uncollected property taxes in the general fund should be:
A)reclassified from current to delinquent.
B)written off as uncollectible.
C)charged against unassigned fund balance.
D)reclassified from current to noncurrent.

Accepted Answer

Uncollected property taxes at the end of the fiscal year in the general fund are typically reclassified from current to delinquent, reflecting their status change rather than being written off, charged against balances, or reclassified as noncurrent. This process helps in managing and tracking the collection status of property taxes.

Question 11

Which of the following statements is (are)correct about the funds used by governmental entities?
A)I only
B)II only
C)I and II
D)Neither I nor II

Accepted Answer

I is correct because governmental entities use public funds that are collected through taxes, fees, and other sources. 
II is correct because governmental entities are required to follow strict budgeting and accounting procedures when handling public funds to ensure transparency and accountability.

Question 12

In a statement of revenues,expenditures,and changes in fund balance,the unassigned fund balance will be increased by:
I.a decrease in the fund balance-Nonspendable.
II.an excess of other financing sources over other financing uses.
A)I only
B)II only
C)Both I and II
D)Neither I nor II

Accepted Answer

Both a decrease in the fund balance-Nonspendable and an excess of other financing sources over other financing uses would increase the unassigned fund balance. The first reallocates funds from nonspendable to potentially unassigned, and the second directly increases available resources.

Question 13

In accounting for governmental funds,which of the following items could appear only on government-wide financial statements?
A)I only
B)I and II
C)I and III
D)I,II,III

Accepted Answer

Item II (accrual accounting) could appear on both the government-wide financial statements and the fund statements, but I (debt issued) could only appear on the government-wide financial statements. Item III (fixed assets) could appear on both the government-wide financial statements and the fund statements, but is more likely to have a significant impact on the government-wide financial statements.

Question 14

All of the following are elements of the statement of financial condition for state and local governments with the exception of:
A)Assets and Liabilities
B)Deferred inflow and outflow of resources
C)Net position
D)Inflow and outflow of resources

Accepted Answer

Inflow and outflow of resources are not typically included in the statement of financial condition. Instead, they are usually reported in the statement of revenues, expenditures, and changes in fund balances or in the statement of activities. The statement of financial condition focuses on the status of the government's assets, liabilities, deferred inflows and outflows of resources, and net position at a particular point in time.

Question 15

Which of the following funds are classified as proprietary funds?
A)Agency and special revenue funds.
B)Enterprise and internal service funds.
C)Debt service and capital projects funds.
D)Agency and pension trust funds.

Accepted Answer

Proprietary funds refer to funds that function in a manner similar to private businesses, with the intent of generating profits or cost recovery. Enterprise and internal service funds are the two types of proprietary funds.

Question 16

Which of the financial statements described below is prepared by the general fund of a state or local government?
A)A statement of cash flows.
B)An income statement.
C)A statement of revenues,expenses,and changes in retained earnings.
D)A statement of revenues,expenditures,and changes in fund balance.

Accepted Answer

The general fund of a state or local government prepares a statement of revenues, expenditures, and changes in fund balance to show the inflow and outflow of resources for the period and the change in the fund balance at the end of the period. This statement provides information on the budgetary resources and their allocation to different programs and services.

Question 17

According to the latest GASB exposure draft,which of the following is the only governmental fund type that may report an unassigned fund balance?
A)General fund
B)Special revenue fund
C)Capital projects fund
D)Permanent fund

Accepted Answer

According to GASB exposure draft, only the General fund may report an unassigned fund balance. This is because the general fund represents the primary operating fund of a governmental entity, and any excess revenue over expenditures is considered unassigned and available for future use. The other fund types may have assigned or restricted fund balances due to their specific purposes and limitations on how the funds can be used.

Question 18

The Town of Baker reported the following items on the June 30,20X9,balance sheet of its general fund:
At June 30,20X9,what amount should be reported for Fund Balance-Unassigned?
A)$46,000
B)$40,000
C)$30,000
D)$16,000

Accepted Answer

The unassigned fund balance is calculated by subtracting non-spendable, restricted, committed, and assigned fund balances from the total fund balance. In this case, the unassigned fund balance is $30,000.

Question 19

The following information was obtained from the general fund balance sheet of Lima Village on June 30,20X9,the close of its fiscal year:
On June 30,20X9,what was Lima's unassigned fund balance in its general fund?
A)$84,000
B)$44,000
C)$34,000
D)$24,000

Accepted Answer

The answer of The following information was obtained from the...

Question 20

Which of the following funds are classified as governmental funds?
A)Internal service and capital projects funds.
B)Internal service and debt service funds.
C)Enterprise and agency funds.
D)The general and special revenue funds.

Accepted Answer

The general and special revenue funds are classified as governmental funds, as they are used to account for the operating and capital activities of a government. Internal service, capital projects, and debt service funds are also considered separate governmental funds, but enterprise and agency funds are not classified as governmental funds as their activities are primarily commercial in nature.

Quiz 17: Governmental Entities: Introduction and General Fund Accounting

All of the following funds have a financial resources measurement focus with the exception of which fund?

Which of the following funds provides goods and services only to other departments or agencies of the government on a cost-reimbursement basis?

Which of the following statements best describes the reporting process for profit seeking and governmental entities?

Which organization has the authority to establish generally accepted accounting principles for state and local government entities?

Which of the following funds are classified as fiduciary funds?

Which accounts described below would have non-zero balances after the accounts are closed in the general fund of a state or local government?

Which of the following items should not be included as revenue for a state government?

Which governmental fund includes resources that are legally restricted so that the governmental entity must maintain the principal and can use only the earnings from the fund's resources to benefit the government's programs for all of its citizens?

At the end of the fiscal year,uncollected property taxes in the general fund should be:

Which of the following statements is (are) correct about the funds used by governmental entities?

In a statement of revenues,expenditures,and changes in fund balance,the unassigned fund balance will be increased by: I.a decrease in the fund balance-Nonspendable. II.an excess of other financing sources over other financing uses.

In accounting for governmental funds,which of the following items could appear only on government-wide financial statements?

All of the following are elements of the statement of financial condition for state and local governments with the exception of:

Which of the following funds are classified as proprietary funds?

Which of the financial statements described below is prepared by the general fund of a state or local government?

According to the latest GASB exposure draft,which of the following is the only governmental fund type that may report an unassigned fund balance?

The Town of Baker reported the following items on the June 30,20X9,balance sheet of its general fund: At June 30,20X9,what amount should be reported for Fund Balance-Unassigned?

The following information was obtained from the general fund balance sheet of Lima Village on June 30,20X9,the close of its fiscal year: On June 30,20X9,what was Lima's unassigned fund balance in its general fund?

Which of the following funds are classified as governmental funds?