Question 1

Briefly discuss how governmental budgeting differs from budgeting for businesses.

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Question 2

The City of Fairport adopted the following budget for fiscal year 2017:
 $\begin{array}{lr}
\text { Anticipated Revenues: }\
\text { Property Taxes } & \$ 4,040,000 \
\text { Licenses and Permits } & 510,000 \
\text { Fines and Forfeits } & \underline{402,000} \
\text { Total } & \$ 4,952,000\\
\text { Approved spending levels: }\
\text { General Government } & \$ 1,650,000 \
\text { Public Safety } & 2,300,000 \
\text { Public Works } & \underline{1,085,000} \
\text { Total } & \$ 5,035,000
\end{array}$ 
In addition, the City reported the following actual amounts for the same fiscal year.
 $\begin{array}{lr}
\text { Revenues: } & \
\text { Property Taxes } & \$ 4,065,000 \
\text { Licenses and Permits } & 496,000 \
\text { Fines and Forfeits } & \underline{\$ 411,000} \
~~\text { Total } & \$ 4,972,000\\
\text { Encumbrances - Current Year } & \
\text { General Government } & \$ 1,501,000 \
\text { Public Safety } & 2,380,000 \
\text { Public Works } & \underline{\$ 995,000} \
~~\text { Total } & \$ 4,876,000\\
\text { Encumbrances - Current Year } & \
~\text { Public Safety } & \$ 117,000 \\
\text { Expenditures related to } 2016 & \$ 10,000\
\text{ ecumbrances}
\end{array}$ 
Required: Prepare a budgetary comparison schedule for the City for the year ended December 31, 2017 assuming the fund balance of the General Fund budgetary basis) was $627,000 at January 1, 2017. No "original budget" column is required. Include a "variance" column.

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Question 3

Where does the Budgetary Fund Balance -- Reserve for Encumbrances account appear on the Balance Sheet of a General Fund?

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Question 4

What are the four classes of nonexchange revenues?

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Question 5

What are the revenue and expenditure recognition criteria under modified accrual accounting? Include in your answer specifically the recognition of property tax revenue.

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Question 6

List the four eligibility requirements for a government to record revenue from a nonexchange transaction. Provide a brief explanation for each.

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Question 7

The City of Westboro passed an appropriations ordinance for the year ended June 30, 2017. Included in the appropriations ordinance was an appropriation for public safety in the amount of $7,600,000. During the month ended July 31, 2017 the following transactions took place:
a. Purchase orders were issued in the amount of $410,000.
b. Goods were received, related to purchase orders in the amount of $220,000, along with invoices amounting to $215,000.
c. Salaries were paid in the amount of $450,000
d. Because of an economic slowdown, a budget amendment was passed cutting all departments' annual) appropriations by 4%.
Required:
Compute the amount of appropriations available at July 31, 2017.

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Question 8

With respect to reporting for the General Fund, what is the difference between GAAP basis and budgetary basis reporting?

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Question 9

Define the term "Revenue" and distinguish between that term and "Other Financing Sources."

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Question 10

Define the term "Expenditure" and distinguish between that term and each of the following terms:
1. Expense
2. Disbursement
3. Encumbrance

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Quiz 3: Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority